Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

System

me36 wrote: »

Hi Jess,
Thankyou for your reply. So im unable to do anything untill my bankruptcy is finished which takes 6 years I think, in order to get my credit report back to normal.
This is a pain as I need to move and most estate agents do credit check these days.

ive been reading the threads and some people have not been bankrupt for 6 years. How would I find out if my bankruptcy is finished, its been over 2 years now, a bit confused as when I done mine I was told I would be bankcrupt for 6 years.

Hi and thanks for your reply.

I can see you’ve had some good advice from Alistairq already.
The bankruptcy itself will be registered on your credit file for six years. This may restrict access to some forms of credit.

I’d recommend that you contact the Official Receiver who dealt with your bankruptcy to check when your discharge was.

You may want to try a private landlord in regards to rental properties. Not all private landlords run a credit check.

The link contained in the original answer will explain how to rebuild your credit rating.

I hope this helps.

Kind regards,

Mat

System

emachew wrote: »

Hi,
I'm looking at possible bankruptsy due to ex leaving me and kids in right mess.
Long storybut i continued clear his debt and he repaid it by getting in more =
Got 8grand loan to pay off his debters, he left 6 months later, (3mont old and 20month old, crippling mortgage and existing debt payments) hed not paid towards house for ages anyway.

So £585 a month repayments than I was earning and juggling diff credit to stay afloat. Reached out to all debters and told coz always paid and not in arrears couldn't help. So I stopped. Told by mortgage company (bank who also have loan, od and cc with) to find somewhere to rent and voluntary hand back house. So all done. No however I'm possibly goin to have to go bankrupt when the bank sell house for less than I owe. Mortgage is in both names but he's in wind. Bank said irrelevant as ill get billed for full amount as will he they don't split it.

So if seel for 85 I owe 93 that's another 8grand on top of outstanding £5500 loan
£12500 cc debt, £3000 catalogue/store card, and y£3000 overdrafts.
Plus I owe 3000 on either car finance or loan.....but I really need the car for work and with two kids 1 and 2 I'd be lost without it.

Guess my questions are.......
Bankruptsy best option? Can I keep the car? Is the bank right in charging me full amount? In theory both parties could pay the debt and as not talking bank get paid twice (unlikely as he aint oaid towards kids and has lied to csa to avoid paying)

I had a very good credit score and always psid in full and mortgage I overpaid each month. I hsd platinum cc and and very upset I've lost our home and am facing financial ruin due to ex but weve got lovely rented property with nice landlords, just hard to face people now.

Hi and thanks for your post.

It sounds like you would benefit from some free and impartial advice.

I’d recommend that you try our confidential online debt advice service Debt Remedy. It takes about 20 minutes to fill out and will give the best free and impartial advice on your way forward.

If bankruptcy is the best advice we have a dedicated team that can help you with this free of charge. We can also look into the value of the car and whether this can be retained.

I hope this helps.

Kind regards,

Mat

me36

Thankyou for both to who replied to my last message. I will contact the OR to find out if ive been discharged from BR because I had no idea it was 1 year. I have been paying for my credit reports and they say on BR but nothing on there to state its finished and all my old debts are still on there.
Thankyou for all the advice.

StepChange_James

Militaryman1pswich wrote: »

My wife has debts of about £20000 and is struggling to pay them. She does work although is self employed and her pay does vary. On average she earns about £1300 a month from which she uses £800 to pay for the food shopping. I earn and my wage pays for housing and fuel as well as other small debts which I am clearing quite quickly, about £20000. My credit rating is good although suffers due to my wife's debt's Whilst we have a joint bank account she does not put any money into it.

In order to get a fresh start and worry free life we are considering declaring bankruptcy for her. Any help would be appreciated on how this would affect us in the future, ie should we remove her name from the joint account and is this legal.. We don't have a mortgage as we rent.

Thanks in advance

Hello,

Thanks for posting. The effects of bankruptcy vary quite a bit from one person to the next. Someone with lots of valuable assets would stand to lose more, as would someone whose job might be affected.

One of the things that will be the same for everyone is that the bankruptcy would go on her credit history and stay there for six years. This is likely to make it tricky getting credit in the future.

It's unlikely that your rented property would be affected (you can check the tenancy agreement to be sure) and your wife shouldn't have any problems carrying on her business (though she can't be a director of a limited company).

I can't see any reason why you can't change to having separate bank accounts. If you speak to your bank they'll be able to talk you through how to do this. Sometimes it's straightforward and other banks need to close the joint account and open up two new single accounts.

Before she decides on bankruptcy I'd suggest going through our online advice tool, debt remedy - http://www.stepchange.org/msehelp. It'll go through a budget with her and produce a personal action plan. If bankruptcy is the best route then it'll go through what the next steps are.

I don't know much about your situation, so it's hard to be sure, but £800 a month for food sounds like quite a bit. It may be that you've got a large household to feed or this figure includes other expenses too, but if it doesn't it might be worth looking at reducing costs here.

The Debt Free Wannabe forum is full of helpful people who are great at finding ways to reduce bills.

Hope this helps.

James

StepChange_James

skintlad wrote: »

Hi following a messy divorce I have been left with the financial after effects. All of the family debt is in my name. The house got sold which just paid off the mortgage and left no surplus. The ex took everything we owned, all I have is my clothes and my car. I currently owe several lenders which I am paying £1 per month:

Littlewoods £400
Santander cc £2354
Aktiv Kapital for mbna cc’s £3443 & £5523
Natwest cc £4318
Natwest Bank OD £150
Water, gas, elec, sky unpaid bills £400
Solicitor for divorce £1400

Income is £1780
Monthly outgoings are:
Rent/lodging £500
Fuel £250 commuting to work and visiting children
Car ins £45
Gas £33 (share of half bill)
Elec £26
Water £12
Laundry £10
Optician £10
Dentist £10
Prescriptions £8
Haircut £12
Clothing £30 (includes work clothes)
Holiday £40 – this is one of the ways I spend time with kids
Union £17
Pension £145
Car Tax £10
MOT £3.50
Car Maintenance £60 (estimateto include tyres, service and repair)

I have these questions if you can help?
Is bankruptcy the best option?
I am not currently paying into my pension, can I start doings o before I go bankrupt?
Will I get to keep my car its valued approx £2000-£2500 and is a fairly economical diesel hatch?
I am staying with a friend and have no formal rent agreement;will the OR accept this is the case?
I really need a place of my own so kids can stay, will OR take into account that I need to save for deposit, furniture etc?
Is there anything else I can put on the statement of affairs as a living cost that I might not have included in my list above?

Many thanks

Hello,

Thanks for posting. I'll try to answer your questions one by one to keep things simple.

Is bankruptcy the best option?

It's hard to say without knowing more about your finances. If you've not got significant assets that you could lose, have little money available to pay your debts every month and you can't see this changing in the future then it's certainly worth thinking about.

To get more firm debt advice I'd recommend using our Debt Remedy advice tool: http://www.stepchange.org/msehelp which takes about 20 minutes and provides tailor advice for your situation.

I am not currently paying into my pension, can I start doings o before I go bankrupt?

The OR would look at your pension contributions in bankruptcy and make a decision. It depends on the circumstances how they would view it. Rather than say you can't contribute to a pension I'd expect an OR to be more likely to ask for contributions to be reduced.

Will I get to keep my car its valued approx £2000-£2500 and is a fairly economical diesel hatch?

This is another one that's decided by the OR. I'd have thought that they'd probably want to either sell the car or come to an arrangement where someone you know gives the value of the car in cash to the OR to let you keep it.

If you could convince the OR that you needed a car then they may allow you to keep some of the money from selling to car to buy a cheap car.

I am staying with a friend and have no formal rent agreement;will the OR accept this is the case?

I think they'd probably prefer something more formal to be in place. If they can see evidence from bank statements of rent payments being made then that would establish that you were regularly paying that amount if there wasn't anything formally agreement the rent you pay.

The OR would want to make sure that you were paying around about the average for someone renting a room in your area.

I really need a place of my own so kids can stay, will OR take into account that I need to save for deposit, furniture etc?

I'm not sure they would. Again, the specifics of your circumstances would be a major factor in whether this was seen as more important then using that money to pass on towards your debts through regular monthly payments (called an income payment arrangement).

Is there anything else I can put on the statement of affairs as a living cost that I might not have included in my list above?

If you go through Debt Remedy using the link I posted above it'll guide you through a budget and suggest things you might not have thought of. At a glance I'd say food is the most obvious thing missing and I don't think I saw anything for phones in the list (landline, mobile or internet).

On the other hand, £720 a year for car repairs seems pretty high, so you'd probably need to be able to justify this area being higher than average.

I think that covers the questions. If you get advice from us and we recommend bankruptcy we'll give you a contact number for our bankruptcy support team and they can help guide you through the process of going bankrupt.

Cheers

James

flyingcrew

Good afternoon,

I hope you'll be able to give me some advice?

I've been considering bankruptcy for some time, and have now decided my debt is far too much and is never going to disappear, no matter how much i bury my head in the sand.

I've done a lot of research to make sure i am making the right decision, but one area that does concern me and i can't seem to find any information on is with regards to my earnings and possible IPA/IPO.

I work for an airline, and as such receive a basic salary; however i also receive allowances for my living expenditure whilst away.
My question is, would the OR take these allowances into account as income? They are paid to me as a subsistence allowance so i can buy food and eat etc whilst i am out of the country.
Whilst they are paid into my monthly salary and taxed (albeit at a reduced rate) the deductions are also shown on my payslip for the monies i have taken whilst at work. Thus my net pay each month is my basic and whatever money may be left over from my allowances.

I hope this makes sense?! It is a worry as if the OR deems the allowances as income and thus part of am IPO/IPA i wouldn't be able to afford to continue working.

Best regards.

StepChange_James

flyingcrew wrote: »

Good afternoon,

I hope you'll be able to give me some advice?

I've been considering bankruptcy for some time, and have now decided my debt is far too much and is never going to disappear, no matter how much i bury my head in the sand.

I've done a lot of research to make sure i am making the right decision, but one area that does concern me and i can't seem to find any information on is with regards to my earnings and possible IPA/IPO.

I work for an airline, and as such receive a basic salary; however i also receive allowances for my living expenditure whilst away.
My question is, would the OR take these allowances into account as income? They are paid to me as a subsistence allowance so i can buy food and eat etc whilst i am out of the country.
Whilst they are paid into my monthly salary and taxed (albeit at a reduced rate) the deductions are also shown on my payslip for the monies i have taken whilst at work. Thus my net pay each month is my basic and whatever money may be left over from my allowances.

I hope this makes sense?! It is a worry as if the OR deems the allowances as income and thus part of am IPO/IPA i wouldn't be able to afford to continue working.

Best regards.

Hello,

I'd expect your income to be dealt with one of two ways. Either they'll look at your income left after your expenses incurred at work have been deducted or they'll include your full income (including living allowance payments) and then deduct the money you spend while away on the expenses side of your budget.

Either way, the calculations for an IPA/IPO should only end up with you paying a monthly amount you've got left over after covering living costs (including living costs while you're away with work).

Before going bankrupt I'd suggest putting your details into our online advice tool, Debt Remedy - http://www.stepchange.org/msehelp. It takes about 20 minutes and will tell if you bankruptcy is your best option.

Kind regards

James

unsettled

My house was repossessed about 4 years ago. There were also other small debts that were unsecured. I spoke to a solicitor for advice and he told me I was in a position, because of redundancy and divorce, that I would probably not overcome the debt and I was best off to go bankrupt. I neither had the money to pay the fee nor the ability to get help from a charity to help me. He suggested I let the lender on the mortgage declare me bankrupt.

It has never happened. Each letter I have received has been replied to with my current status and that I am not in a position where I can pay to declare myself bankrupt.

I feel as though I'm in limbo. If I am not declared bankrupt is there a time when the debts are removed from my credit rating? I believe it is 6 years, but I'm not sure if that will include the mortgage as well. I have now found a job and am paying my bills and happily just making ends meet. I still do not have the funds to declare myself bankrupt so I still wait.

Is there a point where the limbo ends by virtue of some sort of time statute, or is this something that I will be looking over my shoulder for forever?

Thank you

StepChange_James

unsettled wrote: »

My house was repossessed about 4 years ago. There were also other small debts that were unsecured. I spoke to a solicitor for advice and he told me I was in a position, because of redundancy and divorce, that I would probably not overcome the debt and I was best off to go bankrupt. I neither had the money to pay the fee nor the ability to get help from a charity to help me. He suggested I let the lender on the mortgage declare me bankrupt.

It has never happened. Each letter I have received has been replied to with my current status and that I am not in a position where I can pay to declare myself bankrupt.

I feel as though I'm in limbo. If I am not declared bankrupt is there a time when the debts are removed from my credit rating? I believe it is 6 years, but I'm not sure if that will include the mortgage as well. I have now found a job and am paying my bills and happily just making ends meet. I still do not have the funds to declare myself bankrupt so I still wait.

Is there a point where the limbo ends by virtue of some sort of time statute, or is this something that I will be looking over my shoulder for forever?

Thank you

Hello,

The full cost of the fees to go bankrupt is currently £700, so it's very difficult for many people to get that sort of money together.

Presuming your smaller debts are the standard type of credit debts and they've not obtained any CCJs then there is a 6 year limitation period. This means they can't enforce the debt through the courts if you've not made payments or acknowledged the debt in writing in the last 6 years.

For mortgage shortfalls following repossession the timescale is 12 years.

So it's probably going to be a while before these debts aren't enforceable. If it's not likely that you'll be able to raise the money for the bankruptcy fee then it might be worth seeing if you can get any help with it. This thread has links to the main places that can offer funding: https://forums.moneysavingexpert.com/discussion/4279781.

Kind regards

James

The_mangler

Hi,
Im currently on a DMP with StepChange and my husband has just been accepted for a DRO. This puts my debts at around £17k with payments of £34 going out to my creditors monthly. I was advised bankruptcy was my best option, would the OR take that £34 as payments towards creditors or have I got the wrong end of the stick? (Has been known to happen )
Thanks