My grandmother is declaring herself bankrupt and I'm very worried, advice?

Layla12

First of all, I'm just a student, 20. I'm saying this because I'd like some feedback to this as simply as possible because I honestly am lost when it comes to this kind of thing.

My grandmother is of pension age and has many old debts from catalogues and credit cards that she just can't manage any more because of the overwhelming interest. These debts were her own fault, from taking things on without fully thinking what she was getting herself into, which she now regrets.

She went to CAB this week and they told her to declare bankrupt, the guy apparently only told her that if she did this, all her debt problems would be solved and didn't mention any consequences, so without thinking it through she leapt at the chance to do this. She says she signed a form in there with the guy but doesn't know exactly what she signed...

This worries me because unfortunately she can get confused with these things and just sign whatever someone tells her to sign. She was, however, given a "Applying for your credit report" form to take home and fill in. (Why is this? Could the possibly not have signed a bankruptcy form yet?)

I need some advice on what exactly will be effected if she has filed for bankruptcy.

I'm incredibly worried that her rented house (as in, she rents off a landlord) may be compromised (can it? what about renting houses in the future?), also will this affect her bank? She gets her pension and housing benefit in her bank account, if this is effecting then I worry how she will pay out rent or get her pension.

She seems convinced that the only thing that will be effected by declaring bankrupt is her debts and that nothing else will happen. However, the man at CAB told her nothing, and she didn't ask or even consider anything else so how would she know?

Also, will she be taken to court after declaring bankrupt?

Extremely worried,
Thanks

debtinfo

What she has got is just permission for them to apply for her credit reports, this will be so that they can see what the size of the problem is as they hold all the information about what debts she has, dont worry she has not applied for bankruptcy yet, they are just in the gathering information stage, i imagine that when they have more information they will explain the bankruptcy more fully to her, you might want to go along with her so you can ask any pertinant questions as well

tigerfeet2006

Hi and welcome to the BR.

What she has probably signed is a form for them to act on her behalf.

They probably want the credit report to get up to date status on her debts, especially if she is comfused.

Is she with a private landlord or a council/housing association?

There are only two BR friendly banks, so she will need to open a new account before BR. Take a look at the bank account sticky. https://forums.moneysavingexpert.com/discussion/3582093

Also have a read of the Look Here First sticky https://forums.moneysavingexpert.com/discussion/1056083

Anything else you are not sure of just ask. Have a read of other threads as well.

Layla12

Thank you both.

debtinfo wrote: »

What she has got is just permission for them to apply for her credit reports, this will be so that they can see what the size of the problem is as they hold all the information about what debts she has, dont worry she has not applied for bankruptcy yet, they are just in the gathering information stage, i imagine that when they have more information they will explain the bankruptcy more fully to her, you might want to go along with her so you can ask any pertinant questions as well

Ah! This is a relief. I've just been talking to her and she seems to think that it's all done already, that she is already considered bankrupt.. I'm trying to explain to her that we have this form to fill out but she's very stubborn and is making the situation very stressful. I wish I was there to actually listen to what the man told her, she really doesn't have a clue what she is doing when it comes to this. She did say the man told her she would be getting forms and leaflets in the post so I'm assuming they will be about how to declare bankruptcy and the issues that go alone with it, will keep this updated. Thanks again!

tigerfeet2006 wrote: »

Hi and welcome to the BR.

What she has probably signed is a form for them to act on her behalf.

They probably want the credit report to get up to date status on her debts, especially if she is comfused.

Is she with a private landlord or a council/housing association?

There are only two BR friendly banks, so she will need to open a new account before BR. Take a look at the bank account sticky.

Anything else you are not sure of just ask. Have a read of other threads as well.

Thank you, yes she is with a private landlord. Will they be notified if she does file for bankruptcy?

I'm going to look through those links now, thanks again

tigerfeet2006

No, she has not been declared BR. She will have to pay £525 OR's fee's and £175 court fee's (the court fees will probably be waived as she has a low household income.) She will also have to go to court to declare herself BR.

If she has debts under £15k then they may be talking about a DRO which is £90 and you don't have to go to court.

If she goes BR the OR will most likely ask to see her rental agreement and may talk to her LL to confirm some things. A LL cannot just chuck her out on the streets, they have a process to follow and they can instigate this process at any time. The LL can be reassured that with no debts and an allowance made for the rent then it is a priority to be paid and he won't have to worry about not being paid his rent because she is paying debts instead.

Layla12

tigerfeet2006 wrote: »

No, she has not been declared BR. She will have to pay £525 OR's fee's and £175 court fee's (the court fees will probably be waived as she has a low household income.) She will also have to go to court to declare herself BR.

If she has debts under £15k then they may be talking about a DRO which is £90 and you don't have to go to court.

If she goes BR the OR will most likely ask to see her rental agreement and may talk to her LL to confirm some things. A LL cannot just chuck her out on the streets, they have a process to follow and they can instigate this process at any time. The LL can be reassured that with no debts and an allowance made for the rent then it is a priority to be paid and he won't have to worry about not being paid his rent because she is paying debts instead.

Ah, now this is actually something that has made me think because she did mention to me that the man told her she would have to pay £90 to settle everything. She never mentioned court either so I'm assuming it could be this. I'm going to research some more on DRO, so thank you very much for bringing this to my attention!

Also thank you about explaining this about the rent, this place has been incredibly helpful for me as I've felt very confused and lost about this situation

tigerfeet2006

No problem, happy to help.

If it is a DRO then pop onto the IVA&DRO board and they will be happy to chat about things as the rules are different between a BR and a DRO.

http://forums.moneysavingexpert.com/forumdisplay.php?f=159