Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

paul4874

Hi 
I declared myself bankrupt in sept 2017, council tax arrears of £2200 pounds was written off, amongst other debts too, have recently appealed my council banding and was successful reducing from Band D to a C, advised by appeal that council would backdate any refunds due on the difference back to 2005 when moved in. Had confirmation now all sorted, and advised that because of bankruptcy they have only refunded the years after the bankruptcy of £429 2 yrs difference at around £200 ish each year, and not previous to this period due to the bankruptcy amount, I’m assuming they are allowed to do that although not sure, thought I’d check first? Hope you can help shed Some light:) 

fatbelly

paul4874 said:

Hi 
I declared myself bankrupt in sept 2017, council tax arrears of £2200 pounds was written off, amongst other debts too, have recently appealed my council banding and was successful reducing from Band D to a C, advised by appeal that council would backdate any refunds due on the difference back to 2005 when moved in. Had confirmation now all sorted, and advised that because of bankruptcy they have only refunded the years after the bankruptcy of £429 2 yrs difference at around £200 ish each year, and not previous to this period due to the bankruptcy amount, I’m assuming they are allowed to do that although not sure, thought I’d check first? Hope you can help shed Some light:) 

I think technically they are not correct. However, the Official Receiver would have a claim on sums relating to the period before sept 2017. - so you would  be unlikely to see any of the refund.

mdaslambd

This forum site is very good, very good advice is given
It was very good.
Hopefully, I’ll get better suggestions like this in the future.

My life is very amatic.dr

Helen0469

Hi
I want to explore the possibility of becoming bankrupt, I have debts of £27k that I was struggling to pay and I'm self-employed - with the current virus situation, I haven't earned money for weeks and it will take time to build up my business again. 

The worry is that my parents put their house into my and my siblings names years ago on the advice of their accountant. They still live in the house and I want to know whether it would be sold to pay my debts if I did choose bankruptcy. Obviously I can't let that happen. I'm assuming that it would appear 'dodgy' if my name was now removed from the property deeds? 

Thank you

fatbelly

Helen0469 said:

Hi
I want to explore the possibility of becoming bankrupt, I have debts of £27k that I was struggling to pay and I'm self-employed - with the current virus situation, I haven't earned money for weeks and it will take time to build up my business again. 

The worry is that my parents put their house into my and my siblings names years ago on the advice of their accountant. They still live in the house and I want to know whether it would be sold to pay my debts if I did choose bankruptcy. Obviously I can't let that happen. I'm assuming that it would appear 'dodgy' if my name was now removed from the property deeds? 

Thank you

Yes - I'll jump in here and say that you should not risk bankruptcy. The house would be deemed an asset in which you have a beneficial interest. 
It's a bit outside my field but that advice may well have been deficient. (google “gift with reservation of benefit.” )
Have you explored the government help for self-employed?

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

dmcw

I would contact the insolvency enquiry line. Phones are down at the moment but you could email. They are very helpful explaining what could happen. 
https://www.gov.uk/

Helen0469

Thank you for your comments that's helpful - I'm waiting to be contacted about the grant but that will cover living expenses, it's not going to be anywhere near enough to pay debt off, sadly. 

StepChange_Aidan

Blackswan2020 said:

Hi i have been reading lots of information on here which has some fantastic advice and would like some help please before i proceed with scary thought of Bankruptcy which Stepchange have recomended

after a long marriage we have decided to call it a day and seperate all the debts are in my name and my husband soon to be ex is staying in the property until he can afford to move out. This gives me an income of about £1000 a month and he is offering me £400 a month rent which we worked out to be half of the rent utilities and council tax he will not disclose his income as the debt is mine. Are there any problems with this arrangement as i want to get everything correct one step at a time as this process is scaring me and making me ill i don't know how to cope with the thought of my interview with the OR but need to see this through

Thank you and sorry for long post

Hi,

Thanks for posting and welcome to the forum.

I’m sorry for the delay in getting back to you, due to the Coronavirus outbreak we’ve been unable to reply to posts on the forum.

As part of the bankruptcy application, you’ll be asked to provide details about your partner’s income. This is so they can calculate your fair share of the household expenses if they decide to set up an Income Payment Arrangement. If the partner is unwilling to disclose their income, the Insolvency Service (IS) will assume that household spending is split 50:50.

However, if you are no longer together, you could argue that your ex is a lodger so you’re not required to declare their income. You’d need to include his rent payment as an income to you on your application. 

I can’t say which approach the IS would take. I’d recommend getting in touch with them directly for further guidance. Their contact details can be found on the Insolvency Service website.

I hope this helps.

Aidan

StepChange_Aidan

BedNBreakfast said:

StepChange_Aidan said:

BedNBreakfast said:

Can someone tell me what would happen with a Salary Sacrifice car lease when being sequestered ? 
3 year lease , car gets handed back after the 3 year , and never belongs to me.
Car is roughly £350 a month (which comes off my salary at source) but all maintenence , tyres , insurance and tax is included.
Would i lose this or could i fight it as my daughter has a disability so a car is important.

Thanks

Hi,

Thanks for your post.

Before you consider sequestration, I’d recommend checking the lease agreement. Some have a bankruptcy clause which allows the leasing company to end the agreement if you’re declared bankrupt. 

If you need to keep the car, you could ask your trustee to allow you to continue making the payments from salary sacrifice. They may agree if the car is an essential item, but this is something which they would decide on a case by case basis.

I hope this helps.

Aidan

Thanks for your reply Aidan , 

I checked the small print and could see nothing about bankruptcy , this may be because its an employer salary sacrifice lease , and not an actual private lease.

However can you give me some more advice please.
Currently sitting with about 25k of unsecured defaulted debt , car repossession , catalogues , store cards etc , and not much money to pay them off. I was thinking of Sequestration (As i am in Scotland) as i want the debt gone in the quickest possible way.
In terms of these debt management plans how is the amount calculated ? do you pay the entire lot back or is some written off ?
If i was to pay the 25k back it would probably take about 20+ years , hence why i though bankruptcy was the best route or option for me .

Stepchange recommended paying my creditors £1 a month. but the debt would be hanging over me forever.

Hi,

Sorry for the delay.

In a Debt Management Plan (DMP), you would make reduced payments to your debts. Each creditor receives a pro-rata share of the amount remaining in your monthly budget after you have covered your priority expenses and living costs. 

The debts do not get written off, so a DMP can last as long as it takes to repay them in full.

If we’ve recommended offering a token payment of £1 to each creditor, this would be as a temporary measure until your situation improves and we can look at more long-term debt solutions.

If you’ve already had advice from StepChange but are not sure how to proceed, please get back in touch with us. Our contact details can be found on our website.

Thanks,

Aidan

StepChange_Aidan

ukman2012 said:

I had a CCJ registered against me in august 2014.  I then took a DRO in 2015 june, which has all my debts listed including the CCJ.  After the year of the DRO memorandum, everything was marked at 0 balance apart from the CCJ which remains on file and active.  Should it not have been removed and just the DRO showing. 
In a few months time it will be 6 years will it just come off?

Hi,

Apologies for the delay in getting back to you.

As Fatbelly has said, the County Court Judgement should drop off your credit file in August.

CCJ’s will show on the credit file for six years from the date of the judgement, even if the debt was included in the DRO. 

Thanks,

Aidan