Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_James

Whitewinston wrote: »

I am in financial difficulty. 3 years ago I took out an iva as I had trouble meeting loan and credit card repayments. I have missed last months payment due to reduced finances. I was in receipt of housing benefit which I am now not entitled to, was receiving £450pm. I wrote to council telling them my daughter had started work, they didn't receive it and I admit I didn't check my payments to see if they had gone down. Last month I was taken to court and was fined with a 12 month conditional discharge. I have to repay £6k at £100 pm. Also child benefit told me the apprenticeship my other daughter was doing was not approved for continued payment even tho I had rung them up to ask, this resulted in overpayment of £1k and £2k child tax credit. Child benefit has been stopped till April 2014 and ctc reduced by half. I also have a 14 yr old. My job is under review due to the court case as I work for HMRC so may be dismissed. My outgoings are £140 more than my incomings without including £100 I have to pay to council. I have a car that I bought through a payment breaks rom my iva that I paid £1200 for last year. Using Parkers valuation it's worth around £700. I don't want to lose it as it was my brothers car who died of cancer last year and I bought it from my sister in law. Is there any chance I would be able to keep the car? And is bankruptcy the answer or struggle through and offer token payments to my creditors - iva ones? Please advise I am worried sick

Hello,

Thanks for posting. As you're currently on an IVA the best people to speak about your situation would be your IVA supervisor. If you contact your IVA company they'll be able to carry out a review of your situation and tell you how best to proceed.

As IVAs are legally binding agreements it's important to speak to your supervisor before considering bankruptcy.

To answer your questions about cars in general terms, I think there would be a reasonably good chance of keeping a car worth £700 in bankruptcy. The decision would be up to the OR (Official Receiver) and they look at the value of the car and how much it is needed.

Kind regards

James

charliel_2

Hi James and Rachel

I am set to go BR as soon as possible. I have taken advice but just need to get my head out the sand and do it. I have £70k of debts and have been caring for my parents for the last 2 years and receive £450 a month in benefits. I have known that I need to BR for over 2 years now and yet I have done nothing about it. Part of it is fear, part is disappointment and denial, part is getting the time what with looking after my parents.

As mentioned my parents are ill. If one of them was to pass I would receive an interest in the property and be a 'tenant in common'. What would happen if one of them was to pass while going through the BR process and I became a 'tenant in common'?

Would we be forced to sell the house should this happen?

Charlie

StepChange_James

charliel wrote: »

Hi James and Rachel

I am set to go BR as soon as possible. I have taken advice but just need to get my head out the sand and do it. I have £70k of debts and have been caring for my parents for the last 2 years and receive £450 a month in benefits. I have known that I need to BR for over 2 years now and yet I have done nothing about it. Part of it is fear, part is disappointment and denial, part is getting the time what with looking after my parents.

As mentioned my parents are ill. If one of them was to pass I would receive an interest in the property and be a 'tenant in common'. What would happen if one of them was to pass while going through the BR process and I became a 'tenant in common'?

Would we be forced to sell the house should this happen?

Charlie

Hi Charlie,

Thanks for posting.

If you were to inherit a share in the property during your bankruptcy then the courts would see this as an asset. It doesn't mean that they'd immediately force the sale of the property but they are likely to want to raise the money that represents your "beneficial interest" which is the amount of equity in the property they think you're entitled to.

If someone can raise the money to pay the value of the beneficial interest to the Official Receiver (the person dealing with the bankruptcy) then there wouldn't be any need to sell the property.

The Official Receiver would only be interested in your share of the equity, so if the property was sold the surviving parent would keep their share of the equity if the property was sold.

I hope this clears things up a bit.

Kind regards

James

ally80

hi
i have recently split with my wife , we have a house with co-ownership it is 60-40 in their favour , my ex wont foot any bills as everything is in my name , my mortage is for 71,000 the house was bought for 180000 in 2007, i know iam going to lose the house but iam ok with that but i need to know if co-ownership ni will be chasing me for the money they will lose , roughly 100000 grand , and i also need to know what my options are moving foward

charliel_2

StepChange_James wrote: »

Hi Charlie,

Thanks for posting.

If you were to inherit a share in the property during your bankruptcy then the courts would see this as an asset. It doesn't mean that they'd immediately force the sale of the property but they are likely to want to raise the money that represents your "beneficial interest" which is the amount of equity in the property they think you're entitled to.

If someone can raise the money to pay the value of the beneficial interest to the Official Receiver (the person dealing with the bankruptcy) then there wouldn't be any need to sell the property.

The Official Receiver would only be interested in your share of the equity, so if the property was sold the surviving parent would keep their share of the equity if the property was sold.

I hope this clears things up a bit.

Kind regards

James

Hi James

Thanks for the reply.

Spoke to my folks regards this tonight and it worried me and them slighlty.

Could I look at a 1 day IVA option? I am on carers allowance so couldn't afford much as I don't have money to save, but my dad said he would be happy to pay for it, but he could only afford somewhere in the 5-10% bracket. Is this too low?

Charlie

StepChange_James

ally80 wrote: »

hi
i have recently split with my wife , we have a house with co-ownership it is 60-40 in their favour , my ex wont foot any bills as everything is in my name , my mortage is for 71,000 the house was bought for 180000 in 2007, i know iam going to lose the house but iam ok with that but i need to know if co-ownership ni will be chasing me for the money they will lose , roughly 100000 grand , and i also need to know what my options are moving foward

Hello Ally80,

Shared ownership should mean that you'd only be responsible for the losses on your 40% of the equity. I've had a look at this leafet on the Co-ownership website http://www.co-ownership.org/fs/doc/publications/Applying_to__Oct_11.pdf.

Page 8 says this:

What happens if I want to sell my home?
You can sell your property at any time. The procedure is the same as if you were simply increasing your share in the property.
Contact us for your staircasing information pack, return the form and fee and we will send your equity valuation figure. This will let you know how much of the sale proceeds you owe us for our share of the basic property.

I hope that means something to you, it's not all the easy to follow. I'd suggest giving the people at co-ownership a call and asking a few questions. I'd expect that you'd not be responsible for their losses but best to check with them.

Kind regards

James

StepChange_James

charliel wrote: »

Hi James

Thanks for the reply.

Spoke to my folks regards this tonight and it worried me and them slighlty.

Could I look at a 1 day IVA option? I am on carers allowance so couldn't afford much as I don't have money to save, but my dad said he would be happy to pay for it, but he could only afford somewhere in the 5-10% bracket. Is this too low?

Charlie

Hi Charlie,

5-10% is a little bit on the low side but given as it's a one time offer being financed by someone else's money it's worth at least having a look at.

You can read more about lump sum IVAs in our blogpost: http://moneyaware.co.uk/2011/05/lump-sum-ivas-an-insolvency-secret/.

If you give us a call (http://www.stepchange.org/Contactus.aspx) we'll be able to have a look at your situation and see if a lump sum IVA is likely to succeed.

Hope this helps.

James

fazste

Hi,
due to a recent hike in my wife's mortgage she can no longer afford to keep up payments. We are both in debt management but all our finances are seperate. (mortgage in her name from previous relationship)
She is considering bankruptcy as there is no chance we can find the extra money and we think it will come down to us losing the house.
The mortgage lender has given us 2 months on the original rate and that's it.
What would be our best course of action? We live in Northern Ireland and would like to talk things over with someone.
Many thanks,
Steve.

System

fazste wrote: »

Hi,
due to a recent hike in my wife's mortgage she can no longer afford to keep up payments. We are both in debt management but all our finances are seperate. (mortgage in her name from previous relationship)
She is considering bankruptcy as there is no chance we can find the extra money and we think it will come down to us losing the house.
The mortgage lender has given us 2 months on the original rate and that's it.
What would be our best course of action? We live in Northern Ireland and would like to talk things over with someone.
Many thanks,
Steve.

Hi Steve and thanks for your post.

It sounds like you would benefit from some free and impartial advice.

We have a specialist team that can help with this.
I’d recommend that you gather details of your household income, expenditure and debts and then give us a call.

Our free Helpline is on 0800 138 1111. We’re open Monday to Friday 8am - 8pm and Saturday 9am until 3.00pm.

If you phone us it may be possible to refer you directly to an advisor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

You’ve taken the first step to sorting out your money worries and we can support you with free and impartial advice along the way.

I hope this helps.

Kind regards,

Mat

fazste

Hi Mat,
Thanks for the reply, i'll pass on the info.

regards,
Steve.