Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

coypondboy

Hi, is the Help to Buy Mortgage loan underwritten by the UK taxpayer written off when bankruptcy occurs ( assume property in negative equity and being repossessed)?

StepChange_Aidan

coypondboy said:

Hi, is the Help to Buy Mortgage loan underwritten by the UK taxpayer written off when bankruptcy occurs ( assume property in negative equity and being repossessed)?

Hi,

Thanks for your post.

A Help to Buy loan is secured against the property and would behave in the same way as the mortgage. If the property is in negative equity and gets repossessed by the lender, any remaining shortfall can be included in the bankruptcy and written off.

The way mortgages and secured loans are treated in bankruptcy can be quite complex depending on the situation, so I’d recommend that your friend gets specialist advice first. If they would like to speak with StepChange, our contact details are here.

I hope this helps.

Aidan

StuartSmith

Hi, desperately hoping for some help.
I filed for bankruptcy in 2009 and then in 2014 emigrated believing I owed HMRC £0 as that's what their statements said. A year after leaving the UK I received a bill for almost £2000 for the year in which I was made bankrupt. I've tried to call countless times but refuse to sit on hold for an hour from abroad on my mobile phone. They won't discuss it over email and claim they aren't receiving letters. I have no idea what this amount is for. Now I get very threatening letters with ever more interest added and I don't know where I stand on this. It's causing sleepless nights and I really need to resolve it. Thanks in advance.

StepChange_Patience

StuartSmith said:

Hi, desperately hoping for some help.
I filed for bankruptcy in 2009 and then in 2014 emigrated believing I owed HMRC £0 as that's what their statements said. A year after leaving the UK I received a bill for almost £2000 for the year in which I was made bankrupt. I've tried to call countless times but refuse to sit on hold for an hour from abroad on my mobile phone. They won't discuss it over email and claim they aren't receiving letters. I have no idea what this amount is for. Now I get very threatening letters with ever more interest added and I don't know where I stand on this. It's causing sleepless nights and I really need to resolve it. Thanks in advance.

Hi StuartSmith

I’m so sorry to hear that this is causing you sleepless nights, I understand how concerning it must be when you felt the issue was resolved through your bankruptcy. 

Once the bankruptcy order has been put through, any debts after this date wouldn’t be included. If this is the case with the HMRC debt then it may be the case that it wasn’t included for you. It may be worthwhile checking this with the Official Receiver who dealt with your bankruptcy If you’re unsure if this was the case.

I hope this helps a little. 

Patience

StepChange_Allen

StuartSmith said:

Hi, desperately hoping for some help.
I filed for bankruptcy in 2009 and then in 2014 emigrated believing I owed HMRC £0 as that's what their statements said. A year after leaving the UK I received a bill for almost £2000 for the year in which I was made bankrupt. I've tried to call countless times but refuse to sit on hold for an hour from abroad on my mobile phone. They won't discuss it over email and claim they aren't receiving letters. I have no idea what this amount is for. Now I get very threatening letters with ever more interest added and I don't know where I stand on this. It's causing sleepless nights and I really need to resolve it. Thanks in advance.

Hi Stuart

Just to give my two penneth on this to add to what Patience has said above. I think the first thing you need to establish is what the HMRC bill is for and what time period it covers.

There are a few possible scenarios. There's always a chance that the debt could be incorrect, in which case the bankruptcy date doesn't matter anyway. If the debt is one you do/did owe, the next consideration is whether the debt became due before you went bankrupt. If it did, it would be written off in the bankruptcy, if not, then it wouldn't be. Debts don't have to be listed at the time to be included in bankruptcy, they just to have been provable debts at the time.

I hope that's helpful.

Allen

hello19

Hi, I am applying for a DRO.  I have spoken to a step change advisor who went through all my application details with me. I have now received some documents that I need to fill in and either email or post to SC. Instead of printing the application, can I fill in the application via typing and sending it to SC with my additional documents or does it need to be printed a filled in with a pen?

StepChange_Allen

hello19 said:

Hi, I am applying for a DRO.  I have spoken to a step change advisor who went through all my application details with me. I have now received some documents that I need to fill in and either email or post to SC. Instead of printing the application, can I fill in the application via typing and sending it to SC with my additional documents or does it need to be printed a filled in with a pen?

Hello

Thanks for posting.

My understanding is that the application pack (not the whole personal action plan) would need to be printed as it has to be signed. You can then photograph or scan the documents if you wish to e-mail them back.

If you have any further questions about the DRO application process, the best thing to do would be to call the DRO team directly, as they know the whole process in more detail than I do.

Best wishes
Allen

StuartSmith

StepChange_Patience said:

StuartSmith said:

Hi, desperately hoping for some help.
I filed for bankruptcy in 2009 and then in 2014 emigrated believing I owed HMRC £0 as that's what their statements said. A year after leaving the UK I received a bill for almost £2000 for the year in which I was made bankrupt. I've tried to call countless times but refuse to sit on hold for an hour from abroad on my mobile phone. They won't discuss it over email and claim they aren't receiving letters. I have no idea what this amount is for. Now I get very threatening letters with ever more interest added and I don't know where I stand on this. It's causing sleepless nights and I really need to resolve it. Thanks in advance.

Hi StuartSmith

I’m so sorry to hear that this is causing you sleepless nights, I understand how concerning it must be when you felt the issue was resolved through your bankruptcy. 

Once the bankruptcy order has been put through, any debts after this date wouldn’t be included. If this is the case with the HMRC debt then it may be the case that it wasn’t included for you. It may be worthwhile checking this with the Official Receiver who dealt with your bankruptcy If you’re unsure if this was the case.

I hope this helps a little. 

Patience

Thanks for the replay Patience.
To clarify, I was officially made bankrupt non the 9th April 2009.
The period for which HMRC claim I owe them money is for April 3009 to April 2010.
Does that help you at all? 
Thank again.
Stuart

StepChange_Allen

StuartSmith said:

StepChange_Patience said:

StuartSmith said:

Hi, desperately hoping for some help.
I filed for bankruptcy in 2009 and then in 2014 emigrated believing I owed HMRC £0 as that's what their statements said. A year after leaving the UK I received a bill for almost £2000 for the year in which I was made bankrupt. I've tried to call countless times but refuse to sit on hold for an hour from abroad on my mobile phone. They won't discuss it over email and claim they aren't receiving letters. I have no idea what this amount is for. Now I get very threatening letters with ever more interest added and I don't know where I stand on this. It's causing sleepless nights and I really need to resolve it. Thanks in advance.

Hi StuartSmith

I’m so sorry to hear that this is causing you sleepless nights, I understand how concerning it must be when you felt the issue was resolved through your bankruptcy. 

Once the bankruptcy order has been put through, any debts after this date wouldn’t be included. If this is the case with the HMRC debt then it may be the case that it wasn’t included for you. It may be worthwhile checking this with the Official Receiver who dealt with your bankruptcy If you’re unsure if this was the case.

I hope this helps a little. 

Patience

Thanks for the replay Patience.
To clarify, I was officially made bankrupt non the 9th April 2009.
The period for which HMRC claim I owe them money is for April 3009 to April 2010.
Does that help you at all? 
Thank again.
Stuart

Hi Stuart

Thanks for confirming this. So, as I mentioned above, only debts that were provable on your bankruptcy date would be included in your bankruptcy. So if the amount that HMRC is claiming is for the following tax year, I'm afraid that this wouldn't be included in your bankruptcy.

So it then comes down to whether you owe the money or not on any other grounds. I'd suggest e-mailing/writing to HMRC if you can't call them, asking for a breakdown of what the balance is for, in order to see whether you agree the money is owed or not.

I hope this helps.

Allen

Limalex

Hello there,
I am writing you regarding my Dad's case.
I recently find out that he has about 5 different accounts in debt some of them already passed to debt collectors. He basically hiding the letters and do not wish to deal with them. Since he is furloughed and been told when furlough ends he will be dismissed I believe he developed a slight mental illness, or depression. He is 65 very unlikely has another job before retirement due to some other health issues. So the bankruptcy option is on the table.

My question is If we arrange an LPA. Can I deal with the creditors on his behalf? Or even can I deal with the bankruptcy process on his behalf?