Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Aidan

cbatflash said:

Hi,
Thanks for your time, if you can spare it to answer my question.
I'm in the process of trying to go Bankrupt, due to owing HMRC £150k+ - this debt was the result of the loan charge payment (tax avoidance) that has affected many contractors.
I'm fine not waiting for the results of the class action against HMRC and want to get this out of the way.

My question is, in the current Covid climate - what would the time difference be between paying the £680 and pushing the bankruptcy myself and waiting on HMRC to make me bankrupt? -  their last correspondence with me was sending me a (Statutory Demand - FEB 2020) saying they would make me bankrupt. I e-mailed them since asking why they are taking so long - Saying the below:
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Dear Mr ******

Thank you for your E mail, I have updated your record with the information provided. 

Due to the current COVID 19 situation, I would be unable to give you any dates as to when your case would be put through for Bankruptcy. 

Kind regards

Sent: 15 September 2020 13:40
To: Insolvency SD, DM (DM) <dm.insolvencysd@hmrc.gov.uk>

Subject: Bankruptcy - REF: 202071504 ONE

 

Good Afternoon,

 I hope you're well.

 I am e-mailing as advised to create a paper trail.

 Statutory Demand - REF: 202071504 ONE 

I am currently claiming Universal Credit, not working.

I have no Assets of worth.

I have no savings. 

I have no interest in waiting for the Loan case to resolve with the European Court of Justice. 

I would like my bankruptcy to be progressed as soon as possible, can you let me know how long this normally takes? 

Thanks for your time, stay safe. 

Kindest Regards 

*******

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Any advice would be appreciated, or if you can forward this to someone else who may know...

Thanks again. 

Regards

Liam

Hi Liam,

Thanks for your post.

In normal circumstances it could take HMRC some time to make you bankrupt and there’s likely to be additional delays due to the Coronavirus situation. Even if they’ve sent a statutory demand, they may not go ahead with a bankruptcy petition.

If you’d prefer to get this out of the way and apply yourself, it can be a relatively quick process. After submitting your online application, the adjudicator will usually have 28 days to make you bankrupt, but they aim to do this much sooner.   

Before applying for bankruptcy, I would recommend getting debt advice to review your options. If you'd like to contact StepChange our details are here.

I hope this helps.

Aidan

moom123

I applied for Bankruptcy  in sep2019 and i  am now discharged. I have been paying a IPA monthly each month and for the next 2 years of £170.  My question is on my credit score two bank accounts are still showing as open and missed payments each month?  I thought that bankruptcy would  of closed the accounts and not shown as missing payments each month ? Also what happens to the money im paying via my IPA?  Does this not go towards paying my debts aswell as this is not showing on any of my debts via clearscore? 

Any help appreciated.

StepChange_Aidan

moom123 said:

I applied for Bankruptcy  in sep2019 and i  am now discharged. I have been paying a IPA monthly each month and for the next 2 years of £170.  My question is on my credit score two bank accounts are still showing as open and missed payments each month?  I thought that bankruptcy would  of closed the accounts and not shown as missing payments each month ? Also what happens to the money im paying via my IPA?  Does this not go towards paying my debts aswell as this is not showing on any of my debts via clearscore? 

Any help appreciated.

Hi,

Thanks for posting and welcome to the forum.

Your credit file should show that all debts defaulted no later than the date you went bankrupt. If there are some accounts that are still showing as active you should complain to the bank(s) and get them to correct it.

The money paid into the IPA goes to the Official Receiver and is used to cover their costs, as well as making payments to your creditors. This won’t change the outstanding balance that shows on your credit report.

I hope this helps.

Aidan

rachelmoonburn

My partner was made bankrupt in summer 2018. BDO, who dealt with the case and were made trustees, pushed him to sell his flat in order to pay off the debts with his creditors (mainly council tax and other minor discrepancies). The flat was successfully sold in August last year. BDO gave any creditors a year to claim any debts after which my boyfriend  was paid the balance minus all fees and debts. 14 months later (this week) he received a demand from Avantis (on behalf of Thames Water) at his temporary address relating back to before he was made bankrupt and his previous address. I was led to believe (by BDO) that this window of a year was the only and final time for any creditors to raise a claim. Can you advise? 

StepChange_Aidan

Hi Rachel,

Thanks for your post.

When a property is sold as part of a bankruptcy, the proceeds will usually cover the trustee’s costs and the rest is then shared out among the creditors. It’s quite rare for the debts to be paid off in full and to have a remaining balance that is paid back. 

Was this debt originally included as part of the bankruptcy order? If it was, your partner can inform Advantis that the debt has already been written off and refer them to the trustee.

Unfortunately, I don’t have information about the timescales creditors would have to raise a claim if the debt wasn’t included. I’d recommend that your partner gets in touch with BDO directly for further guidance.

Kind regards,

Aidan

Db33

I am unable to meet the monthly payment towards DPP (DAS, Scotland) as a result of losing my 2nd income through Covid-19. I have had 3 different part time jobs this year to top up my income but lost each as a result of covid-19. I havent made any payments since March this year as a result.  I did recieve a proposal to revoke but this was refused in the circumstances.  My mother is my biggest creditor and she has agreed to accept a lower payment allowing me to meet the payment for the DPP each month.  This is as a result of her retiring and receiving a lump sum and monthly pension.  However, she will not recieve her first payment until end of January and as such i will not be able to make the monthly payment this month either.  Will my DPP be proposed for strike off again? I am at the end of my tether.

StepChange_Aidan

Db33 said:

I am unable to meet the monthly payment towards DPP (DAS, Scotland) as a result of losing my 2nd income through Covid-19. I have had 3 different part time jobs this year to top up my income but lost each as a result of covid-19. I havent made any payments since March this year as a result.  I did recieve a proposal to revoke but this was refused in the circumstances.  My mother is my biggest creditor and she has agreed to accept a lower payment allowing me to meet the payment for the DPP each month.  This is as a result of her retiring and receiving a lump sum and monthly pension.  However, she will not recieve her first payment until end of January and as such i will not be able to make the monthly payment this month either.  Will my DPP be proposed for strike off again? I am at the end of my tether.

Hi,

Thanks for your post. I’m sorry to hear about your situation.

You will need to contact your money advisor to let them know that you’ll be unable to make this month’s DPP payment. They will be able to review your situation and discuss your options. If your DPP is with StepChange, the contact details for our DAS team are on our website.

I can’t predict what your money advisor will propose, but the DAS administrator has announced that DPPs will not be revoked due to missed payments caused by Covid-19.

I hope this helps.

Aidan

chrischarn

An Insolvency practitioner took over my enforced bankruptcy in 2017, the previous Ip had started an IVA , and so I paid the new one 50k out of my total debt which was 57k just 7k short, it now transpires the IP had not continued the IVA misleading me , and creating over 200,000 in legal fees and costs , indirectly costing me £450,000 he also sold my home at undervalue a minimum of 30,000 , in order to be able to sell the next home , making commission on each asset sold. my business was from home so my income stopped too.  To my mind it falls under section 4 fraud act,
whilst yes he has a duty to creditors to get monies in , he could have done so easily with the IVA in year one rather than deliberately stretching it out costing me my entire pension, and every asset I own , destroying the lives of myself partner and child. 
What can I do to stop him taking my final property that we all now live in . and is it possible the police would investigate as possible fraud ? 

StepChange_Aidan

chrischarn said:

An Insolvency practitioner took over my enforced bankruptcy in 2017, the previous Ip had started an IVA , and so I paid the new one 50k out of my total debt which was 57k just 7k short, it now transpires the IP had not continued the IVA misleading me , and creating over 200,000 in legal fees and costs , indirectly costing me £450,000 he also sold my home at undervalue a minimum of 30,000 , in order to be able to sell the next home , making commission on each asset sold. my business was from home so my income stopped too.  To my mind it falls under section 4 fraud act,
whilst yes he has a duty to creditors to get monies in , he could have done so easily with the IVA in year one rather than deliberately stretching it out costing me my entire pension, and every asset I own , destroying the lives of myself partner and child. 
What can I do to stop him taking my final property that we all now live in . and is it possible the police would investigate as possible fraud ? 

Dear Chris,

Thank you for posting.

Did the original IVA fail? If it did, the agreement would be terminated, and your creditors or the IP can then apply to make you bankrupt. It’s not possible to be made bankrupt and still continue in an IVA.

Once you’ve been made bankrupt, ownership of your assets passes to the Official Receiver (OR), who will look at selling them to cover their costs and make a payment to the creditors. If there’s a significant amount of equity in your properties, they may pass your case onto another IP to oversee the sale. This IP will be able to take their own fees from the proceeds.

The IP could decide to sell your other property or put a charging order on it so that they get your share of the equity if it is sold at a later date. If you wanted to avoid a sale, the IP may allow a friend or relative to purchase your share. 

I can’t really say if the IPs have acted incorrectly without knowing more about your case, but if you feel that they mislead you I would start by making a formal complaint to them. If you’re not satisfied with their response, it can then be raised to the Insolvency Service for investigation.

I hope this helps.

Aidan

John_paul_chris

Hi, 
I am writing on behalf of my partner, she has credit card/overdraft debt of around 18000,and we live in Scotland. She has no way to repay this as her wage is too little. She has contacted national debtline over a year ago but because we are in Scotland, there was a few phone calls to and fro but nothing happened. Having received at letter telling her one of her creditors had a date for proceedings in the sherriff court, she contacted Citizens Advice Burae this october ( the court date was 21st Nov). they didn`t get back to her and no record of her on file. So the receptionist arrannged a face to face interview, the person went through the details of her situation and said we will put you in touch with our money adviser, this never happened and today received a letter saying she has been given Sherrff Court Decree. She sees no option and has accepted she will go bankrupt but apparently she needs approval from a money adviser to give along with her application to the Accountant in Bankruptcy, obviously she is frustrated by her attempts to do this and unfortunately the virus has made it more difficult to pursue. With having the decree could she apply directly to the AoB , without having a cerificate/ or proof she has taken debt advice/ thanks in advance