Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

candygirl78111

Edited for noq

StepChange_James

advicerequest wrote: »

Hello there - I'm hoping someone can give me some advice. As part of my job, I've been advised I need to be a joint signatory on the company managers' bank account in order to pay invoices etc.
As far as I can gather, the person who is the current joint signatory has a joint account set up with the manager (I'm not sure if it's set up as a business or personal account) - he's leaving the company so it's now my responsibility to take on that part. I'm really concerned as I declared bankruptcy in Nov 2007, was discharged a year later and had an BRO for 3 1/2 years. My credit file is clean with the exception one debt which is still showing as outstanding even though I have written to them to advise it was included in my original bankruptcy. I'm really concerned that the bank will refuse me as a joint signatory and I'll have to explain why. Do you know what the policy normally is for joint bank accounts after bankruptcy?

Hello,

I don't think there's a set process for this, it would all depend on the individual bank's policies and the kind of account you were applying for.

If I've got my maths right, I'd have thought the record of your bankruptcy would be still showing on your credit file until November this year (six years from the date of your bankruptcy). So it seems a bit strange it's not showing, but things do sometimes get missed by credit reference agencies.

If the account doesn't have any lending facilities (overdrafts, credit cards, etc) then it's less likely that they'll have high standards on the credit checks, because they're not risking any of the bank's money.

Also, if you're declined on the basis of your credit score it could be for many other reasons than bankruptcy. Recently changing jobs or address can also make it hard to get credit or even not being on the electoral roll.

Banks shouldn't disclose details about your credit history to other people, so if you're turned down I can't see why that would lead to your employer knowing about your bankruptcy.

It's worth bearing in mind that you'll potentially be liable for any debt on this bank account if you're set up as a joint account holder. Business bank accounts often have signatories set up that can sign cheques etc but aren't liable for the debt on the account.

I suppose doing the job I do makes me a bit pessimistic in these situations, but I'd recommend thinking carefully before signing up to an account that could lead to you being liable for debts incurred by the company you work for.

Kind regards

James

StepChange_James

candygirl78111 wrote: »

Hi,

I am currently considering going bankrupt, and here is my story.

I owe around £30,000 due to having a business that didn't work out, and for a time I had to live on my credit cards alone. I didn't find any permanent employment after my business closed, so never went into a debt repayment plan which I am glad about. I returned to full-time education two years ago, and am about to start the final year of my degree.

I am considering bankruptcy so I can graduate and get a job without worrying about the debtors coming after me. I have no assets at all (living at home!) and my car is old and although I love it, it's not worth much.

Is it going to be a good idea? I know it's a catch 22...bury my head and they'll find me, go bankrupt and I'll struggle in the future with credit. I am so undecided.

Thanks.

Hi Candygirl,

Deciding whether to go bankrupt or not is always a big decision and it's something that needs careful thought and reliable advice.

I'm afraid I don't know enough about your situation to give you a straight yes or no. The question I ask myself before recommending bankruptcy to someone is "Can this person pay their debts back in a reasonable amount of time?"

There's more to it than that simple question but it's usually a decent guide. If you can pay the debts back (even if it means making reduced payments to begin with) then it's probably best to avoid bankruptcy. If you think it's unlikely you'll pay them back then bankruptcy can be a way to get a fresh start.

If you're likely to leave uni and walk into a well paying job then it could be worth hanging back, if you're expecting things to be tough then bankruptcy might be worth looking into more.

I'd suggest going through our online advice tool, Debt Remedy - http://www.stepchange.org/msehelp - to get more in depth and personalised advice about your finances. It's free, takes about 20 minutes and will tell if you bankruptcy (or something else) is your best option.

Alternatively, all Universities have student support services that will include someone who gives money advice. You could get in touch (even outside of term time) and ask them for advice.

All the best.

James

stressbags

Could I just ask another question? Do deferred student loans count as creditors in a DRO as it may make my debts more than the £15000 limit. I've never earned enough to repay these, so far they have been deferred every year and they don't get written off in the DRO so I'm not sure.

System

stressbags wrote: »

Could I just ask another question? Do deferred student loans count as creditors in a DRO as it may make my debts more than the £15000 limit. I've never earned enough to repay these, so far they have been deferred every year and they don't get written off in the DRO so I'm not sure.

Hi there,

Student loans are not included in a DRO so they do not count towards your level of debt.

Take care,
Jess

richw458

Hi Folks
Could you please clarify my situation regarding my credit report with Equifax etc
I went BR in September 2005 followed by a 7 year Bru which ends at the end of this month . My BR followed a messy divorce and some subsequent stupidity by myself , I went BR to clear the decks for a fresh start with my new wife .
From reading other post am I right in saying that my credit records showing defaults etc should have been cleared off by now . My wife hasn't been tied to me in any official financial way apart from a joint bank account opened this year , the house and the mortgage with Northern Rock now Virgin Money is in her sole name as it was when we met .
We are at the point where we want to move house and go up the housing ladder a couple of steps . To do this obviously we will have to up the mortgage a bit and I will have to hopefully go on the mortgage , there is about £100,000 equity in the property with £66000 owing . Have you any ideas which is the best way to approach this and do I need tell the mortgage companies that I have been BR .
Any help would be greatly appreciated

System

richw458 wrote: »

Hi Folks
Could you please clarify my situation regarding my credit report with Equifax etc
I went BR in September 2005 followed by a 7 year Bru which ends at the end of this month . My BR followed a messy divorce and some subsequent stupidity by myself , I went BR to clear the decks for a fresh start with my new wife .
From reading other post am I right in saying that my credit records showing defaults etc should have been cleared off by now . My wife hasn't been tied to me in any official financial way apart from a joint bank account opened this year , the house and the mortgage with Northern Rock now Virgin Money is in her sole name as it was when we met .
We are at the point where we want to move house and go up the housing ladder a couple of steps . To do this obviously we will have to up the mortgage a bit and I will have to hopefully go on the mortgage , there is about £100,000 equity in the property with £66000 owing . Have you any ideas which is the best way to approach this and do I need tell the mortgage companies that I have been BR .
Any help would be greatly appreciated

Hi and welcome to the forum,

The defaults should have fallen off your credit file by now, so you’d need to contact the lender. If they refuse to update your credit file correctly you may need to contact the information commissioner’s office http://www.ico.org.uk/

We’re debt advisors so can’t give too much advice about mortgages, but from my understanding most lenders do ask if you have ever been bankrupt and you would need to admit to this on the forms. The important thing is to seek independent advice from a dedicated mortgage advisor.

Kind regards,

Mat

madbadrob

Hi There,
I have today received a letter from Marstons informing me they are coming to seize property next week for a debt to the old legal aid beaureau. I have briefly spoke to CAB about this and they have suggested that I pay £90 and make a simple bankruptcy. I did offer Marstons a small figure as a weekly repayment but they have stated that this is not acceptable as it is a high court writ that has ordered the seizure of goods. Can you explain how this simple bankruptcy works compared to a CVA or a full bankruptcy and is there a maximum value of the debt for this has I have other debts that would be nice to have cleared as well

thank you

System

madbadrob wrote: »

Hi There,
I have today received a letter from Marstons informing me they are coming to seize property next week for a debt to the old legal aid beaureau. I have briefly spoke to CAB about this and they have suggested that I pay £90 and make a simple bankruptcy. I did offer Marstons a small figure as a weekly repayment but they have stated that this is not acceptable as it is a high court writ that has ordered the seizure of goods. Can you explain how this simple bankruptcy works compared to a CVA or a full bankruptcy and is there a maximum value of the debt for this has I have other debts that would be nice to have cleared as well

thank you

Hi there,

By a simple bankruptcy I’m pretty sure you mean a Debt Relief Order (DRO) – they are set up by The Insolvency Service and cost £90 court fee. The maximum value of debt for this solution is £15,000.

A DRO is a form of insolvency for people with a lower level of debt or fewer assets than those that would qualify for ‘full bankruptcy’.
With Marstons bailiffs they should not be able to force entry into your property unless you let them in or they enter through an unlocked window or door. So you should keep your window and doors locked and not open the door if they call round.

I would contact Marstons to tell them you have been recommended a DRO and offer to make a payment based on what you can afford in the meantime. You then need to get expert debt advice to make sure a DRO is correct for you.

You can use our online tool Debt Remedy it uses your budget info to recommended the best way to deal with your debts. If a DRO is right ofr you we can set it up for you.

I hope this helps,

Jess

roadtorecovery

recently became bankrupt (May 2013). Matrimonial home 50/50. OR has offered my interest to spouse which he is going to acquire for a fee. when speaking to solicitor to arrange deeds be send to OR and necessary paperwork to be undertaken. He enquired what the mortgage company are going to do. Is was my understanding that the bank/mortgage company would not be concerned at this mortgage has always been paid. We are in a fixed rate mortgage for 5 years. We have 2 childern and his wages would not be enough to get a mortgage on his own. Will the mortgage company request my spouse go through application process for another mortgage? House is in negative equity. Grateful for any advice.