Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

jenfleur

Hi
I hope you can help...
On advice from payplan (my dm company) and the national debt line I stopped paying mortgage in October.
I am in negative equity by about 30k and there are 4 of us in a 1 bed property.
I stopped paying the management company at the same time a (leasehold property - we pay buildings ins to them) They had sent me a letter saying they had contacted my mortgage company and the money I owed them was added to my mortgage.
Today I receive a letter from court - they are trying to get the money I owe through court...
Firstly does this mean the letter they sent about money being added to mortgage was a threat? Surely they can't ask for the money twice
Secondly as I'm planning to go BR as soon as mortgage company repossess my house I was advised to not pay any debts as would appear to be picking and choosing what debt to pay...what should I do with these court documents?
Ignore?
Please help - I am so confused and scared :-(
Thanks so much.

Charlie0802

Hi there, this is my SOA.
Can you advise what I am likely to be recommended when I have my appt with a Step Change Advisor on Tuesday and also what I should be doing right now. As in opening a Barclays Cash Card account, cutting DD's to save for either a DRO or BK etc etc. I want to get the ball rolling ASAP and feel useless sat here until Tuesday doing nothing. Thanks.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 730
Other income............................ 438
Total monthly income.................... 1168

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 20
Electricity............................. 88
Gas..................................... 40
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 20
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 13
Groceries etc. ......................... 300
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 1157


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
MBNA...........................463.......25....... .25.7
Barclaycard....................898.......21....... .28.9
Halifax CC.....................563.......23........26.4
ChildTax Overpayment...........525.......25........0
Clockwise......................650.......80....... .8.9
Studio.........................600.......33....... .39.7
Santander......................950.......40....... .0
O2.............................130.......0........ .0
Npower.........................470.......0........ .0
Vodafone.......................702.......0........ .0
Shop Direct....................2244......62........35.7
Shop direct....................6551......98........37.9
Total unsecured debts..........14746.....407.......-


Monthly Budget Summary
Total monthly income.................... 1,168
Expenses (including HP & secured debts). 1,157
Available for debt repayments........... 11
Monthly UNsecured debt repayments....... 407
Amount short for making debt repayments. -396

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,746
Net Assets.............................. -14,746

Please note DD's with 0 next to them are in arrears and haven't been paid, one's with values next to them other than the second shop direct I have been paying so far by any means necessary, cutting back on food bill, borrowing from parents etc etc. I just can't do it any more.
There are two shop directs on there due to holding 2 accounts with them at separate interest rates and groceries bill as high due to caring for 4 children 50% of the time, Electricity as high as having to pay for an electric heater as the heating is VERY expensive £10 for 8 hours on having it on.

StepChange_James

jenfleur wrote: »

Hi
I hope you can help...
On advice from payplan (my dm company) and the national debt line I stopped paying mortgage in October.
I am in negative equity by about 30k and there are 4 of us in a 1 bed property.
I stopped paying the management company at the same time a (leasehold property - we pay buildings ins to them) They had sent me a letter saying they had contacted my mortgage company and the money I owed them was added to my mortgage.
Today I receive a letter from court - they are trying to get the money I owe through court...
Firstly does this mean the letter they sent about money being added to mortgage was a threat? Surely they can't ask for the money twice
Secondly as I'm planning to go BR as soon as mortgage company repossess my house I was advised to not pay any debts as would appear to be picking and choosing what debt to pay...what should I do with these court documents?
Ignore?
Please help - I am so confused and scared :-(
Thanks so much.

Hi Jenfleur,

Thanks for getting in touch. As Payplan have been giving you advice and know more about your situation it might be worth giving them a call to check how best to proceed.

Having said that, if you've received court papers about the debt to the management company then it's likely to be best to reply.

If it's the initial stages of a county court judgment then you can return the documents and make an offer to repay by instalments (which can be set low if you can show the courts you've not got much spare monthly income).

If they are enforcing the debt through the courts then it sounds like it wasn't included within the mortgage. You can check with your mortgage lender or management company to check this though.

I hope this helps. I'd expect that Payplan should be able to give you more detail advice about how best to fill our and return the court papers you've received.

James

StepChange_James

Charlie0802 wrote: »

Hi there, this is my SOA.
Can you advise what I am likely to be recommended when I have my appt with a Step Change Advisor on Tuesday and also what I should be doing right now. As in opening a Barclays Cash Card account, cutting DD's to save for either a DRO or BK etc etc. I want to get the ball rolling ASAP and feel useless sat here until Tuesday doing nothing. Thanks.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 730
Other income............................ 438
Total monthly income.................... 1168

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 20
Electricity............................. 88
Gas..................................... 40
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 20
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 13
Groceries etc. ......................... 300
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 1157


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
MBNA...........................463.......25....... .25.7
Barclaycard....................898.......21....... .28.9
Halifax CC.....................563.......23........26.4
ChildTax Overpayment...........525.......25........0
Clockwise......................650.......80....... .8.9
Studio.........................600.......33....... .39.7
Santander......................950.......40....... .0
O2.............................130.......0........ .0
Npower.........................470.......0........ .0
Vodafone.......................702.......0........ .0
Shop Direct....................2244......62........35.7
Shop direct....................6551......98........37.9
Total unsecured debts..........14746.....407.......-


Monthly Budget Summary
Total monthly income.................... 1,168
Expenses (including HP & secured debts). 1,157
Available for debt repayments........... 11
Monthly UNsecured debt repayments....... 407
Amount short for making debt repayments. -396

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,746
Net Assets.............................. -14,746

Please note DD's with 0 next to them are in arrears and haven't been paid, one's with values next to them other than the second shop direct I have been paying so far by any means necessary, cutting back on food bill, borrowing from parents etc etc. I just can't do it any more.
There are two shop directs on there due to holding 2 accounts with them at separate interest rates and groceries bill as high due to caring for 4 children 50% of the time, Electricity as high as having to pay for an electric heater as the heating is VERY expensive £10 for 8 hours on having it on.

Hi Charlie,

It's an interesting question. I'd not want to second guess what your advisor will say - but it's clear from your SOA that things are tight for you financially at the moment.

Depending on your assets and if your situation is going to change you might be able to apply for a DRO (http://moneyaware.co.uk/2013/02/debt-relief-orders-dros-everything-you-wanted-to-know-but-were-afraid-to-ask/) but I'm speculating a little bit.

Another option would be to make reduced payments but your advisor will be able to help you weigh up the pros and cons of each option.

Moving to a basic bank account with a bank you don't have any debts with wouldn't be a bad idea but you could wait until your appointment if you'd like to speak to us before starting this.

If you've any payments due to your debts between now and Tuesday then I'd recommend contacting the company, giving them your StepChange reference number and explaining you've got the appointment coming up soon. Most creditors will then back off untio you've had some advice.

Good luck with your appointment.

James

jenfleur

Thank you for your reply James.
I'll contact payplan :-)

so_very_confused

Posted this on the form with little response, can you give me any guidance?Hi hope someone can give me advice. I am going BR in the next few months. I am currently looking for a place to rent. Given the cost of housing it seems unlikely that I will be able to remain in my current location, probably having to move 10 - 15 miles away. This will put me in a different court area. I cant remember where I heard it but I believe you cannot apply for BR straight away in a new area, is this so? If this was the case would I be better applying to my current court the minute I have a tenancy but will have not given the house to voluntary repossession stating this address and be dealt with here even though by the time I get to court I may have moved and certainly by OR interview will have done?Also do I put current mortgage payment down or what I intend to pay when I move (very limited budget) on my SOA.
Thank you

StepChange_James

so_very_confused wrote: »

Posted this on the form with little response, can you give me any guidance?Hi hope someone can give me advice. I am going BR in the next few months. I am currently looking for a place to rent. Given the cost of housing it seems unlikely that I will be able to remain in my current location, probably having to move 10 - 15 miles away. This will put me in a different court area. I cant remember where I heard it but I believe you cannot apply for BR straight away in a new area, is this so? If this was the case would I be better applying to my current court the minute I have a tenancy but will have not given the house to voluntary repossession stating this address and be dealt with here even though by the time I get to court I may have moved and certainly by OR interview will have done?Also do I put current mortgage payment down or what I intend to pay when I move (very limited budget) on my SOA.
Thank you

Hello,

The Insolvency Service have a booklet about going bankrupt which you can find here (http://webarchive.nationalarchives.gov.uk/+/http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/howtopetition.pdf) on page six it says:

Generally, you should take your petition for bankruptcy to the court that deals with the area
where you have lived or traded for the longest period in the previous 6 months

So it's not that you can't go bankrupt during that 6 month period - just that you should use the court for the area you've lived in for the majority of the last 6 months.

The wording is a little vague in the insolvency service booklet, so it's probably easiest to speak to someone at your local county court and check with them.

When you come to fill out your bankruptcy application it will be best to fill out the form with details of your current situation. There's a section where you can add additional notes to let them know if your situation is going to change in the near future.

Hope this helps.

James

so_very_confused

Thanks James, that completely clear and is better for me.

teacher2mum

Hi there. I hope someone can help but it's complicated. 18 months ago I was adviced to go bankrupt by Citizen's advice. However, I was with my hubby then and he refused to allow me in regard to losing 'his' inheritance we had ploughed into renovating the home over the years.
Today we have been separaed a year and I live in a house we used to rent out. We paid cash, so I am living here for free. He pays no CSA as he says he has one or a combination of the three children 6 nights a fortnight. During the credit crunch my business took a dive too and up until 5months ago I kept paying £900 for an empty shop and business rates. Hubby stripped it out and we had planning permission for one flat and a a learning centre downstairs. However, it stayed stripped out and nothing was ever put back..So it's an empty shell where I still pay half business rate and half council tax and monthly n power bill. So it brings in no revenue. 6 months ago when I realised I wouldn't be able to pay for the first time I informed my business manager at Natwest...it is now being dealt with by their recovery team and we re due a 6th payment today and still no reply as to what help they can offer.
I did a 3 years business plan last month and sent details of my income. explaining since separating how I have borrowed from family to fund my masters and BDA courses. I am now still a tutor but by day a workplace assessor for the British Dyslexia !!! and a workplace Coach for another company and I run awareness days for line managers so should be able to afford to pay again. However, it turns out they were 2 business loans not mortgages and so I couldn't have a mortgage holiday and now I have submitted plans for converting it back into two flats in a flat filled area, they are now saying that throws another curve ball in now as it will be a buy to let...Grr... Before they advised me to go bankrupt I had the same guy around to value it and he reckoned it was 45k less than i paid for which will give me a 30k deficit.
I went to the solicitors to start divorce but had no funds to fight hubby as he was adamant he would not pay for my share of that deficit as it was all in my name... He has now sold our house for 240 k..we paid 192k but it should have gone through weeks ago but he is dragging his heels. I get to keep this house (which has a charge on it for one of the loans) with Natwest plus I should have around 30k cash...for which I incorported into the renovations for natwest. My problem is I was suggested in my plans that I would be able to afford to pay today again but I have not heard back...I don't see why throwing £600 in a pot which is already 3k overdrawn will help and i'll still get £70 charges for having a unofficial overdraft. The lady herself didn't know why my bank manager didn't simply give me a 3k overdraft as I didn't have one with them..My issue is I owe 25 k in credit cards which I have debt management on which I did myself 18 months ago..all except Nationwide are happy with that. But the week hubby closed our account with them they came after me for the full 5 k, however I am currently going through their debt management team before it is handed over to bailiffs.
I am affording the debt management nicely and can start paying the mortgage next month now I have extra income coming in, but it's all contractual. The reason I couldn't pay today was because, during the snow last week the boiler broke, I have had a gas leak and the boiler drained water into the mains electrics. Therefore, I have spent well over 1k to get it all renewed. I emailed the bank this morning to explain and to ask if they had a resolution as obviously I am getting further overdrawn by the day and over the last 6 months they have not helped me atall.
My issue if this 30k cash from the house....Can I salvage that somehow, maybe have it put into the kids names instead of for me? I oke 6 1/2 k to family and need a car for work, as hubby says the family car is his..in all honesty I am paying out every month as it either breaks down or something else breaks. I am thinking if the bank don't help me they will want me to sell the business property and i will have a short fall of 30 k ish, but they have first charge on this house I own, but have to have somewhere to live. what are my options and will my ex be liable as we were married since 1997 and not divorced yet. Plus eventhough it is all in my name we made the decisions together, but I cannot prove that. Thankyou so much in advance..I wonder if I should make another appointment with the guys at Citizen's advice?

StepChange_Private_Messages

teacher2mum wrote: »

My issue if this 30k cash from the house....Can I salvage that somehow, maybe have it put into the kids names instead of for me? I oke 6 1/2 k to family and need a car for work, as hubby says the family car is his..in all honesty I am paying out every month as it either breaks down or something else breaks. I am thinking if the bank don't help me they will want me to sell the business property and i will have a short fall of 30 k ish, but they have first charge on this house I own, but have to have somewhere to live. what are my options and will my ex be liable as we were married since 1997 and not divorced yet. Plus eventhough it is all in my name we made the decisions together, but I cannot prove that. Thankyou so much in advance..I wonder if I should make another appointment with the guys at Citizen's advice?

Hello,

If you're already dealing with someone at the CAB then I'd suggest you get back in touch - as they'll be familiar with your situation and save you having to go through it all again.

I'm presuming the question you ask about the £30k cash payment relates to how it would be seen in bankruptcy. If it was thought that you'd tried to hide money to keep it out of bankruptcy then the transactions could be reversed and they might apply a bankruptcy restrictions order, which lengthens the term of your bankruptcy.

If these debts are just in your name then it's unlikely your ex will be liable unless there was a specific order made in the divorce proceedings but I'd recommend getting some legal advice about the prospects of being able to do this.

If you'd like more in depth advice and the CAB aren't availabe then you might want to give our helpline a call (http://www.stepchange.org/Contactus.aspx).

Kind regards

James