Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_James

Xbox_Widow wrote: »

Hi, im looking for a little advice please. My beloved got himself in a bit of a financial mess prior to meeting me. He went bankrupt in March (he really had no choice, we were paying £650 a month purely in his debts!!!), to which we moved in with his mother to save some cash (the OR has given him 12 weeks to save some cash to be able to allow us to get a new place). The issue Im having is that I come off a mortgage which I took out with my x partner 4 years ago, and plan on buying again on my own on 1 of the rent to buy schemes. I have nothing in the same name as my other half, as it was my flat he moved into so everything has been in my name. The only thing he was on was the council tax. This is putting strain on us because I am fretting over this 12 week deadline, I have recently changed jobs so not had a wage in 6 weeks, the boyfs self emp on price work, and the weather hasnt done us any favours, and we havent got a stick of furniture for the new place at the minute, with 4 weeks to go, as well as worrying about my own future plans, such as getting another property? Is this Bankruptcy going to severely affect me?

Hello,

From what you've said it doesn't sound like your personal credit rating will be affected by your partner's bankruptcy. It's probably a good idea to avoid joint financial accounts in the future to avoid having a financial association marked on your credit rating (having council tax bills in joint names doesn't do this though).

Obviously your partner's own finances will be affected by his bankruptcy which could have a knock on effect on you. As you probably know, he can be asked to pay any spare income into an Income Payment Arrangement (IPA).

This would only come out of his income after he'd contributed towards the household costs. They can't ask for any of your money but it may work out that your partner doesn't have much spare cash for a little while.

It's hard to say how your partner's bankruptcy would affect you getting another property. If you were applying in just your name then it shouldn't really be an issue, in joint names then it might be. If you've recently changed jobs then that could also impact on your chances of getting a place (most places see a long time in your job as a sign of consistency).

If you were looking at renting privately then credit ratings aren't always taken into account. Most estate agents will run credit checks but many landlords who advertise themselves (in newsagents, on gumtree and those kind of places) will often use other methods to decide whether they'll let their property like asking for character references or copies of bank statements.

I hope this helps.

James

Xbox_Widow

StepChange_James wrote: »

Hello,

From what you've said it doesn't sound like your personal credit rating will be affected by your partner's bankruptcy. It's probably a good idea to avoid joint financial accounts in the future to avoid having a financial association marked on your credit rating (having council tax bills in joint names doesn't do this though).

Obviously your partner's own finances will be affected by his bankruptcy which could have a knock on effect on you. As you probably know, he can be asked to pay any spare income into an Income Payment Arrangement (IPA).

This would only come out of his income after he'd contributed towards the household costs. They can't ask for any of your money but it may work out that your partner doesn't have much spare cash for a little while.

It's hard to say how your partner's bankruptcy would affect you getting another property. If you were applying in just your name then it shouldn't really be an issue, in joint names then it might be. If you've recently changed jobs then that could also impact on your chances of getting a place (most places see a long time in your job as a sign of consistency).

If you were looking at renting privately then credit ratings aren't always taken into account. Most estate agents will run credit checks but many landlords who advertise themselves (in newsagents, on gumtree and those kind of places) will often use other methods to decide whether they'll let their property like asking for character references or copies of bank statements.

I hope this helps.

James

Thanks James!!! This has been loads of help Could you give me any advice on how to strenghten my own credit rating to put me in a better position please? I come off an old mortgage in the next few weeks touch wood! And Im going to look into the rent to buy 3 year schemes, I have already spoken to someone about it and i qualify, once Im mortgage free. I just know I need to be in a strong position with my boyfriend in tow

StepChange_James

Xbox_Widow wrote: »

Thanks James!!! This has been loads of help Could you give me any advice on how to strenghten my own credit rating to put me in a better position please? I come off an old mortgage in the next few weeks touch wood! And Im going to look into the rent to buy 3 year schemes, I have already spoken to someone about it and i qualify, once Im mortgage free. I just know I need to be in a strong position with my boyfriend in tow

Hello,

The best place for tips on improving your credit rating is this article on the main MSE site: http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve.

There aren't any quick ways to get a great credit rating (anywhere that tells you there is will probably be trying to make money off you). If you follow the tips in the above article you'll be doing all the things possible to improve your score.

Good luck.

James

jesshoff1

Thanks for the help.

emmarbos

What is the maximum an IPO is set to?

appletree5435

I opted for bankruptcy last year and should be discharged next month. Before going BR, I had 2 accounts with my bank, a current account, which was in the black by a small amount and a credit card, on which I owed £2k. Although OR asked the bank to close both accounts, bank kept the current account open. I also phoned up customer services to make it clear I was BR (& informed OR at the time) but I've continued to receive monthly statements, showing that I am in the black and still have an overdraft facility of £1300. I have not used the account at all since being made BR.
Bank recently sent me an annual statement from May 2012 - May 2013 which includes 3 months prior to bankruptcy, indicating an average overdraft of £25 & average credit of £15.20. I contacted the OR who didn't seem too bothered & asked if I wanted to keep the current account open (said I was unsure) & I've sent them a copy of the statement.
Took professional advice about this at the early stage of BR, and again lately but it's been contradictory. Earlier advice was that it was the bank's prerogative to open or close an account and as they had kept it open, it could be a good thing, as it could help to build up my credit rating after BR but lately was advised that it may just be a mistake on the part of the bank, in which case, it could rebound on me later if, e.g., it was a computer generated error on the date, and advised me to close it down. Help, please! Should I close this account?

System

emmarbos wrote: »

What is the maximum an IPO is set to?

Hi and thanks for your post.

I’m not sure if you mean maximum amount of money or length of time?

The quick answer is there is no maximum amount of money an IPO can be set for, this is based on the individual client’s budget and circumstances.

In regards to length of time that can be set for an IPO this again is based on the individual circumstances of the client. It’s usually three years but in cases where the Official Receiver deems necessary this can be set for longer or shorter.

I hope this helps.

Kind regards,

Mat

System

appletree5435 wrote: »

I opted for bankruptcy last year and should be discharged next month. Before going BR, I had 2 accounts with my bank, a current account, which was in the black by a small amount and a credit card, on which I owed £2k. Although OR asked the bank to close both accounts, bank kept the current account open. I also phoned up customer services to make it clear I was BR (& informed OR at the time) but I've continued to receive monthly statements, showing that I am in the black and still have an overdraft facility of £1300. I have not used the account at all since being made BR.
Bank recently sent me an annual statement from May 2012 - May 2013 which includes 3 months prior to bankruptcy, indicating an average overdraft of £25 & average credit of £15.20. I contacted the OR who didn't seem too bothered & asked if I wanted to keep the current account open (said I was unsure) & I've sent them a copy of the statement.
Took professional advice about this at the early stage of BR, and again lately but it's been contradictory. Earlier advice was that it was the bank's prerogative to open or close an account and as they had kept it open, it could be a good thing, as it could help to build up my credit rating after BR but lately was advised that it may just be a mistake on the part of the bank, in which case, it could rebound on me later if, e.g., it was a computer generated error on the date, and advised me to close it down. Help, please! Should I close this account?

Hi and thanks for your post.

I wouldn’t recommend using this bank account again, it could be a mistake on behalf of the bank and may cause further trouble down the line if they realise the mistake in the future.

I’d recommend that you use a new bank account without an overdraft facility attached.

I hope this helps.

Kind regards,

Mat

wharty

Hi can somebody advise please.

I have a vehicle on "conditional sale" I am not a third of the way through yet and i am going to apply for bankruptcy.

I am assuming this is classed as a "secured creditor" as the finance company own the vehicle until i make my final payment?

Also, i want the vehicle to be taken from me when i go bankrupt, is this possible?

Is it possible i could be forced to continue paying for the vehicle after i have filed for bankruptcy?

I have lost my job and have no income other than child benefit.

Thanks.

System

wharty wrote: »

Hi can somebody advise please.

I have a vehicle on "conditional sale" I am not a third of the way through yet and i am going to apply for bankruptcy.

I am assuming this is classed as a "secured creditor" as the finance company own the vehicle until i make my final payment?

Also, i want the vehicle to be taken from me when i go bankrupt, is this possible?

Is it possible i could be forced to continue paying for the vehicle after i have filed for bankruptcy?

I have lost my job and have no income other than child benefit.

Thanks.

Hi and thanks for your message.

I’d recommend that you hand the car back and include any debt due on the vehicle as part of your bankruptcy.

If the debt is included in your bankruptcy it cannot be enforced after you have petitioned.

It’s important to take free and impartial advice before going bankrupt. I’d recommend that you get in touch with us and we can help you through the process.

I hope this helps.

Kind regards,

Mat