Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

dawd999

Also later on in life if i wanted to get a mortgage would i be able to once it has been 6 years and the BR falls off my credit file.

JCS1

StepChange_Aidan said:

dawd999 said:

Hello
I am after some advice. I am currently in around 41k debt i have no assets or savings. Its all credit cards and personal loans. Due to the current covid crisis iv been unable to work or take on a new job. My mother was diagnosed with cancer at a late stage so i had to give my time to care for her. I have 3 children and even thinking of the debt is making me sick. I have made my mind up to file dor bankruptcy my question is in august this year i had to make a few emergency cash withdrawals from 2 credit cards as i had to replace my kids beds due to bed bugs infestation also paid up rent aswell i am now worried this will go against me?

Hi,

Thanks for posting and welcome to the forum. I’m sorry to hear that you’re going through a difficult time and I hope that going bankrupt will give you a fresh start.

You can still apply for bankruptcy if you’ve used credit recently. 

In some cases the Official Receiver (OR) or trustee can extend the length of time that the bankruptcy restrictions apply if they believe that you acted recklessly by borrowing money that you knew that you were unable to repay. This is decided on a case-by-case basis but is less likely if the credit cards were used in an emergency or to pay for essential items.

Kind regards,

Aidan

The recent credit also has to be material to the total debt, so unless there are other factors it would be unlikely

StepChange_Aidan

dawd999 said:

Thankyou for replying Aidan. All of my debt is actually old and as for the cash withdrawals its was only a few 100 that i withdrew. What is the process for bankruptcy if i was to go through stepchange??

As Sourcrates has said, you would complete an online application yourself rather than through StepChange, but if you would like any advice about bankruptcy or other debt solutions before going ahead please get in touch with us.

StepChange_Aidan

dawd999 said:

Also later on in life if i wanted to get a mortgage would i be able to once it has been 6 years and the BR falls off my credit file.

You can apply for a mortgage after being discharged from bankruptcy, but it will be difficult to find a lender while the bankruptcy is showing on your credit file. 

After six years it should become much easier to get a mortgage. However, lenders will often ask if you have ever been bankrupt when you apply, so it could still have some impact even after it has dropped off the credit file.

dawd999

Thankyou very much..

passatrider

I’m currently on a DMP with StepChange after being refused a DRO in January because they said my disposable income was more than £50 per month. However, my sole income is from benefits only and read that you would automatically qualify for a DRO if your only source of income is benefits? I’m confused 😐 

StepChange_Aidan

passatrider said:

I’m currently on a DMP with StepChange after being refused a DRO in January because they said my disposable income was more than £50 per month. However, my sole income is from benefits only and read that you would automatically qualify for a DRO if your only source of income is benefits? I’m confused 😐 

Hi,

Thanks for posting.

You can only apply for a DRO if you have less than £50 left over in your monthly budget after you’ve covered your household bills and essential living costs. This limit will still apply when your sole income is from benefits. 

If you’re not sure about your budget or the recommended solutions, please get in touch with us so we can review your options.

I hope this helps.

Aidan

sourcrates

Question to stepchange representitive from myself.

Re : individuals applying for a DRO (Debt releif order).

It appears just lately, DRO applicants who receive PIP, and who list PIP as income, but also a corresponding amount as "adult care costs" in their expences, are being refused DRO`s as they are failing to meet the £50 mimimum disposable income allowence.

Stepchange are telling them that they cannot list adult care costs against PIP, and are demanding to know what the money is spent on, which according to DRO guidence, is incorrect.

Can you provide any explanation or clarification on this at all, according to Debt Camel, an individual is entitled to list adult care costs against an income comprising of PIP,  it appears stepchange advisors disagree on this point, which quite concerns me.

One more recent issue that has been highlighted on these forums, DRO applicant who has use of a car, pays tax and insurance on it, is the registered keeper, but is not the owner.

Guidence says this is acceptable for DRO purposes as they do not own the car,  Debt camel concur, stepchange say its not acceptable, who is right ?

Your comments would be most welcomed.

Thanks.

apz7

Hi, I'm new to the forums but after reading a few similar situations I thought it'd be best to post my own and potentially receive some advice.

Story is as usual, business was going well however after a certain amount of time it went downhill. Loan payments became harder and harder and here we are today. So i'll layout the amount of secured loans against the house.

House worth - around 350k-450k (needs valued)
Mortgage - 160k
Loan 1 - 250k
Loan 2 - 70k

Total Secured (charges against house) = 480k
Lets say house worth is 400k, that would leave us in 80k negative equity.

(There are also unsecured loans and CC loans of high amounts too)

Now this is my parents house, and their business. We are suffering as a family and bankruptcy seems a viable option in our situation. We have went the route of an IVA however the payments of the secured loans haven't been kept up, which means we are getting letters, bailiffs etc. sent to the house with action to take it further.

My parents are currently worried and after doing some research I have found that if a house is in negative equity, the official receiver will wait 2 years and 3 months to assess the situation again. In this time you are free to stay in your home. My question is, when the official receiver comes back to review if the house is still in negative equity, will he prevent the house from being sold?
another question is, how would the negative equity turn into positive equity, if we can't keep up payments? (apart from the value of the house going up)

So in conclusion I suppose the question I am asking is are we able to keep the house if we go bankrupt? (mortgage payments are interest only and we will ALWAYS keep paying the mortgage ofcourse)

Just to add to the question, my father also has a property worth 100k which one of the loans have a charge on. Would this be taken away from the total equity in the house? For example
House worth : 400k
Property 1 worth : 100k  (total 500k)

Total Secured loans - 480k
Total equity left - 20k

- is this how it would work?
so in this instance the house would be sold since there is equity left?

Sorry if this comes out a bit unclear, im just looking for some guidance in this situation and there's too many questions to ask. Bankruptcy is a scary thing for my parents as the house is in risk.
I hope someone can help, time is getting tighter.

Thankyou. 

Frank38

Hello  I hope this is in the correct Forum, apologies if not.  I'm trying to discover what happened to Mortgage Trust because I've discovered that they put a note on our Experian Credit Score and it is still there.  We are discharged from the bankruptcy and the  bankruptcy period is ended.  We want the note removed because the money we owed them has now been sorted.  However it nowadays seems to be for Brokers Only.  I was wondering if you might know the present location or form of their original  Buy-to-Let Lending department ?  Thank you for your help, I'm sorry if this is the wrong Forum.  Thank you. Regards Frank Mann