Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Floorwalker

Hi, hope you can help with this. Some 20 years ago for a very small debt due to circumstances I was made bankrupt. At the time we had just sold our home and with a joint profit of £72K they took my £36K and the debts which at the time I worked out to be less than £25K in total inc all bills etc should hjave been cleared. At the time I had around £64K in a private pension fund and another £11K in an opt out fund from the thatcher years. The trustees were worse than useless to the point of insultingly obstructive and lack of response. Years on I have never had an answer as to why at the time another £75K was removed from me and now at pension age I have to rely on the state rather than my own. The discharge came 3 years after inception

StepChange_Kirsty

Hi there,

Thanks for your post and welcome to the forum.

It sounds odd that your debts keep going up due to interest and charges. When you enter into an IVA, the creditors must freeze all interest and charges. If that IVA fails then the creditors can apply interest and charges backdated to when the IVA began. When the Bankruptcy was approved, interest and charges should have been frozen again.

The costs associated with Bankruptcy can be quite large and this may be what the Official Receiver is expecting you to pay from the equity in the property when it sells. I would recommend speaking your Official Receiver to find out why the debt seems to be increasing and you could also ask them to provide you with a breakdown of costs.

If it still doesn’t make any sense you could call the Insolvency Services helpline on 0300 678 0015 for further help and advice. They’re available Monday to Friday 9am to 5pm.

Regards,

Kirsty

Kthomas6 wrote: »

Hi; I was made bankrupt in August 2017 following a failed IVA. I have been paying £900 per month towards the bankruptcy (IPA) and am voluntarily selling my house to aid this. The problem is that the interest and charges are going up and up and my origional IVA was for £53K and now the debt has reached over £100K. I feel that they are making an example of me and setting me up to loose. I have been completely compliant and admit I have made bad financial decisions in the past, but 'm trying to get back on my feet and feel like I'm fighting a loosing battle. Can you help?

StepChange_Allen

Floorwalker wrote: »

Hi, hope you can help with this. Some 20 years ago for a very small debt due to circumstances I was made bankrupt. At the time we had just sold our home and with a joint profit of £72K they took my £36K and the debts which at the time I worked out to be less than £25K in total inc all bills etc should hjave been cleared. At the time I had around £64K in a private pension fund and another £11K in an opt out fund from the thatcher years. The trustees were worse than useless to the point of insultingly obstructive and lack of response. Years on I have never had an answer as to why at the time another £75K was removed from me and now at pension age I have to rely on the state rather than my own. The discharge came 3 years after inception

Hi there

Thanks for your message.

This is a difficult one to give any firm advice on because the OR (official receiver) process isn't something I'm overly familiar with; at least with something like this. What's clear is that the value of assets taken is way in excess of the debt that was included in bankruptcy. My understanding is that the OR's fees can stretch well into the multiple thousands of pounds, but I would be surprised if they were anywhere near an amount leaving you with nothing.

I'd suggest that you contact the OR to ask them for a breakdown of how the money they took from you has been broken down, and whether you're entitled to some of that money back. If you're not satisfied with their response, please have a look at the complaints process on the Insolvency Service website: https://www.gov.uk/government/organisations/insolvency-service/about/complaints-procedure

I hope you manage to get somewhere with this.

Allen

gellerbing

Hi,
I've asked for forms to make a start on a dro. I just wondered how long i should expect to recieve them? I tried emailing from the website twice but ive had no reply. By May ill have no money whatsoever so i want to get these forms done ASAP.

StepChange_Rachael

Hi

Thanks for posting.

It seems strange that you’ve not had a reply to your emails yet but email response times will depend on how many emails we’ve received into the department.

The quickest way for us to help you going forward is to give us a call. You can find the StepChange contact details here.

We’ll look forward to hearing from you.

Thanks
Rachael

Gellerbing wrote: »

Hi,
I've asked for forms to make a start on a dro. I just wondered how long i should expect to recieve them? I tried emailing from the website twice but ive had no reply. By May ill have no money whatsoever so i want to get these forms done ASAP.

willamy02

Hi

I have a number of Credit Card accounts (maxed out, approx 40k in total) and a couple of catalogues accounts and we are struggling to manage the payments as our household income over the past 18 months has taken a nose dive due to children growing up and leaving home etc (even after getting work) we are now trying to survive month after month on about £900 a month less income than bills and I have been trying to keep it going as long as I can but it seems time to make a decision.

My concerns are
1. Although all the accounts are in my name, my wife has a home run self employed beauty business that is fairly new and does not have a big turnover or profit anyway but we are scared that this will be looked at (it is was her dream which we brought to life) she is now worried it will be affected??

2. We have a motability vehicle for our disabled son which we are named drivers on but only personally have use of a cheap £300 Nissan Micra (that is registered to me) that the wife uses for running around for stock and for me to get to work on nights etc ..... will this be touched ???

3. I bank with Halifax and have an current account with overdraft facility which I have only gone into once, I would like to keep the account (without an overdraft of course) does this ever happen or is it always a case of freezing and getting a basic account???

4. Do you have to have stopped paying debts and get into arrears etc to apply or can I apply now before it goes any further.

and finally I went bankrupt back in 2005 as a younger man will deciding to do so again put me in a bad light with the OR or is this more common than I am thinking??? are they used to this sort of thing ???

Any advice would be really helpful as it even though I have been through it before it is still a scary thought

StepChange_Allen

willamy02 wrote: »

Hi

I have a number of Credit Card accounts (maxed out, approx 40k in total) and a couple of catalogues accounts and we are struggling to manage the payments as our household income over the past 18 months has taken a nose dive due to children growing up and leaving home etc (even after getting work) we are now trying to survive month after month on about £900 a month less income than bills and I have been trying to keep it going as long as I can but it seems time to make a decision.

My concerns are
1. Although all the accounts are in my name, my wife has a home run self employed beauty business that is fairly new and does not have a big turnover or profit anyway but we are scared that this will be looked at (it is was her dream which we brought to life) she is now worried it will be affected??

2. We have a motability vehicle for our disabled son which we are named drivers on but only personally have use of a cheap £300 Nissan Micra (that is registered to me) that the wife uses for running around for stock and for me to get to work on nights etc ..... will this be touched ???

3. I bank with Halifax and have an current account with overdraft facility which I have only gone into once, I would like to keep the account (without an overdraft of course) does this ever happen or is it always a case of freezing and getting a basic account???

4. Do you have to have stopped paying debts and get into arrears etc to apply or can I apply now before it goes any further.

and finally I went bankrupt back in 2005 as a younger man will deciding to do so again put me in a bad light with the OR or is this more common than I am thinking??? are they used to this sort of thing ???

Any advice would be really helpful as it even though I have been through it before it is still a scary thought

Hi there

Welcome to the forum and thanks for posting.

I'll answer these questions as best I can as you've asked them; please bear in mind that it's very difficult to give certain answers with bankruptcy, so I can only give my best thoughts on them:

1. I wouldn't have thought that your wife's business would be directly affected because she's not the one looking at going bankrupt. It is likely that her credit rating will be affected though as most married people are financially linked. If she relies on credit for stock or anything, there could be an impact on that. You could always contact Business Debtline to get more expert advice on this: www.businessdebtline.org

2. A car worth £300 is unlikely to be an issue as long as it's essential for use, which you getting to work would likely mean. I can't guarantee it but I'd be surprised if it was taken into the bankruptcy.

3. If you have debts with Halifax, they may not allow you to bank with them, but this isn't certain. Some banks will automatically downgrade a current account to a basic account if not, or possibly even still close; it's at their discretion. Accounts will at least be frozen for a short period when the bankruptcy goes ahead whilst transactions are checked.

4. No, you can go bankrupt at any time when you can no longer meet your financial commitments, there doesn't have to be a particular amount of arrears.

5. There's nothing to say that the previous bankruptcy will be any issue, though it's possible that the OR may discuss it with you and could explore why financial difficulty has arisen again, and whether it might after this bankruptcy. There's no way of knowing at this stage though. You could call the Insolvency Service to see if they could give you more certainty on this.

If you'd like us to have an impartial look at your finances, to see if bankruptcy is the best way forward, please find our contact details on our website: www.stepchange.org/Contactus

I hope this is helpful.

Allen

willamy02

Thank you for the advice

Abbs9

I was made bankrupt in 2009, discharged in 2010.
Would I be able to work as a trainer/coach in a conveyancing company?

StepChange_Allen

Abbs9 wrote: »

I was made bankrupt in 2009, discharged in 2010.
Would I be able to work as a trainer/coach in a conveyancing company?

Hi there

Thanks for posting.

This comes down to the discretion of the employer and what checks they do upon employing someone. As you were discharged from bankruptcy over 6 years ago it shouldn't show on your credit file anymore. However where relevant, companies will ask whether you've ever been declared bankrupt and of course you must answer truthfully. Them asking the question doesn't necessarily mean that a 'yes' will rule you out of the job though.

The best way to find out would be to speak (anonymously if you wish) to the employer before applying and ask whether this would be an issue, so that you don't waste any time if the answer is that it would be a problem.

It might also be worth trying the regulatory/governing body for their thoughts on it; they might be able to give you a good idea of the outcome.

Best wishes

Allen