Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

TCalver

Hi there I hope someone can help with my query. 
My ex-husband is being investigated for fraud and is likely to go to prison soon. He has numerous credit card debts and a loan and does not work so cannot repay these debts.  His only 'asset' is a 25% share in my mothers house which is held in trust with my daughters and can only be realised on her death.  My question is, if he is declared bankrupt or applies for bankruptcy himself, can the OR force the sale of my mothers house in order to get his share of it to pay off his debts?  My mothers is 79, suffers with epilepsy and has lived in the house for over 20 years.
I would be grateful for some advice.

StepChange_Rachael

TCalver said:

Hi there I hope someone can help with my query. 
My ex-husband is being investigated for fraud and is likely to go to prison soon. He has numerous credit card debts and a loan and does not work so cannot repay these debts.  His only 'asset' is a 25% share in my mothers house which is held in trust with my daughters and can only be realised on her death.  My question is, if he is declared bankrupt or applies for bankruptcy himself, can the OR force the sale of my mothers house in order to get his share of it to pay off his debts?  My mothers is 79, suffers with epilepsy and has lived in the house for over 20 years.
I would be grateful for some advice.

Hi

Thanks for posting.

Due to the complexity of the situation I wouldn’t be able to give you an accurate answer. You’d need to seek legal advice regarding this. In bankruptcy it’s up to the Official Receiver (OR), the OR will look into assets and can release assets into the bankruptcy. However, as the asset is in a trust along with other named people and can only be released under certain circumstances, it wouldn’t be clear cut. I’d recommend legal advice before applying for insolvency.  Legal advice can be costly but you or your partner might be eligible for Legal Aid.

Thanks
Rachael

flippity_flop

I have very recently gone bankrupt and have done the income and expenditure. My partner lost his job the day of putting this in. The person dealing with my bankruptcy said that she will put down what my partner was earning as it was minimum wage and means I still won't pay anything if he get a new job for  the same pay. However, it looks as though he may have found a job earning more than minimum wage and of course is very reluctant to tell me how much he will be earning as he doesn't want all his money being taken away because of my debts, which is understandable as he has lived with me for less than a year. Do we have to disclose this information? 

fatbelly

flippity_flop said:

I have very recently gone bankrupt and have done the income and expenditure. My partner lost his job the day of putting this in. The person dealing with my bankruptcy said that she will put down what my partner was earning as it was minimum wage and means I still won't pay anything if he get a new job for  the same pay. However, it looks as though he may have found a job earning more than minimum wage and of course is very reluctant to tell me how much he will be earning as he doesn't want all his money being taken away because of my debts, which is understandable as he has lived with me for less than a year. Do we have to disclose this information? 

He can't be forced to disclose his earnings but if he does not, the OR will assume a 50/50 split of household expenses.

This might work for you if he now earns more than you.

Whatever happens he will not be asked to pay anything to your debts. 

StepChange_Ciaran

flippity_flop said:

I have very recently gone bankrupt and have done the income and expenditure. My partner lost his job the day of putting this in. The person dealing with my bankruptcy said that she will put down what my partner was earning as it was minimum wage and means I still won't pay anything if he get a new job for  the same pay. However, it looks as though he may have found a job earning more than minimum wage and of course is very reluctant to tell me how much he will be earning as he doesn't want all his money being taken away because of my debts, which is understandable as he has lived with me for less than a year. Do we have to disclose this information? 

Hi 

Thanks for posting

There are a few points that I would like to address answer.  

It sounds like your referring to an Income Payment Arrangement (IPA) calculation.  The OR will review the joint budget to ensure that both parties are contributing a fair proportion towards the household expenditure.  This will be calculated using actual earnings figures.  They will want to see that both parties are paying their way. The expectation would be that if one of you earns more than the other, they should contribute more to the household.

The client must disclose any of these received during the IPA period and attempting to hide any payments could result in further restrictions being applied in the future.

Dependent on when this calculation was made, this agreement must be signed by both yourself and the OR.  You will usually have 14 days after signing to change your mind or make changes.  It is important that you comply and update them of any changes to income or there is a risk that they could apply for income payment order (IPO) which are taken directly from earnings by an attachment of earnings.

The maximum term for any payments is 36 months.

I can confirm that at no point with your partner be expected to contribute towards your actual debts.

Thanks

Ciaran

chrischarn

was made bankrupt in oct 2016 by inland revenue loans etc totalled 57k total costs im now facing are over 200k so im losing my two houses and its having life changing consequences. Im told these are legal costs etc but im just a sole trader selling small campervans , or at least i was. Is it normal for these costs to be charged at this rate and do you know of any other forums where i can share my experiences with others

StepChange_Aidan

chrischarn said:

was made bankrupt in oct 2016 by inland revenue loans etc totalled 57k total costs im now facing are over 200k so im losing my two houses and its having life changing consequences. Im told these are legal costs etc but im just a sole trader selling small campervans , or at least i was. Is it normal for these costs to be charged at this rate and do you know of any other forums where i can share my experiences with others

Hi Chris,

Thanks for your post.

It’s difficult to say what the normal cost for a bankruptcy would be, as each case is different. 

The Official Receiver (or Trustee if you are based in Scotland) may sell your property or any other assets. They could also decide that you need to make a monthly payment towards the bankruptcy (an Income Payment Arrangement).

The money raised covers the Insolvency Service’s administration fees and the cost of selling the assets. Any funds left over would be used to make a payment to your creditors.

If you’re unsure about the costs I’d recommend contacting the Official Receiver (or Trustee) for further information.

There’s no specific bankruptcy forums (other than this one) that I can recommend, but if you do a web search on bankruptcy there’s a number of different websites and message boards that could provide additional help. We also have some more information about bankruptcy on the StepChange website.

I hope this helps.

Aidan

nikkinoo75

Hi, Looking for some advice.  I am being made redundant and a friend has offered to do a full and final settlement on my IVA for me.  I have paid in exactly half (9k) so another 9k currently outstanding.  My IVA lady said I do not have to offer the full remaining amount of the IVA.  How do I know what is an appropriate amount to offer and how likely is this to be accepted?  My mental health has taken a real battering and the last time I was like this it resulted in an payment break (I should really have gone bankrupt then as I did not work for over a year) my friend does not want to see me in this mental state again.  Any advice welcome thank you.

StepChange_Aidan

nikkinoo75 said:

Hi, Looking for some advice.  I am being made redundant and a friend has offered to do a full and final settlement on my IVA for me.  I have paid in exactly half (9k) so another 9k currently outstanding.  My IVA lady said I do not have to offer the full remaining amount of the IVA.  How do I know what is an appropriate amount to offer and how likely is this to be accepted?  My mental health has taken a real battering and the last time I was like this it resulted in an payment break (I should really have gone bankrupt then as I did not work for over a year) my friend does not want to see me in this mental state again.  Any advice welcome thank you.

Hi Nikki,

Thanks for posting. I’m sorry to hear about how you’re feeling, and I hope this helps.

We wouldn’t be able to say how much you should offer to settle your IVA early, as this will depend on your individual circumstances and which creditors are included. 

Generally speaking, your offer would need to be around the amount you have left to pay over the rest of the IVA. However, if your situation has changed and it looks as through you may struggle to afford the regular payments going forward, your creditors may accept a lower amount to avoid the IVA failing. 

I’d recommend that you find out how much your friend has available and then discuss your options with your Insolvency Practitioner. If they feel that an offer has a good chance of being accepted, they will put the proposal to your creditors. 

As with the original IVA proposal, 75% or your creditors (by value) would have to agree for the settlement offer for it to be accepted.

Thanks

Aidan

Chocgirl61

Hello
I'm about to go bankrupt - I've used all this months salary (I only work 2 days a week & clear £720 pm) to pay the fees, I'm just waiting until Monday morning to press the button so I'm not stressed & anxious all over the weekend.
I'm a single parent, had a breakdown last summer so had to stop working full time which is when I started to fall behind with all the credit card payments. I've overcompensated my children for them not having another parent & it's got me into this fix...
Since the DWP in their wisdom assessed me as not being capable for extra work, this month to my huge surprise, I have been awarded an extra £336 pm in my UC.  Shame I wasn't getting this much before or I might not be in this predicament...
Anyway, along with UC paying all my rent I actually (now!) have £1000+ in benefits as well as my £720 salary pm.
My query is will the OR be likely to make me pay an IPA?
Finally, the part on the incoming & outgoing section of the form - I don't smoke, drink or have a car so obviously, those are not outgoings for me.  But why am I not able to add the first two anyway as expenditure?  Are people who don't smoke or drink at a disadvantage because they don't spend money on those things?
Thanks