Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Aidan

Sspence said:

Hi
I was made bankrupt in 2015. I paid my amount every month for 36 months and was discharged. 
I recently recieved a letter from the insolvency service saying they had money to return to me.
I rang the insolvency service using the number from the gov.uk website not the number on the letter incase it was fraudulent.
It was not, the insolvency service have £2500 to return to me that has gone unclaimed by my creditors! I've never heard of this and quite frankly cannot believe the companies did not lay claim to the money I owed them.
Is this a common thing? I cant find anyone online saying this has happened to them.
Thanks in advance 

Hi,

Thanks for posting. I’m sorry for the delay in getting back to you, we’ve been unable to respond to posts on the forum due to the Coronavirus situation.

This does appear to be unusual. Funds taken from an Income Payment Arrangement usually cover the administration costs of the bankruptcy and to make a payment to your creditors. I certainly haven’t come across a situation where money was left unclaimed before.

Like you, I would have been suspicious about the letter, but I’m glad to hear that you’ve contacted the Insolvency Service directly to confirm that it’s correct.

Thanks,

Aidan

StepChange_Aidan

woodyswanton said:

Hi
I have recently been onto step change and they have advised I look into bankruptcy as opposed to a debt relief order.
I am a little confused as my debts are just below the £20k threshold and I am left with only £20 disposable income, clearly I want to avoid paying the £900 bankruptcy fee as I just don't have it.
Thanks in advance

Hi Woody,

Thanks for posting and welcome to the forum.

To be eligible to apply for a DRO, your total debts have to be less than £20,000 and you need to have less than £50 left over each month after you’ve covered your priority bills and living costs. Your vehicle can’t be worth more than £1,000 and other assets have to be less than £1,000.

Without being able to see your budget, I wouldn’t be able to say why a Debt Relief Order (DRO) was not recommended to you. If you’re not sure about the advice, please get back in touch with us to discuss your options. Our contact details can be found on our website.

If you don’t qualify for a DRO and would like to apply for bankruptcy, the application fee is £680. 

I hope this helps.

Aidan

StepChange_Aidan

Soosuki1 said:

Hi. I just wonder if there's anyone out there that can give me some advice. I am a nurse and work via an agency through my ltd. co. I am unable to work at present as I am not well. I am concerned as I am unsure when I will be able to work again. I have a mortgage and no savings and may have to declare bankruptcy. Can anyone shed any light on this or point me in the right direction. I really would appreciate any help/guidance at all. Many thanks, Soosuki1

Hi,

Thanks for your post and welcome to the forum. I’m sorry for the delay, we’ve been unable to post on the forum for a while due to the Coronavirus outbreak.

Going bankrupt could have an impact on your job as you will not be able to run a limited company without the court’s permission. 

As Fatbelly has said, there’s also a risk of losing the mortgaged property if you go bankrupt. 

There may be other debt solutions available that are more suitable for your situation. Before you make a decision, I’d recommend getting specialist advice from Business Debtline. Their contact details can be found here.

I hope this helps.

Aidan

StepChange_Aidan

NWatson2711 said:

Hi 

I hope someone can help us, it looks like we will both ( my husband and I ) apply for BR as he’s business has just collapsed and we don’t have anywhere near enough to pay our own individual debts. 

My main worry is our car I own it and it is a 7 seater as we have 4 boys and I need the car to take them to 3 different schools each day and to get to the new job I have just started part time. It’s worth about 4K in this current climate and I’m so worried if we are made to sell it and buy one for 1000 that we won’t be able to fit everyone in and it will constantly break down causing more money to fix and they won’t be able to get to school 

Hi,

Thank you for your post.

The Official Receiver (OR) may allow you to keep a car if it’s essential and of low value. This is decided on a case-by-case basis, but they agree that you need a vehicle it’s likely you’d be instructed to sell your car and buy a cheaper replacement up to the value of £1,000.

If your business is in the process of being wound up, I’d recommend getting specialist help from Business Debtline, who will be able to advise on your options for both business and personal debts. Their contact details can be found here.

Thanks,

Aidan

StepChange_Aidan

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:) 

Hi Paul,

Thanks for posting and welcome to the forum.

The council would be able to offset the refund against the council tax arrears, even if the debt was written off in the bankruptcy.

If there were any funds left over relating to the period before the bankruptcy order, this would count as an asset that can be claimed by the Official Receiver. You’d only be entitled to receive a refund for the years after the bankruptcy.

I hope this helps.

Aidan

StepChange_Aidan

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

Hi Helen,

Thank you for posting.

If you and your siblings jointly own your parents’ home, the Official Receiver (OR) would treat your interest in the property as an asset to be included in the bankruptcy. 

Depending on how much equity is available, the OR could look to sell the house to release your share. If you wanted to avoid this, the OR may allow a family member or third party to purchase your interest in the property. Alternatively, the OR could put a charging order on the house so that the equity is paid to them at a later date.

If your name is removed from the property deeds, the OR may view this as attempt to hide an asset, which is an offence. This could lead to a Bankruptcy Restriction Order (which can extend the bankruptcy restrictions for up to 15 years) and in some cases a fine or imprisonment. 

I’d recommend reviewing your options with a debt advisor before considering bankruptcy. As you’re self-employed, I’d suggest Business Debtline for specialist help. Their contact details can be found here.

I hope this helps.

Aidan

doorstep54

Hi step change  just wanted to ask question please nearly 3 years ago I was made bankrupt I've been discharged from bankruptcy for over 2 years now just few months ago I was contacted by inheritance company saying my mother had passed away some time last year and she didn't make a will and her estate is unclaimed I know it not for a lot of money am I entitled to claim any think or not as not sure where I stand on this, thanks for any help with this

StepChange_Aidan

doorstep54 said:

Hi step change  just wanted to ask question please nearly 3 years ago I was made bankrupt I've been discharged from bankruptcy for over 2 years now just few months ago I was contacted by inheritance company saying my mother had passed away some time last year and she didn't make a will and her estate is unclaimed I know it not for a lot of money am I entitled to claim any think or not as not sure where I stand on this, thanks for any help with this

Hi,

Thanks for posting. 

 

If your mother passed away after you were discharged from bankruptcy, then you are entitled to keep any money received from an inheritance.

The official receiver would only be able to claim money or assets that you inherit if the date of death occurred before you were discharged.

You’ve said that you were contacted by an inheritance company. If they are ‘heir hunters’, they will usually take a percentage of the inheritance to cover their fees, but you may be able to make a claim to your mother’s estate yourself. 

Before you make a claim, I would recommend getting some specialist advice on dealing with your mother’s estate. There’s a guide to this on the Money Advice Service website.

I hope this helps.

Aidan

simmies12

Hi I wonder if there is anyone who can help. I have been separated for 2 years and my ex has run away and not living in the home. I am also not in the home. House is about to get repossessed and I can’t sell it as he is uncontactable and is going to result in a CCJ. I have spent the last 2 years trying to sort this all out but there has been nothing out there that can help me. It’s like the financial damage is being done to me and I have no control. If anyone can help or point me in the right direction I would be so grateful.

Hammers01

Hello,
Would some be able to tell me if a pre-paid card like cash plus shows up on your file when you apply for bankruptcy please as I want to be able to use a  prepaid debit cash card like cash plus or pocket, or will this kind of card flag up and be shut down