Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Allen

brightonbelle wrote: »

Although I now appreciate that I have to reluctantly sell my home, I wanted to check that if I negotiate my share of the equity I assume all the associated selling fees are deducted from my husbands, or rather the trustees, share not mine?

I also assume that as the equity doesn't cover his debts then he will have to continue paying the IPO until debt is cleared? It will take years and years to pay what he owes.

With this in mind I really do have to get the best deal for me and the children, and this means getting more than half the equity as he will be unable to pay any maintenance payments, also as I will have to accept benefits and housing benefit as my salary will not cover the rent even!! - I assume this is taken into account? Is this something that I can negotiate?

If I start divorce proceedings I assume that this will go in my favour and that he won't have a claim on my share?

Hi there

Thanks for posting.

I'm afraid I can't give you definite answers to your queries because some of what you mention is down to legal decisions regarding your split from your husband and we're not legally trained. I wouldn't be able to say whether you'll be able to keep more equity or not as there would be a number of factors that could affect that.

It's possible that the Insolvency Service may be able to give you some advice regarding things like whether the selling fees would come out of your husband's equity or if they'd be taken before the split of equity. Unfortunately this is a little too specialised bankruptcy advice for me. Contact details for the Insolvency Service can be found here: www.gov.uk/the-insolvency-service

It may be worth getting some legal advice regarding the situation here to make sure you know where you stand. I'm sorry I can't answer your questions myself.

Best wishes.

Allen

doorstep54

Hi stepchange wanted to ask when you become discharged from bankruptcy what does it mean I know its you don't owe any one money any more, but what else does it mean

tigerfeet2006

brightonbelle wrote: »

Although I now appreciate that I have to reluctantly sell my home, I wanted to check that if I negotiate my share of the equity I assume all the associated selling fees are deducted from my husbands, or rather the trustees, share not mine? They will come from the lump sum which will then be divided between you. If you have put any more money in than him at any point you may be able to argue a bigger share.

I also assume that as the equity doesn't cover his debts then he will have to continue paying the IPO until debt is cleared? It will take years and years to pay what he owes. No he will not run for years and years. He can only get an IPA in the first year of BR. If he hasn't got an IPA within the 1st year he won't ever get an IPA. If he has an IPA then maintenance is an allowed expence for him. An IPA can only last 3 years and no more, so not years and years. If he hasn't paid back the OR and his debts in this time it doesn't mean he has to keep paying.

With this in mind I really do have to get the best deal for me and the children, and this means getting more than half the equity as he will be unable to pay any maintenance payments, also as I will have to accept benefits and housing benefit as my salary will not cover the rent even!! - I assume this is taken into account? Is this something that I can negotiate?

If I start divorce proceedings I assume that this will go in my favour and that he won't have a claim on my share?

He doesn't have a claim on your share at all.

threeofus

Thanks Tigerfeet, so I will still effectively have to pay the selling costs albeit half of them..got to try and buy him out I think, so looking at all I can do to do that. I just hope the mortgage company - who have been great - will agree to it, I have passed all the affordability tests to pay as it is now, but I am going to work full time and take on extra work to keep it - as I said before I'd be better off doing that than selling and renting as the rent is double the mortgage as it is now. Wish me luck!!

jen1784

Hello there, I hope you can help me ( and my husband).


My husband got himself into a mess with Barclaycard and after switching from weekly to monthly pay he was struggling to meet the minimum payments. He contacted Barclaycard and they went through his income and expenses and arrived a much lower monthly payment. The agreement would be sent out in writing, but this never arrived. They advised that this would have an adverse affect on his credit file but at that time there was no other option. Although this plan had been agreed with Barclaycard they failed to action it and continued to take the original minimum payment. Husband panicked and cancelled his direct debit for March as he would have gone overdrawn.
He told me about the mess in April and we agreed that the monhtly amount should be paid from our household bills account. So in April we paid off the March payment arrears and also the full April payment. We then set up a direct debit for more than the minimum payment and huband phoned Barclays to advise that he could now afford to pay the minimum payment again, so we thought the account would be fine, and there would not be a mark on his credit file.
Monthly direct debit has been paid each month, so we thought everything was back to normal. Until yesterday when we received 2 letters from Barclaycard one saying that we had failed to act on a default notice issued previously and another advising that a monthly repayment plan has been agreed, which coincidently is the same as the monthly direct debit amount that we set up earlier. Both letters were dated 16th August.
We had no idea that the account was in default, we have not received a formal default notice and we are now totally confused by the situation.
Any advice on how we proceed with Barclaycard with a view to getting the default removed? Or, should we stay in default so that the account gets paid off quicker....do we even have a chance to reverse what they have done?

StepChange_Private_Messages

Hi Jen,

Thanks for your post.

I’m sorry to hear your husband has been struggling with his creditors. Being paid weekly when most bills are paid monthly can get very confusing.

I’m very surprised Barclaycard have issued a default notice after only one missed payment which was subsequently paid the next month. In our experience they would normally only issue a default notice after 3 to 6 months of missed or reduced payments.

It’s up to you and your husband if you would like to try to get the default removed. To do this you need to start by making a formal complaint to Barclaycard in writing to explain the account is up to date and was at the time of the default. You can find the Barclaycard complaints process here. Barclaycard have 8 weeks to respond to the complaint. If they’ve not responded within this time or you’re unhappy with the response you can then refer the matter to the Financial Ombudsman Service who can review the complaint further.

Having a default notice doesn’t necessarily mean that the debts will be paid off more quickly as the creditor can still charge interest and charges. However, once the default is issued the creditor may more willing to freeze these.

If your husband is struggling with debts generally I would recommend he gets in contact with us so that we can provide additional help and advice. There are a couple of ways he can access our service:

• Firstly, he can use the Debt Remedy tool within our website. This is an anonymous, self-help tool which will guide him through the process of putting a budget together in his own time and will recommend the right solution for your situation.

• Alternatively, if he would prefer to speak to us over the phone, he can call our Helpline on 0800 138 1111 and have a debt advice session with one of our specialist advisors. We are open from 8am to 8pm Monday to Friday and 8am to 4pm on Saturdays. Calls are free from all landlines and major mobile phone networks.

I hope this helps.

Kirsty

jen1784 wrote: »

Hello there, I hope you can help me ( and my husband).


My husband got himself into a mess with Barclaycard and after switching from weekly to monthly pay he was struggling to meet the minimum payments. He contacted Barclaycard and they went through his income and expenses and arrived a much lower monthly payment. The agreement would be sent out in writing, but this never arrived. They advised that this would have an adverse affect on his credit file but at that time there was no other option. Although this plan had been agreed with Barclaycard they failed to action it and continued to take the original minimum payment. Husband panicked and cancelled his direct debit for March as he would have gone overdrawn.
He told me about the mess in April and we agreed that the monhtly amount should be paid from our household bills account. So in April we paid off the March payment arrears and also the full April payment. We then set up a direct debit for more than the minimum payment and huband phoned Barclays to advise that he could now afford to pay the minimum payment again, so we thought the account would be fine, and there would not be a mark on his credit file.
Monthly direct debit has been paid each month, so we thought everything was back to normal. Until yesterday when we received 2 letters from Barclaycard one saying that we had failed to act on a default notice issued previously and another advising that a monthly repayment plan has been agreed, which coincidently is the same as the monthly direct debit amount that we set up earlier. Both letters were dated 16th August.
We had no idea that the account was in default, we have not received a formal default notice and we are now totally confused by the situation.
Any advice on how we proceed with Barclaycard with a view to getting the default removed? Or, should we stay in default so that the account gets paid off quicker....do we even have a chance to reverse what they have done?

jen1784

Hi Kirsty, Thank you for your response.


My husband has now spoken to Barclaycard, although he hasn't spoken to anyone in the Default department as no one is answering the phone.


The person he did speak to did advise that his account was in deafult from the date he phoned up to say he could no longer afford the minimum monthly payment (around January I think). It was agreed at that time that he would pay a smaller amount each month. There was a letter sent out by Barclaycard confirming the lesser amount and then they say the account was closed. It was at this point that the account was put into default.


However, they never amended the direct debit and continued to collect the higher amount from my husbands bank account. In addition, the account was still accessable online. When my husband cancelled the March Direct debit Barclaycard demanded payment of the full minimum payment arrears in the next month (April), and this was also shown on my husbands account online. The March and April amounts were paid via thier website in April and the direct debit was set up. It is our understanding that although Barclaycard set up this agreement for the lesser amount they never actioned it, therefore we have always stayed within the terms and conditions on the orginal contract, apart from 1 late payment.


As we had already complained about the way this has been handled and received a token amount of compensation Barclaycard say they can no longer deal with any complaint as the account is now closed. They have told to us to complain the Financial Ombudsman instead as they are the only ones who can get the default removed. Is this correct or are we being fobbed off again?

Butts

In Section 4 of the above it asks about any pensions or life insurances you have cashed in over the last 5 years.

When I answered yes in my dummy run it does not ask for any further details such as amount or name etc.

I find this strange.

I had a small employment pension that I cashed in a couple of years ago resulting in an after tax payment of about £500.

Is my form flawed or is this normal - just about everything else they have asked for amounts, policy numbers and name of company etc.

StepChange_Kirsty

Hi Jen,

Thanks for your reply.

It does seem strange that the account was put into default in January despite no actual payments being missed. As I mentioned in my previous response, it is possible that they could default the account in March when there was actually a missed payment. However, in our experience this doesn’t usually come for three to six months and the default notice always gives an opportunity to catch up with repayments which you have subsequently done.

If Barclaycard feel that they have resolved the complaint it is correct that the next step would be to contact the Financial Ombudsman Service (FOS) to investigate this further. If your complaint is upheld by the FOS, they can make suggestions to Barclaycard about how to resolve the issue including suggesting they remove the default notice.

The alternative is that your husband can apply to have a notice of correction to his credit file which is a short statement up to 200 words to explain the cause of the debt or why he thinks information in the credit report is misleading. This means that if he applies for credit in the future, the lender will be able to take the notice into account when making a decision. He would need to do this with all three credit reference agencies and they have more information about the notice of corrections here; Experian, Equifax, Call Credit.

All the best

Kirsty

jen1784 wrote: »

Hi Kirsty, Thank you for your response.


My husband has now spoken to Barclaycard, although he hasn't spoken to anyone in the Default department as no one is answering the phone.


The person he did speak to did advise that his account was in deafult from the date he phoned up to say he could no longer afford the minimum monthly payment (around January I think). It was agreed at that time that he would pay a smaller amount each month. There was a letter sent out by Barclaycard confirming the lesser amount and then they say the account was closed. It was at this point that the account was put into default.


However, they never amended the direct debit and continued to collect the higher amount from my husbands bank account. In addition, the account was still accessable online. When my husband cancelled the March Direct debit Barclaycard demanded payment of the full minimum payment arrears in the next month (April), and this was also shown on my husbands account online. The March and April amounts were paid via thier website in April and the direct debit was set up. It is our understanding that although Barclaycard set up this agreement for the lesser amount they never actioned it, therefore we have always stayed within the terms and conditions on the orginal contract, apart from 1 late payment.


As we had already complained about the way this has been handled and received a token amount of compensation Barclaycard say they can no longer deal with any complaint as the account is now closed. They have told to us to complain the Financial Ombudsman instead as they are the only ones who can get the default removed. Is this correct or are we being fobbed off again?

StepChange_Kirsty

Hi there,

Thanks for your message.

I don’t think your form is flawed; it’s likely that when you have your Bankruptcy interview with the Official Receiver (OR) they will ask for more details about this at the time.

If you’re concerned about any part of the form I’d recommend speaking to the Insolvency Service helpline who’ll be able to give you further help and advice in completing the paperwork. Their direct number is 0300 678 015 and they’re available Monday to Friday 9am to 5pm.

I hope this helps

Thanks

Kirsty

Butts wrote: »

In Section 4 of the above it asks about any pensions or life insurances you have cashed in over the last 5 years.

When I answered yes in my dummy run it does not ask for any further details such as amount or name etc.

I find this strange.

I had a small employment pension that I cashed in a couple of years ago resulting in an after tax payment of about £500.

Is my form flawed or is this normal - just about everything else they have asked for amounts, policy numbers and name of company etc.