CCCS put plan on hold

lee_d_m

Hi,

I currently have a debt payment plan with CCCS for a debt of approx 30k with 5 creditors.

Last year, my wife passed away so I decided to sell my house and use the proceeds of the sale to assist with the purchase of a new house with my daughter and her husband.

At the time, there were two charging orders on my house, which were paid off when i sold it, leaving the 5 creditors, which is credit card debt. These did not have charging orders on the house.

Any money left from the sale was given to my daughter

After reviewing my plan with CCCS they have said that my sums do not add up and have put my plan on hold and have asked me to deal directly with my creditors. I am able to and willing to continue to pay the creditors as per my plan, but CCCS are not happy with this and want details of where the money has gone and why i didn't pay the creditors back. I honestly didn't know I had to do this as they had no charge on the house.

The new house is not in my name so I am essentially boarding there but do contribute to the bills etc. I also have a permanent low paying job.

I would like some advice on how to deal with this, should I go back to CCCS and explain that all my money has been given to my wife, or should I try another debt helpline and see what they might have to say.

I would very much appreciate any help and advice

Thanks

Tixy

lee_d_m wrote: »

I would like some advice on how to deal with this, should I go back to CCCS and explain that all my money has been given to my wife, or should I try another debt helpline and see what they might have to say.

I would very much appreciate any help and advice

Thanks

I would talk to CCCS again.
You mean that all the money was given to your daughter not your wife?

How much was left after you sold your house, settled any mortgage and the debts with charging orders? What sort of amount are you talking about?

What did you daughter do with this money? does she still have it? if not what happened to it? did it go towards a deposit on her new house? and if so what was the reason against you having your name on the property?

If this was a substantial gift to her when you had outstanding overdue debts then that would be against the terms of the DMP.

You could, as CCCS suggest, switch to a self-managed DMP and offer what you can afford now to your creditors (presumably your outgoings are less now so you could perhaps increase your repayments?)

Depending on the size of the gift to your daughter have you considerd the possibility of the issue of inheritance tax (depending on the size of your estate and the value of the gift), and on the potential for it t be classed as deprivation of assets if you needed a care home at some point in the future (obviously hopefully this won't be an issue for you but just have you considered it).

lee_d_m

Hi,

Thanks for the response.

To clarify, the money was given to my daughter. The amount was in the region of 115k, most was used as deposit for the new house and the rest approx 20k went towards house improvements, as far as I'm aware, the money is now gone. It was transferred directly to my daughter's account on completion of my house sale so I haven't seen it.

We didn't want to have my name on the property due to my financial issues so we decided it better just to have it in my daughter and her husbands name.

Inheritance tax has been accounted for and the necessary form completed and sent to HMRC. (I can't remeber the exact form number right now, but we did take advice on this matter).

So, in light of this information, what would you advise as to my best course of action ?

Thanks again, any advice is most appreciated.

Trollfever

Did you obtain professional advice about voidable preference in bankruptcy?

lee_d_m

Trollfever wrote: »

Did you obtain professional advice about voidable preference in bankruptcy?

Hi,

I did not, I have only ever dealt with CCCS, could you elaborate on this ?

Thanks

Tixy

lee_d_m wrote: »

Hi,

I did not, I have only ever dealt with CCCS, could you elaborate on this ?

Thanks

Not something I know a lot about, but I believe it would relate to if one of your creditors petitioned to make you bankrupt (e.g. because you didn't settle the debt when you were in a position to do so), if that happened then the courts would consider the gift to daughter voidable and would reverse it meaning you had assets equal to the gift and therefore could be used to pay your debts.

I don't know how often this happens/how high a risk it is, hopefully trollfever or someone else can advise more.

lee_d_m

Thanks Tixy,

So do you think I should go back to CCCS and explain that the money from the house sale is now gone and ask to continue with my DMP ?

They haven't yet said I have breached my DMP, just that the "sums didn't add up" and wanted a statement from my solicitor showing the details of the house sale transaction and monies left from the sale.

Thanks again.

Hatecreditors.com

This may sound a stupid question (as it’s already been done) but why did you not consider paying off your debts and giving your daughter £85,000. That way, you are completely debt free, no more hassle from creditors, no more interest, no more DMPs, extra money a month and your daughter still gets a massive chunk of money.

You state you are on a low income so presumably the DMP will last forever.

In terms of your original question, I think you possibly are in breach of the DMP as it’s probably deemed as not treating creditors fairly. I’m guessing that you aren’t meeting the minimal contractual payments given the size of your debt and low income, but you’ve had the funds to effectively pay the debt and realise your creditors from the risk.

paulmapp8306

Pretty much as has been stated.

While in a DMP, you have an obligation to clear debts first should you com einto money - which you did. CCCS were helping you manage your debts because you couldnt afford to pay them - when you sold you houise you COULD afford topay them and should have done so, with anythinkg left being gifted.

Im actually in a similar kind os situation in reverse - that is my mum has given me a gift deposit for a house, BUT as that gift is for house purchase only and wouldnt be available if not buying, then its not considered as income. I have a plan to pay of the debts I still have next year when I get a lump sumn from work .... before I pay anything off out mortgage. If I didnt do so, then my creditors could force the sale of the house as it is deemed an asset.

Ultimately CCCS "Seem" to not want to administer a plan you have effectively voided by not clearing debts when you could - but have noit informed your creditors of what has happened.

Tixy

I would probably go back to CCCS and explain to them what you did with the money.
They may not allow you to continue on a DMP with them, but hopefully will still give you some advice about the situation and any potential implications etc and what they recommend you do going forward.

lee_d_m

Thanks everyone for your advice. To answer why I didn't pay them back, I honestly thought that as the money was gained from the sale of my house, I only had to pay the creditors which had a charging order over it.

I have never missed a payment on my DMP (and don't intend to) so I obviously wrongly assumed that the other creditors would be fine if I continued to pay the DMP.

I will go back to CCCS and explain and see what they say.

Thanks again.