Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Rachael

Hi

I’ve read the previous forum message to catch up, and I can appreciate your frustration here. As far as I’m aware and as Allen mentioned the amount your partner would have to pay into bankruptcy should be their share of what’s left over in the household budget. It shouldn’t include your share of what’s remaining after household bills and living costs have been paid.

This is to make sure that the person declaring bankruptcy isn’t paying towards all the household bills, leaving nothing remaining into the bankruptcy and the other people paying nothing towards the bills, leaving them with their full wage as surplus.

The Official Receiver will want to make sure all parties are paying a fair amount based on their income and then what is remaining and can be paid into the bankruptcy is a fair payment based on the bankrupts share only.

So ultimately the amount they set into the bankruptcy shouldn’t include your monthly surplus. If you feel that the amount they ask for isn’t fair then it’d be worth raising this with the OR.

Hope this helps.

Thanks
Rachael

rufusthedoofus wrote: »

Thanks for your response. My issue is that the excess from my income is not household income, and therefore not 'leftover household income that can be apportioned between us. We don't share finances, we don't have joint accounts, we only share household expenses (me 2/3 and him 1/3) so I won't be paying any more than that, and I'm happy for the OR to take me to court on that, because they are not my debts

SammyJx

Good afternoon,
We ad a successful dro which has been active since 20th July 2018.!
Brighthouse was excluded from this as we have a tv with them and this was deemed a necessity. Our washing machine has just broke and we are in dire need of a new one as with 2 young kids I do washing literally everyday. There is a washing machine on brighthouse which over the repayment time is less then £500. Can I take this out without it affecting dro or not?
Thank you

tyrrellracer

Hi,

I am 38 with a good job earning around 30k a year. I have around £40k worth of personal, unsecured debt, and an additional 18k owing to my mum.
I am struggling to make payments, using credit to pay credit. I have no assets (other than a car worth about 2k which I need for my job which is driving based)
I will have about £250 surplus to pay creditors in either an IVA or IPA.
My question is please, IVA or Bankruptcy?
I can see Bankruptcy will be over three years (IPA) not five (IVA) but it looks like I’ll not be able to keep any portion of overtime in an IPA, whereas I’ll get around 50% of any overtime in an IVA. Plus, am I right in thinking I can still pay back my mum each month from an IVA, and not in a IPA.
Thanks

StepChange_Allen

SammyJx wrote: »

Good afternoon,
We ad a successful dro which has been active since 20th July 2018.!
Brighthouse was excluded from this as we have a tv with them and this was deemed a necessity. Our washing machine has just broke and we are in dire need of a new one as with 2 young kids I do washing literally everyday. There is a washing machine on brighthouse which over the repayment time is less then £500. Can I take this out without it affecting dro or not?
Thank you

Hi Sammy

Thanks for posting.

To the best of my knowledge there's nothing officially stopping you from doing this, however they may credit check you which could result in the application being declined. You'd also need to look at affordability. If you've got a DRO then your monthly surplus must be less than £50; can you afford the payments?

It's also important to point out that you can pay 2-3 times as much for items from Brighthouse than their actual retail value, so have you considered looking elsewhere? Or perhaps look on local buy and sell sites (e.g. Facebook, Gumtree) to see if anyone is giving away or selling a washing machine. This will prevent you getting back into debt before your DRO even finishes.

I hope this is helpful.

Allen

StepChange_Allen

tyrrellracer wrote: »

Hi,

I am 38 with a good job earning around 30k a year. I have around £40k worth of personal, unsecured debt, and an additional 18k owing to my mum.
I am struggling to make payments, using credit to pay credit. I have no assets (other than a car worth about 2k which I need for my job which is driving based)
I will have about £250 surplus to pay creditors in either an IVA or IPA.
My question is please, IVA or Bankruptcy?
I can see Bankruptcy will be over three years (IPA) not five (IVA) but it looks like I’ll not be able to keep any portion of overtime in an IPA, whereas I’ll get around 50% of any overtime in an IVA. Plus, am I right in thinking I can still pay back my mum each month from an IVA, and not in a IPA.
Thanks

Hi there

Thanks for posting.

You've asked some good questions there and raised some good points. I'm not able to give debt solution advice on here though because I don't know the full picture.

We provide free advice and are able to assess which solution(s) suit you best once we have a full budget and list of debts in front of us.

You can either register over the phone or via our online Debt Remedy tool, details can be found here: www.stepchange.org/Contactus

I hope this helps and we look forward to speaking with you.

Allen

NIC71

Hi,
I will be filing for Bankruptcy in the next couple of weeks.
I'm a sole trader and my income dipped dramatically in the last 12 months.
I managed to pay all my bills including the crippling minimum payments on my credit card debts up until 5 months ago. In doing so I didn't have enough to pay my tax bill in July.
I called the HMRC and set up a payment plan which cleared this month.
I can't start repaying my credit cards and save for my tax bill each month so Bankkruptcy is my only option. I've spoken to step change/ Business debtline, and my creditors on a regular basis since July. So all are aware of the situation.
I have just opened a basic bank account and transferred all my priority bills direct debits and I'm being paid into that account now. However I've read that once the bankruptcy is accepted your bank account is frozen. Can anyone please helps with my questions?
1/ What happens to my direct debits? I'm worried my rent/water/council tax/gas etc won't get paid?
2/ Even if discharged after 12 months, and if still paying an IPA for 3 years - are you still on a restricted budget?
I live alone with my teenage son. The worry is killing me. I'm not sure I can cope much longer and my work is starting to suffer.
I've googled this question a thousand times and can find no answer.
Thank you in advance
P.S. I have spoken to my landlord and as I am a good tenant he is happy for me to stay which is a huge relief.

jamiesmack

Hi,

It has been advised to me on this forum that I should not declare my wifes income during my bankruptcy, as she earns considerably more than me.

Is it actually possible to do this? as everywhere I have read has said I have no choice but to declare it.

nikkinoo75

Hi,
So Bankruptcy has all gone through smooth as most people have detailed on here previously

We have agreed the IPA payment amount and the IP has confirmed that they have sent the information off to Clarke Willmott that deal with collections.

My questions is, when will they expect the first payment? In our initial letter they said a payment by 13th Dec but the paperwork has been slow. Is it possible to agree with this firm that payments can come out on the 1st of the month starting january?

Thank you any help welcomed

Former_StepChange_Joe

Hello


Thanks for posting and welcome to the forum.


First of all, I’m really sorry to hear that you’re struggling with worry. If this is affecting your health and well-being, and you need some further support with this, I recommend speaking to your GP. If you feel you’re struggling to cope and need to talk to someone, you can also contact Samaritans 24/7 on 116 123.

To answer your questions:

1) All bank and building society accounts in your name will be frozen when you go bankrupt. This happens quickly after the bankruptcy is approved.

The accounts will remain frozen for around two days while the OR conducts initial investigations into your affairs.

While the account is frozen, Direct Debit and standing order payments won’t be honoured, and it won’t be possible to make payments into the account. I’d recommend trying to pay your essential bills directly ahead of the account being frozen, to avoid any missed payments. This can however make these bills more expensive.

You could also use someone else’s bank account – you could get paid into a partner’s or family member’s account with their permission. If you begin doing this before the bankruptcy, it will need to be declared as ‘other’ in section 4 (Assets) of the online application, and the OR may request bank statements as proof.

2) You will be discharged from their bankruptcy twelve months after the date of the bankruptcy order. This means your bankruptcy restrictions end, unless they’ve been extended by a bankruptcy restriction undertaking or order.

While you’ll no longer be subject to the restrictions of the bankruptcy after discharge, you’ll still be obliged to pay the agreed income payment arrangement (IPA). An IPA last for 36 months; it can sometimes be shorter than this, but this is unusual. The OR may not set up an IPA straight away, but it must be set up before you are discharged. If the IPA is set up just before discharge, this means your final IPA payment could be almost four years after the date of the bankruptcy order.

I hope you’ve found this helpful.


Joe

NIC71 wrote: »

Hi,
I will be filing for Bankruptcy in the next couple of weeks.
I'm a sole trader and my income dipped dramatically in the last 12 months.
I managed to pay all my bills including the crippling minimum payments on my credit card debts up until 5 months ago. In doing so I didn't have enough to pay my tax bill in July.
I called the HMRC and set up a payment plan which cleared this month.
I can't start repaying my credit cards and save for my tax bill each month so Bankkruptcy is my only option. I've spoken to step change/ Business debtline, and my creditors on a regular basis since July. So all are aware of the situation.
I have just opened a basic bank account and transferred all my priority bills direct debits and I'm being paid into that account now. However I've read that once the bankruptcy is accepted your bank account is frozen. Can anyone please helps with my questions?
1/ What happens to my direct debits? I'm worried my rent/water/council tax/gas etc won't get paid?
2/ Even if discharged after 12 months, and if still paying an IPA for 3 years - are you still on a restricted budget?
I live alone with my teenage son. The worry is killing me. I'm not sure I can cope much longer and my work is starting to suffer.
I've googled this question a thousand times and can find no answer.
Thank you in advance
P.S. I have spoken to my landlord and as I am a good tenant he is happy for me to stay which is a huge relief.

Former_StepChange_Joe

Hello

This is correct, you are obliged to declare this. You must provide proof of income and spending and details of your spouse or partner’s income.

Thanks

Joe

jamiesmack wrote: »

Hi,

It has been advised to me on this forum that I should not declare my wifes income during my bankruptcy, as she earns considerably more than me.

Is it actually possible to do this? as everywhere I have read has said I have no choice but to declare it.