Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

nick31

Hi - we were with CCCS / Stepchange throughout our DMP/IVA/Bankruptcy journey. IU had one particular debt that was referred to a solicitors after a debt company and while we were going through our bankruptcy proceedings they filled a CCJ in May 2016, our Bankruptcy order was issued in July 2016. I have never been contacted about the CCJ, but it has come up on my credit report when they did a search (which looked particularly bad as I thought it was discharged so didn't declare it). Can you advise - should this debt have been part of our bankruptcy, and therefore even if the CCJ alert is on my credit history it should show as resolved rather than an outstanding amount (about £200)? I have contacted the solicitors to check but am waiting for a callback from an advisor. I really need to know how to approach this so that I reflect it properly in any tenancy applications going forward. thanks

StepChange_Rachael

Hi

Thanks for posting.

In bankruptcy, any debts taken out prior to bankruptcy would be legally written off once you’d been discharged. As they went for the CCJ two months before you filled for bankruptcy, this debt was definitely a debt prior to bankruptcy and therefor would have been written off. There are some debts that can’t be included in bankruptcy, but these wouldn’t be CCJs, these debts include magistrates’ fines, debts taken fraudulently and child maintenance arrears.

Notes of the debts may still show on your credit file as notes will normally last for six years from the day they were entered. It’s likely if contacted that they will add a note to the CCJ to show it is no longer being collected as legally it is written off.

Thanks
Rachael

nick31 wrote: »

Hi - we were with CCCS / Stepchange throughout our DMP/IVA/Bankruptcy journey. IU had one particular debt that was referred to a solicitors after a debt company and while we were going through our bankruptcy proceedings they filled a CCJ in May 2016, our Bankruptcy order was issued in July 2016. I have never been contacted about the CCJ, but it has come up on my credit report when they did a search (which looked particularly bad as I thought it was discharged so didn't declare it). Can you advise - should this debt have been part of our bankruptcy, and therefore even if the CCJ alert is on my credit history it should show as resolved rather than an outstanding amount (about £200)? I have contacted the solicitors to check but am waiting for a callback from an advisor. I really need to know how to approach this so that I reflect it properly in any tenancy applications going forward. thanks

UnhappyBadger

Hi,
I'm considering bankruptcy but I work as a self employed contractor and work is intermittent at the moment.

I would probably have to go onto an IPA however what would happen if I had any time without any income? I usually have to put money away to pay the bills during these lean periods.

Would an IPA just stop and start when I receive income again? I assume the IPA would have to take into account any arrears for unpaid bills during this time?

Thanks

freccle

[FONT=&quot]If a home owner (owned outright) goes bankrupt and their only income is state retirement pension, can the home still be seized?[/FONT]

StepChange_Rachael

Hi

Thanks for your message.

I’d recommend speaking with the Business Debtline (BDL) to get confirmation on how bankruptcy would work under your circumstances. Where you have a form of self-employment, before going ahead with a debt solution, i'd recommend getting specialist debt advice. They’d be able give advice on what solutions would be more suitable and give you advice on how that may impact your employment or how the type of employment might impact the solution.

You don’t need to have business debts to get advice and support from BDL.

Thanks
Rachael

UnhappyBadger wrote: »

Hi,
I'm considering bankruptcy but I work as a self employed contractor and work is intermittent at the moment.

I would probably have to go onto an IPA however what would happen if I had any time without any income? I usually have to put money away to pay the bills during these lean periods.

Would an IPA just stop and start when I receive income again? I assume the IPA would have to take into account any arrears for unpaid bills during this time?

Thanks

StepChange_Rachael

Hi

Thanks for posting.

When a person applies for bankruptcy their full financial situation will be investigated, including all assets. High value assets will be at risk. If a house has equity worth over £1000 then it’s highly likely that the Official Receiver will look to release this in bankruptcy. This can be by forcing sale of the property. It's my understanding that there isn't a limit to age or type of income that would protect these assets in bankruptcy.

If a person has debts and owned a property with significant equity in it, I’d recommend considering alternative debt solutions. Some people choose to release equity through other means to deal with their unsecured debts such as equity release which can protect the property. I’d only recommend getting debt or financial advice from a free and impartial service.

Thanks
Rachael

freccle wrote: »

[FONT=&quot]If a home owner (owned outright) goes bankrupt and their only income is state retirement pension, can the home still be seized?[/FONT]

Aokane

Hello and good afternoon!

Last year in Sept I applied for a DRO, obviously now my moratorium period is over and recently my debters have been contacting me (mainly pay day loan ones) chasing their money back.

Just wanted some advice on what I should do....?

Should I ring them and tell them that I am still unable to pay these debts (£998)?

I've had an amazingly destressed year and now the anxiety of those debts has come back!

Any advice would be hugely appreciated!

Andrew.

StepChange_Rachael

Hi Andrew

Welcome to the forum. I’m sorry to hear you’ve had such a difficult year.

If the DRO had completed, then the creditors shouldn’t be contacting you, as legally the debts included in a DRO are written off after the twelve-month moratorium period. If this is the case, then I’d recommend witting to the creditors, making them aware that they shouldn’t be in contact with you as the debts were included and written off in a DRO. This should stop the communication and debt collection process.

There are a few reasons creditors might be able to still contact you, for example: If the DRO was cancelled during the moratorium period, due to changes in your circumstances that meant you’re now not meeting the criteria of the DRO. The debts would then not be written off and you’d be back to square one to find an alternative solution.

Another reason could be, if some debts weren’t included in the application. All debts should be included at the point of making an application. The money advisory service that helped you complete your DRO should have asked for a credit report, however, if debts were left off the application then these debts wouldn’t be included in the DRO and would still be able to collect for the debt after the moratorium period. Another reason for a debt not being written off in a DRO application is if it’s a type of debt that’s not included in an insolvency, such as debts classed as fraudulent, criminal fines or child maintenance arrears.

If you need any further help and advice, regarding any debts that are still outstanding then you can contact us at StepChange for further advice.

Thanks
Rachael

Aokane wrote: »

Hello and good afternoon!

Last year in Sept I applied for a DRO, obviously now my moratorium period is over and recently my debters have been contacting me (mainly pay day loan ones) chasing their money back.

Just wanted some advice on what I should do....?

Should I ring them and tell them that I am still unable to pay these debts (£998)?

I've had an amazingly destressed year and now the anxiety of those debts has come back!

Any advice would be hugely appreciated!

Andrew.

Trying2Rebuild

Hi, does anyone have any suggestions?
I’m in debt to the tune of £8000 to a property management company after my ex partner abused and tried to kill me and failed to pay any rent for an extended period of time. The flat was rented via a large property company. Following the abuse and assaults, I had a mental breakdown and had to be taken under the care of the Community Mental Health Team. During this period I was unable to work or cover the rent and I was unable to function at all. Unsurprisingly, I got told to leave that flat. I managed to get a restraining order and rent a new flat eventually. Very slowly I have started to make progress. I am having psychotherapy every week and under the care of a psychiatrist too. I am still not in a good place mentally but I am managing now to work part-time and will eventually be back to my normal full time working life.

Anyway, the property management co were informed about what was going on and in fact the police had to liaise with them previously to make sure my flat had secure locks etc due to my ex’s violence. But the property management co said all they care about is getting their rent paid, and they wouldn’t allow the police to beef up the locks or anything. They are now threatening to bankrupt me because I’ve failed to be able to clear this debt.

After my basic bills, food etc are paid I have just £20 a month left. It may sound to you like bankruptcy would be a good idea for me financially speaking — however I work in the legal field and being bankrupt would SERIOUSLY harm my chances of future work. Secondly, I rent in the private sector and will have to do so for the foreseeable future. All rental applications involve a credit check and here in London where I live and my support network is getting a flat is difficult in itself, landlords can pick and choose, they are simply not going to rent to someone with bankruptcy on their credit file. Council housing is extremely unlikely to be available for me as a single person with no children. So I really do need to avoid bankruptcy.

I contacted Stepchange who assessed that I can afford to pay the debt at £20 a month until my circumstances improve. I began paying that. The property management company hounded and threatened me, saying the £20 a month is not enough and that they’re going to bankrupt me unless I pay at least £200 a month. They are fully aware of my situation and I’ve provided bank statements, police documents proving the abuse, medical details proving I’m mentally unwell at present and income and expenditure forms. In the end I was so frightened that I decided to stop having psychotherapy which I was having to partially pay for myself due to government cuts, so that I could send more money to the property company. I am now paying them £100 a month in total.

However, the psychotherapy had been the only thing improving my health and was my lifeline. My mental health is plummeting now that I am no longer in therapy. The NHS are unable to provide ongoing therapy. They can provide medication and a check-in with a psychiatrist about once every 3 months but it’s not enough. My symptoms (diagnosed with an illness called Complex-PTSD plus Dissociative Identity Disorder) are spiralling out of control.

I contacted Stepchange again and also the Citizens Advice Bureau. They were appalled that I’ve stopped the psychotherapy and advised me to get back into therapy and reduce the payments to the property management company back down to something I can afford that will allow me to simultaneously continue with my therapy.

Is that a reasonable thing to do?
My anxiety is spiralling out of control. I am so terrified that I can no longer sleep or eat.
Stepchange even said it’s just not in the property co’s interests to bankrupt me because I don’t own anything or have any cash. They believe they’ll just accept the £20 in the end as it’s actually more than any insolvency judge would grant them.

StepChange_Rachael

Hi

Thanks for posting on the forum.

I’m so sorry to hear that you’ve been through such a difficult time. I’m glad to hear you’re getting back on your feet and have been able to start the process of moving on. Your health is certainly the most important thing to concentrate on and if psychotherapy is helping you to improve mentally then it’s certainly reasonable to continue.

A creditor should accept a payment based on your budget and affordability, a court will expect a creditor to come to an agreement before taking further action and shouldn’t threaten bankruptcy to try and make you pay more when clearly it’s unaffordable to do so. It’s much more likely a creditor would take a debt through a county court to get an affordable payment set up through a CCJ than go for bankruptcy. It seems odd that they have mentioned this route, especially under the circumstances.

If the company did go down this route you could appeal the process, I’d say you’d have good grounds to argue against the bankruptcy with the information you’ve provided in your post.

Hopefully they won’t go down the route of bankruptcy and will start accepting the payment, if you do receive paperwork indicating they are taking further action then I’d recommend getting back in contact with us at StepChange so we can advise you further.

Take care,
Rachael

Trying2Rebuild wrote: »

Hi, does anyone have any suggestions?
I’m in debt to the tune of £8000 to a property management company after my ex partner abused and tried to kill me and failed to pay any rent for an extended period of time. The flat was rented via a large property company. Following the abuse and assaults, I had a mental breakdown and had to be taken under the care of the Community Mental Health Team. During this period I was unable to work or cover the rent and I was unable to function at all. Unsurprisingly, I got told to leave that flat. I managed to get a restraining order and rent a new flat eventually. Very slowly I have started to make progress. I am having psychotherapy every week and under the care of a psychiatrist too. I am still not in a good place mentally but I am managing now to work part-time and will eventually be back to my normal full time working life.

Anyway, the property management co were informed about what was going on and in fact the police had to liaise with them previously to make sure my flat had secure locks etc due to my ex’s violence. But the property management co said all they care about is getting their rent paid, and they wouldn’t allow the police to beef up the locks or anything. They are now threatening to bankrupt me because I’ve failed to be able to clear this debt.

After my basic bills, food etc are paid I have just £20 a month left. It may sound to you like bankruptcy would be a good idea for me financially speaking — however I work in the legal field and being bankrupt would SERIOUSLY harm my chances of future work. Secondly, I rent in the private sector and will have to do so for the foreseeable future. All rental applications involve a credit check and here in London where I live and my support network is getting a flat is difficult in itself, landlords can pick and choose, they are simply not going to rent to someone with bankruptcy on their credit file. Council housing is extremely unlikely to be available for me as a single person with no children. So I really do need to avoid bankruptcy.

I contacted Stepchange who assessed that I can afford to pay the debt at £20 a month until my circumstances improve. I began paying that. The property management company hounded and threatened me, saying the £20 a month is not enough and that they’re going to bankrupt me unless I pay at least £200 a month. They are fully aware of my situation and I’ve provided bank statements, police documents proving the abuse, medical details proving I’m mentally unwell at present and income and expenditure forms. In the end I was so frightened that I decided to stop having psychotherapy which I was having to partially pay for myself due to government cuts, so that I could send more money to the property company. I am now paying them £100 a month in total.

However, the psychotherapy had been the only thing improving my health and was my lifeline. My mental health is plummeting now that I am no longer in therapy. The NHS are unable to provide ongoing therapy. They can provide medication and a check-in with a psychiatrist about once every 3 months but it’s not enough. My symptoms (diagnosed with an illness called Complex-PTSD plus Dissociative Identity Disorder) are spiralling out of control.

I contacted Stepchange again and also the Citizens Advice Bureau. They were appalled that I’ve stopped the psychotherapy and advised me to get back into therapy and reduce the payments to the property management company back down to something I can afford that will allow me to simultaneously continue with my therapy.

Is that a reasonable thing to do?
My anxiety is spiralling out of control. I am so terrified that I can no longer sleep or eat.
Stepchange even said it’s just not in the property co’s interests to bankrupt me because I don’t own anything or have any cash. They believe they’ll just accept the £20 in the end as it’s actually more than any insolvency judge would grant them.