Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Shellbob83

They haven’t even started the bankruptcy process yet but the document they signed does say;

‘We irrevocably acknowledge that the power of sale, as referred to in the mortgage terms and conditions in force at the time the mortgage deed was executed, is still exercisable.’

This bit worries me

Former_StepChange_Linsi

Good morning,

Thanks for your post and welcome to the forum.

A mortgage shortfall is a provable debt in bankruptcy, so your parents wouldn’t be liable for this debt after going bankrupt.

To the best of our knowledge signing this document before applying for bankruptcy shouldn’t cause any issues down the line, but it’s not something I’ve come across before. I’d recommend getting some legal advice or speaking to the Insolvency Service before signing anything, just to make sure it won’t have a negative impact.

If this document is a deed of acknowledgement, then as long as it’s signed before the bankruptcy order is approved the debt will still be written off.

If your parents were to sign a deed of acknowledgement after the bankruptcy order, they’d effectively be creating a new debt so this wouldn’t be written off.

I hope this helps,

Linsi

Shellbob83 wrote: »

They haven’t even started the bankruptcy process yet but the document they signed does say;

‘We irrevocably acknowledge that the power of sale, as referred to in the mortgage terms and conditions in force at the time the mortgage deed was executed, is still exercisable.’

This bit worries me

Shellbob83

Thank you. I have read a few things that have said if it was signed before applying for bankruptcy it will be ok so think I’m just going to hope for the best!

BeeCat

I cannot believe I am even having to ask this question but could somebody tell me how many times you can go bankrupt?

Yes, I have done it twice before, and NO I am not proud.

Mid 90s - Young and didn't know better.
2008 - Should have known better.
2018 - No choice!!

After 2 years from hell i now find myself in a position i never thought i would be in again and can see NO way out. It's a long and complex story which has led to me having to resign from a job of over 30 years for health reasons.

Please don't judge, i feel distraught and beside myself as it is. I never ever understood why somebody would take their own life because of money but now I can totally see why.

Former_StepChange_Linsi

Hi there,

Thanks for your post and welcome to the forum.

We’re always here to help and never to judge, so I’m glad you took the time to get in touch and explain your situation.

There isn’t a limit to the number of times you can go bankrupt, but there’s a greater risk you’ll receive a bankruptcy restriction undertaking or order if you go bankrupt more than once. This means you’ll still be discharged (usually after 12 months), but the restrictions will continue to apply for a further 2 to 15 years.

Although you’ve been bankrupt before I’d still recommend getting some advice just to make sure bankruptcy is the right option. You can do this online by using our Debt Remedy tool.

Dealing with debt isn’t easy at the best of times and having to manage health conditions on top of debts isn’t easy. If you need any additional support regarding your physical or mental health you can speak to your GP or organisations such as Mind or the Samaritans.

I hope this helps,

Linsi

BeeCat wrote: »

I cannot believe I am even having to ask this question but could somebody tell me how many times you can go bankrupt?

Yes, I have done it twice before, and NO I am not proud.

Mid 90s - Young and didn't know better.
2008 - Should have known better.
2018 - No choice!!

After 2 years from hell i now find myself in a position i never thought i would be in again and can see NO way out. It's a long and complex story which has led to me having to resign from a job of over 30 years for health reasons.

Please don't judge, i feel distraught and beside myself as it is. I never ever understood why somebody would take their own life because of money but now I can totally see why.

$izzle$

Good afternoon
I declared bankruptcy in November and although on disability benefits i am required to pay £100 a month IPA as i am in receipt of my late husbands works pension.
The pension increases every January usually by about £20 a month, however once I have informed Housing Benefit of this increase they adjust my benefit accordingly, which results in me being about £10 better off a month.
Do i inform the IPA team of this first, in order for them to increase my payments, or do i inform housing benefit and then inform the IPA team of what is left after that?
Also do i have to inform them of every little increase such as benefit increases of maybe a couple of pounds a month in April?

Thanks for your help

StepChange_Allen

$izzle$ wrote: »

Good afternoon
I declared bankruptcy in November and although on disability benefits i am required to pay £100 a month IPA as i am in receipt of my late husbands works pension.
The pension increases every January usually by about £20 a month, however once I have informed Housing Benefit of this increase they adjust my benefit accordingly, which results in me being about £10 better off a month.
Do i inform the IPA team of this first, in order for them to increase my payments, or do i inform housing benefit and then inform the IPA team of what is left after that?
Also do i have to inform them of every little increase such as benefit increases of maybe a couple of pounds a month in April?

Thanks for your help

Hi there

Thanks for posting.

I'm not completely certain about this as we don't really get involved in post-bankruptcy advice, but common sense may suggest that you contact DWP first to have the housing benefit re-calculated first so that you know the real increase in your income before advising the official receiver (OR).

I'm not sure how much of a change to your income is required to be declared but I'd advise to err on the side of caution for now and let them know of any changes; this way at least you're being completely transparent. They may take into account things like inflation in regards to your living costs like shopping and utilities, I'm not certain.

I'd recommend contacting the Insolvency Service enquiry line to give a more definite answer to these questions; their contact details can be found here: www.gov.uk/the-insolvency-service

I hope this helps

Allen

$izzle$

Thank you very much for your help.
I have sent the query off to The Insolvency Service as suggested.

Bluehat1

Considering bankruptcy.Debts are around 45k,all on credit cards. I now have more money going out than coming in,even just paying minimum amounts.
My income is from State benefits (pip,esa and housing benefit) plus a small personal pension.
Having done an SOA,I would have a few hundred pounds surplus every month in bankruptcy.
Could this money be taken from me as an IPA,even though it is Disability related?

Former_StepChange_Linsi

Hello

Thanks for your post and welcome to the forum.

When going bankrupt all income needs to be declared but disability living allowance (DLA), attendance allowance (AA) and personal independence payment (PIP) are not counted as income when working out an IPA. Other state benefits and pensions are classed as income when working out an IPA.

If you receive state benefits along with another non-benefit income (such as a private pension), an IPA can be made. Having said this, the IPA amount must not exceed the non-benefit income.

You can apply to go bankrupt through the GOV.UK website. If you get stuck completing the application or if you have any questions about the information you need to provide you can call the Insolvency Service Helpline on 0300 678 0015.

Before you make a decision I’d also recommend you use our online Debt Remedy tool, just to make sure bankruptcy is the right solution for you. It’s free to use and takes about 20 minutes to complete Here’s the link.

I hope this helps,

Linsi

Bluehat1 wrote: »

Considering bankruptcy.Debts are around 45k,all on credit cards. I now have more money going out than coming in,even just paying minimum amounts.
My income is from State benefits (pip,esa and housing benefit) plus a small personal pension.
Having done an SOA,I would have a few hundred pounds surplus every month in bankruptcy.
Could this money be taken from me as an IPA,even though it is Disability related?