Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

RAS

Before you apply for ANY debt remedy which means you stop paying creditors, you need to set up a new basic bank account with one to whom you owe nothing. 

And then get your salary and any benefits paid into the new account, before you press any buttons to start the process. Plus move any essential DDs across. This needs to be done as a new account not as a switch, otherwise existing creditors can still claim DDs that you need to cancel.

Most employers have a cut-off date early/mid-month so you need to move quickly if you want to do it this month. Which is why I've not waited for Stepchange to reply. Co-op and Barclays are usually BR friendly or go on line.

It's essential you check which bank groups are safe, otherwise they can offset money paid into one entity to pay debts elsewhere.

Then your next salary is safe your new account to cover your living costs when you go BR. Hope things go well.

dave3dtg

No point opening a new account if the only option is bankruptcy because your finances get completely shut down including all bank accounts. The point of bankruptcy is that it's a fresh start...financially you're effectively reborn. I opened 2 new accounts with Barclays with no problems after I went bankrupt. I even had contactless with the cards.

luvchocolate

dave3dtg said:

No point opening a new account if the only option is bankruptcy because your finances get completely shut down including all bank accounts. The point of bankruptcy is that it's a fresh start...financially you're effectively reborn. I opened 2 new accounts with Barclays with no problems after I went bankrupt. I even had contactless with the cards.

This is not always the case. I opened a new basic account as we recommend on this board and listed it as my every day account ..it was not frozen and worked as normal 

JCS1

Woman53 said:

Thanks a lot Aidan, appreciated.

The reason I asked about the length of IPA is because of the wording:

An IPA is set for a maximum of 3 years.

The "maximum" being the key, my understanding was this can vary and can be set for anything up to 3 years ie 1 or 2 or 3.

If a debt is definitely statute barred, it won’t be included in the bankruptcy because it’s already unenforceable. The creditor won’t be able to take any action to recover it anyway.

I have a few that definitely are but they keep on being sold on to new "enforcements" and they keep on sending letters/trying to call. Not original creditors from over 12 years ago now but whoever they sold the debts on and on and on. Not sure how to handle that - aside from the Bankruptcy application in which I know they wont be included. Still, how to handle those when the letters don't even mention the original company the debt was with? Thanks.

 if you’ve already completed a budget using our online tool our system will have highlighted any expenses which are higher or lower than recommended for your household.

Yes I have and there was several options to click "other" but no freetext entry option only the previously listed options were coming up again under "other".

The one I remember was - there was a space for pet insurance cost but there was no space anywhere to put a cost of pet food so I added the pet food cost to my groceries which bumped it up of course - that is just one that I remember.

Many thanks for your help, appreciated.

An IPA lasts for 3 years, there is no option for 1 or 2 years.  The figure can however be varied if your situation changes.

Don't worry about if a debt is stature barred or not, the BR trumps it.

JCS1

dave3dtg said:

No point opening a new account if the only option is bankruptcy because your finances get completely shut down including all bank accounts. The point of bankruptcy is that it's a fresh start...financially you're effectively reborn. I opened 2 new accounts with Barclays with no problems after I went bankrupt. I even had contactless with the cards.

This is not quite accurate.  The OR does not close down or freeze bank accounts.  It is down to the bank you are with to decide what to do

Woman53

I appreciate people posting trying to be helpful but I posted on StepChange thread looking for StepChange advise on the specific questions I have asked and not people arguing among themselves who is right who is wrong re issues I did not ask about.

Situation is stressful as it is, please kindly don't add to it for me. Thanks.

Woman53

RAS - thanks, the bank account issue is already being sorted this is why I did not ask about this.

luvchocolate

Woman53 said:

I appreciate people posting trying to be helpful but I posted on StepChange thread looking for StepChange advise on the specific questions I have asked and not people arguing among themselves who is right who is wrong re issues I did not ask about.

Situation is stressful as it is, please kindly don't add to it for me. Thanks.

Stepchange are sometimes slow to respond so knowledgeable posters are trying to help you 
There are posters who work for the Isolvency Service and Citizens Advice 
It's your loss to miss out but that's your choice 
Good luck in the future 

StepChange_Aidan

Woman53 said:

Thanks a lot Aidan, appreciated.

The reason I asked about the length of IPA is because of the wording:

An IPA is set for a maximum of 3 years.

The "maximum" being the key, my understanding was this can vary and can be set for anything up to 3 years ie 1 or 2 or 3.

Hi,

Three years is the maximum length of an IPA. In almost all cases the agreement is set for the full three years. Shorter IPAs are possible but are very rare.

If a debt is definitely statute barred, it won’t be included in the bankruptcy because it’s already unenforceable. The creditor won’t be able to take any action to recover it anyway.

I have a few that definitely are but they keep on being sold on to new "enforcements" and they keep on sending letters/trying to call. Not original creditors from over 12 years ago now but whoever they sold the debts on and on and on. Not sure how to handle that - aside from the Bankruptcy application in which I know they wont be included. Still, how to handle those when the letters don't even mention the original company the debt was with? Thanks.

If you have confirmation that a debt is statute barred it would be classed as a non-provable debt in bankruptcy as it’s already unenforceable in a civil court. The debt would already be effectively written off, although debt collection agencies could still contact you about it.

There’s some more information on statute barred debts and a template letter you can send to creditors to ask them to stop contacting you here.

 if you’ve already completed a budget using our online tool our system will have highlighted any expenses which are higher or lower than recommended for your household.

Yes I have and there was several options to click "other" but no freetext entry option only the previously listed options were coming up again under "other".

The one I remember was - there was a space for pet insurance cost but there was no space anywhere to put a cost of pet food so I added the pet food cost to my groceries which bumped it up of course - that is just one that I remember.

Many thanks for your help, appreciated.

The online tool won’t allow you to free-type or add on additional spending categories but if you call in an advisor can do this for you. Were you able to include everything on your budget? It’s important that it’s as accurate as possible so you receive the right recommendations.

We normally include pet food as part of the groceries cost.

Woman53 said:

One more question -  apologies don't see an option to edit post to add a question so have to post here separately.

Applying for Breathing Space - when my bank is notified, will they cancel my overdraft facility? It is a Nationwide (if this matters) and I am up to the limit of quite large overdraft so if they were to cancel it, I would have no money at all for all the DD and any living expenses so need to know that before applying for the Breathing Space.

Many thanks

There is a risk that your bank could freeze access to the overdraft facility if it’s included in the Breathing Space scheme. I’d recommend checking with Nationwide before you apply.

If you then go on to apply for bankruptcy, the bank is likely to close the account once they are notified. We would recommend setting up a basic account with a different bank that you have no debts with. You can do this after the bankruptcy, but it would be easier to do it before, arranging for your income and payments to be moved to the new account.

If you’d like to discuss bankruptcy or your budget in more detail, please get in touch.

Regards,

Aidan

Frank33

Can stepchange even help if I also own a company?

I filled in the form, but as I put me as self employed they said go away  

Where does one get help if it crosses between the two - my business is not in debt, so a business debt service is of little help.