Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Allen

fridge1987 wrote: »

hi just after a but of advice.i am bankrupt due to gambling when i get really low due to a mental disorder.was put on nt code and took so long befor receiver sorted the payments .my mrs waled out with kids and i went that bad place and spent the nt tax money.im writing to confess my sins to OR .im pleadin as gesture to do all overtime i can so i pay more in tax and ipa over coming months ..just wondered what will happen.legal action? a huge smack on wrist or what.any advice appreciated

Hello there

I have replied to your private message asking this question, I hope that's okay.

Allen

fridge1987

hi i dont have any private messages at the moment.... thanks though

SnowL

Evening,

My parter was declared bankrupt in July last year and has been on universal credit since March 2016. He's just secured a job with a start date in February. I've read online about the NT tax code but don't understand, will he get paid and have to submit a refreshed SOA to OR or do they work out the figure for him?

Thanks in advance

Former_StepChange_Richard

SnowL wrote: »

Evening,

My parter was declared bankrupt in July last year and has been on universal credit since March 2016. He's just secured a job with a start date in February. I've read online about the NT tax code but don't understand, will he get paid and have to submit a refreshed SOA to OR or do they work out the figure for him?

Thanks in advance

Hi there

Thanks for your message.

Just to confirm first, your partner will get paid.

With tax codes in bankruptcy the HMRC can change a person's tax code to a 'nil tax' code. Their deductions for tax will usually be stopped for the remainder of the tax year. This would mean the person’s take-home pay will increase.

However, if the person goes bankrupt late in the tax year and pays a low amount in tax each month, the OR may not take the change in tax code into account when calculating the IPA payments. With your partner being bankrupt and starting a job late in the tax year, the OR may take this position.

I can't say if the OR will want a new SOA from your partner, but your partner should certainly make the OR aware that they have started a new job. If your partner is in an IPA currently, depending on the wage he is now on, this could likely be affected.

I hope this helps.

Richard

Former_StepChange_Richard

fridge1987 wrote: »

hi i dont have any private messages at the moment.... thanks though

Hi there,

I've asked my colleage Allen to resend his message to you. Please let us know if you don't recieved this.

Richard.

SnowL

Hi Richard

He currently doesn't pay anything as on universal credit and no surplus (I'm paying 80% of everything household wise, he borrows my car and puts own fuel in etc). When he starts the job, can he submit new SOA which reflects the 50/50 split of bills we want to get back to? Or will OR want any excess over and above what he's submitted I.e. The benefits, to go to them?
Just to make clear, am by no means trying to get out of him paying, I just really need his contributions to bills as I am struggling to pay the rest.

Thank you in advance

StepChange_Kirsty

Hi SnowL,

Thanks for your reply.

If the OR requests a new SOA when you partner starts his new job, they will want to see details of the full household income and full household costs. This will enable the OR to ensure that each person pays a fair amount of the household costs.

For example, if you’re both earning exactly the same amount of money, then a 50/50 split of the household costs and a 50/50 split of the surplus would be correct. On the other hand if one of you earns say 60% of the household income and the other 40%, then it is likely the OR would expect to see a 60/40 split of the household costs and then a 60/40 split of the surplus. Whatever your partner’s share of this is is what would need to be paid into the Bankruptcy.

I hope this makes sense but please do not hesitate to contact us if you have any further questions.

Kirsty

SnowL wrote: »

Hi Richard

He currently doesn't pay anything as on universal credit and no surplus (I'm paying 80% of everything household wise, he borrows my car and puts own fuel in etc). When he starts the job, can he submit new SOA which reflects the 50/50 split of bills we want to get back to? Or will OR want any excess over and above what he's submitted I.e. The benefits, to go to them?
Just to make clear, am by no means trying to get out of him paying, I just really need his contributions to bills as I am struggling to pay the rest.

Thank you in advance

willunhappy

hi there looking for some advice.
I am now looking to get out of debt. This is looking like i have to go into bankruptcy.

1. have the council taking money from my wages to pay for back pay of council tax, would this stop or continue after bankruptcy
2. was give a loan by my company because i went from weekly pay to monthly pay, would i have stop paying back the loan to the company?

will

shiningfaery

I am considering bankruptcy due to my circumstances and am going through a budget etc just now.

My question and I apologise if it's been asked or may seem a bit stupid. But I am a single parent and would need to plan for events like Xmas and birthdays am I allowed to have a savings account with money in for these events during bankruptcy or not due to the debts etc? Not talking about huge amounts of money as of course I don't have anything like that. Just wondering if it would possible for me to set aside any money?
(I am in Scotland)

StepChange_Rachael

Hi Will

Welcome to the forum and thanks for your post.

Council tax which has been set has an attachment of earnings will have been set after a liability order was obtained by the council.
The attachment will stop in Bankruptcy but as a liability order has been obtained before Bankruptcy then the council could still collect for the debt after Bankruptcy, however councils often won’t enforce the debt post-Bankruptcy.

The council wouldn’t be able to set up another attachment of earnings and can only collect for the debt using enforcement agents.

The loan given by your employer is a different matter and it would depend on what kind of a loan this is as to how it would be affected by going Bankrupt. If the loan was an advance form your employer to tide you over when your pay changed then this is unlikely to be impact the Bankruptcy unless you’d received a large cash lump sum which may be seen as an asset by the Official Receiver (OR) in a Bankruptcy.

If the debt is a loan such as from a bank with an official loan agreement then this could be affected by Bankruptcy as it’s likely to be included as a debt.

I assume it’s probably an advance from your employer and it wouldn’t be impacted.

With any debt solution it’s important to make sure it's the best solution for your situation. I’d suggest if you haven’t already, to speak with a debt advisor. This way you can explore all your options as there may be other solutions available for you.

If you’d like to discuss your options further you can find our contact details here.

Thanks
Rachael

willunhappy wrote: »

hi there looking for some advice.
I am now looking to get out of debt. This is looking like i have to go into bankruptcy.

1. have the council taking money from my wages to pay for back pay of council tax, would this stop or continue after bankruptcy
2. was give a loan by my company because i went from weekly pay to monthly pay, would i have stop paying back the loan to the company?

will