HELP! Can you work whilst bankrupt???

Adamdee

Hi, I was made to go bankrupt in May 2011 due to seperating from my girlfriend and being forced to sell my house in 2009 which left me £45000 in debt.

I am current unemployed and have been since I went bankrupt in May, due to being unemployed I didnt have to set up a repayment plan (IVA) to pay back the mortgage company and I have been told if I dont work for a year from the date I went bankrupt then I will never have to repay anything, but if I get a job at a supermarket for say £15000 a year then I will be made to set up a repayment plan for 5 years.

This means if I need £8,000 a year to live (rent, food, bills) then the £7,000 that is left will go to the creditor for 5 years.

So my question is:

Is this true? so if I get a job next week will that go against me and will I be made to set up a repayment plan or is this rubbish? or if I wait until I have been bankrupt for over a year then I will not have to repay anything?

If anyone has any information on this then that would be great.

Thanks

tigerfeet2006

Yes if you get a job the OR will look at your essential outgoings, don't forget when you start work your outgoings will increase anyway. You will agree with the OR what your essential outgoings are and any surplus you pay into an IPA for 36 months. If your circumstances change at any point then you can alter the IPA up, down or have it suspended, the suspended months count towards the 36 months.

From the Look Here First:Bankruptcy Help sticky (a very useful thread to read.)

Income Payment Agreements/Orders.

• Income Payment Agreements & Orders
• Urgent news on IPA's - Changes for BRs after 01/12/2010
• Tech Man - IPO / IPA (Income Payment Orders and Income Payment Agreements) (IS)
• Nil tax (NT) coding/IPAs (MSE)
• Annex A – Assessment of real disposable income where the bankrupt's income is derived in part from state benefits
  Annex B - Guidance on the assessment of real disposable income where the official receiver seeks to claim a lump sum payment
• Income payment - Household spending
  Spreadsheet showing average UK spending calculated from the Office of National Statistics publication ‘Family Expenditure Survey’
• IPA calculator Pre 01 December 2010
• IPA calculator Post 01 December 2010

Ineedaname

I think you are being optimistic at having £7000 pa spare on a £15k income. Remember that's gross, there's tax and national insurance to come out first which will leave you with approximately £12.5k (based on standard tax code) take home pay.

If you pay say £600 pcm rent that's £7.2k p.a., then there's another £1k or so council tax, £2.5k household shopping (£200 pcm for a single person), approximately another £1.2k utilities (electric, gas/oil, water, TV licence, contents insurance) - totalling £11,900 which doesn't leave much for surplus. Also, that doesn't include allowable amounts in BR for haircuts, emergency fund, holiday, clothing and transport to/from work!

I'm not saying you won't have any surplus as the above figures are estimates and yours may be different. But think of the long term and if you have a chance at a job now then go for it.

andyf1980

Aside from the financial implications it's worth thinking about your sanity - are you happy to be out of work for another year? It would drive me mad. Just something to throw into the mix

ladylouise62

Andyf1980 makes a good point, but also - would you not like to pay back at least some of what you owe? It's not the creditors' faults that you owe money, and even if your situation were not arrived at on purpose, shouldn't you be prepared to stand up to your responsibilities and take some of the hit?

sundays

ladylouise62 wrote: »

Andyf1980 makes a good point, but also - would you not like to pay back at least some of what you owe? It's not the creditors' faults that you owe money, and even if your situation were not arrived at on purpose, shouldn't you be prepared to stand up to your responsibilities and take some of the hit?

Its often the creditors fault they go BR as most will do all they can to avoid BR, sadly creditors wont listen, become more greedy and rack up charges, send threatening letters and sometimes people out, may send a court baliff if a CCJ is defaulted.

personally i rather put a hit on a creditor than take a hit on wages and pay it back.

Bad atitude - yep- reason for it- definetly.

Ineedaname

That's a very short sighted view on life.

wildheart83

I started working shortly after my BR went thru, it allowed me to take a lower paying job than I was used to simply because I couldn't bear the thought of not working anymore. I'd been unemployed for 6 weeks and was already climbing the walls.

Anyway, on a 14k salary and still living at home, I had no surplus (mainly due to high commuting costs but like someone else said it's not a huge amount each month)
Sometimes I couldn't afford to pay my folks the full amount of rent they asked for, but would still rather have been working and keeping myself active and busy than to not be working at all.

I didn't even consider my creditors in my decision to work, selfish maybe but I think BR allows you to take a step back and focus on the important things in life, and it sounds to me OP that that's exactly what you're doing, good luck!

alastairq

ladylouise62 wrote: »

Andyf1980 makes a good point, but also - would you not like to pay back at least some of what you owe? It's not the creditors' faults that you owe money, and even if your situation were not arrived at on purpose, shouldn't you be prepared to stand up to your responsibilities and take some of the hit?

According to the OP, bankruptcy was petitioned in May this year.

Therefore creditors will, by now, have been dealt with equitably by the Official Receiver.

In as much as, any of the OP's assets would have, or will be, realised for the Bankruptcy.

Since the Insolvency Service takes a priority claim on a BR's estate, to pay the costs of administering a bankruptcy, any surplus income identified will be recovered, to the benefit of the public purse.... creditors will be left to pick over the leavings.

However, for creditors all is not doom and gloom....debts will have already been offset before they defaulted, and once subject to a BR, will again be offset by creditors against any tax they pay....

Debt isn't a moral issue, it is a financial issue...and should be left as such.

After all, we as a society do not apply moral dictums to marriage and divorce, do we?

Odd that we as a society apply greater store by financial solidity, than we do by social and familial relationships....[not forgetting the pain they cause when they go wrong, not just to the immediate family, either.....but then, for us these days, that doesn't matter at all.....unlike financial fidelity....!!!]


My advice, for what it's worth to the OP, is to go after work.....the likelihood of a massive IPA/IPO is unlikely, especially given the figures quoted.....but hurry, there are thousands of university graduates who cannot get the work they expect...and some will bite the bullet, and simply go for whatever offers a wage....

andyf1980

Ineedaname wrote: »

That's a very short sighted view on life.

Sure this one has been done to death but.....

I don't think anyone can absolve themselves of responsibility. Should the lenders have been more careful? Yes probably. Should the borrower have been more careful too. Yes probably!

Personally I wouldn't avoid taking a job in order not to repay my creditors. Sods law but I was unemployed at br and had been for nearly a year. Within a couple of weeks I got a job :mad:.

BR allowed me to take a job in a completely different field earning less than half what I did before. I absolutely love my job now even though it's incredibly stressful.

It's not always about taking the financial decisions but also those which will have a positive impact on your life.

Ineedaname

I'm not sure why you quoted my post to confirm a long term view is best?