Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_James

szracer wrote: »

Hi there,

Not sure if I'm asking this in the right topic, and I feel guilty asking it as I know there are many on here with bigger problems than mine, but...

I was a director of a company with my wife, which unfortunately (After 10 successful years) went into pre-pack administration last year. My wife formed a new company, and I started up on my own, as self-employed. I was not personally made bankrupt or insolvent.

I am lucky enough to own the freehold of the retail premises which my wife's (old and new) company rents. This is personally owned, not through a company.

However, I just phoned NFU to renew my car insurance, and they told me that because I had been a director of a company which had gone into administration, the woman at my local office gave a 'tip' that would probably be unwilling to renew either my landlord insurance, or my car insurance this year.

I've since managed to get new car insurance from someone else, but every time I try to get a quote for landlord's insurance (from other brokers), I'm told that they won't insure me because my company wnet into administration.

I'm not personally bankrupt, and my insurance is through me personally, not a company. What can I do?

Hello,

Being the director of a company that went into administration is something that wouldn't usually be reported on your credit history, so I guess this is something that is asked during the application questions.

I'm a bit stumped about what you can do about this. Companies don't have to offer insurance to people but it seems strange to me that this would be a reason for them to not want you as a customer.

It may be worth copy and pasting your question to this board: http://forums.moneysavingexpert.com/forumdisplay.php?f=21 as it'll be more likely to be seen by someone who understands the insurance industry.

Kind regards

James

Redsleduk

I really appreciate any info on this so many many thanks in advance;

I have debts totalling 48k from a marriage that ended in 2010. They are all unsecured (36k from negative equity in a house sale). I'm with a new partner who is divorced but house/financial side not quite finalised. Her ex wants to be released from the joint mortgage so he can go off and buy again. My partner works about 25hrs a week and is trying to remortgage with her father as guarantor so her ex can be removed and she will be the sole owner. I pay all the bills and mortgage. This enables my 2 children and her 2 children to have a home still.

I believe that an Iva might not be my best option as I don't own a home and an IVA is for five years as oppose to bankruptcy which is a harder but payments are for 12months. Point is I'm pretty certain that bankruptcy is my path.

Anyway, if my partner goes for a mortgage with her father as guarantor and the repayments are for example 550£ a month (because in a nutshell my earrings cover it) what would happen if I then filed for bankruptcy?

To clarify, outstanding partners mortgage is 146,000, father wants to pay 46k off, leaving 100k to remortgage. Partner is only able to get a 35k mortgage on her earnings so father will go guarantor to get full 100k but monthly repayments will still be in region of 600£ per month (currently 576£) which I will pay (as I have been for last 18months or so)

So if this is how it panned out and then I went bankrupt where would we stand with my partners mortgage that technically I am paying?

I hope I've not waffled in a way that makes me unclear in what I'm seeking advice for.

Many thanks in advance

Thank you

System

Bordeau wrote: »

Hi,

Thank you first for all your helpful answers I had the chance to read through the post, it did help me with some of my questions.

I do have a couple though. I am seriously considering to go Bankrupt, however I fear I might not be able to get a bank account with barclays once i will be declared bankrupt. It is actually one of my debtors (it was a business account).
I am also wondering how the transition works, as I am employed, I wonder how I can get my wages to be paid if my current bank accounts are closed ?

Thanks again for your help.

Hi and thanks for your message.

You should be able to get another basic bank account with a bank not connected to any of your creditors. If the banks are unwilling to let you open a basic bank account you could try a post office account.

I’d recommend timing the bankruptcy so that you open the new account, get your bills and wages transferred across and then petition. It is possible that the new account will be frozen for a while, so you’d need to make sure you had enough money to cover your essential costs during this time.

If you’re thinking of going bankrupt I’d recommend that you take some free and impartial advice from one of our dedicated bankruptcy advisors. Give us a call for more details.

If you need any further advice please get back to me.

Kind regards,

Mat

System

Redsleduk wrote: »

I really appreciate any info on this so many many thanks in advance;

I have debts totalling 48k from a marriage that ended in 2010. They are all unsecured (36k from negative equity in a house sale). I'm with a new partner who is divorced but house/financial side not quite finalised. Her ex wants to be released from the joint mortgage so he can go off and buy again. My partner works about 25hrs a week and is trying to remortgage with her father as guarantor so her ex can be removed and she will be the sole owner. I pay all the bills and mortgage. This enables my 2 children and her 2 children to have a home still.

I believe that an Iva might not be my best option as I don't own a home and an IVA is for five years as oppose to bankruptcy which is a harder but payments are for 12months. Point is I'm pretty certain that bankruptcy is my path.

Anyway, if my partner goes for a mortgage with her father as guarantor and the repayments are for example 550£ a month (because in a nutshell my earrings cover it) what would happen if I then filed for bankruptcy?

To clarify, outstanding partners mortgage is 146,000, father wants to pay 46k off, leaving 100k to remortgage. Partner is only able to get a 35k mortgage on her earnings so father will go guarantor to get full 100k but monthly repayments will still be in region of 600£ per month (currently 576£) which I will pay (as I have been for last 18months or so)

So if this is how it panned out and then I went bankrupt where would we stand with my partners mortgage that technically I am paying?

I hope I've not waffled in a way that makes me unclear in what I'm seeking advice for.

Many thanks in advance

Thank you

Hi and welcome to the forum

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

As your situation is complicated I’d recommend that you gather details of your income, expenditure and debts and call our helpline.

If bankruptcy is your best option you’ll speak to our dedicated bankruptcy team who will be able to talk you through this. At your bankruptcy hearing the judge will ask if you have sought advice from a specialist.

Our helpline is on 0800 138 1111 and it’s a free call.

I hope this helps.

Kind regards,

Mat

NJR_FiveNine

Hi

We are hoping for some advice.

My wife bought a studio apartment at the very height of the housing boom with her ex husband. Since then the value of the studio has halved from £120k to around £60k. The mortgage remains £95k - it is interest free and she used a £25k deposit when buying it. There is therefore around £35k negative equity in it.

My wife is remarried (to me) and her ex husband is also remarried. We have just had our first baby and her ex husband has 2 young children with his new wife so neither of us are able to live in the studio apartment as it is tiny.

Her ex husband refuses to contribute anything towards the studio and we have had to organise the mortgage payments, building service charge and upkeep for the past 5 years or so. We actually lived there ourselves for 2 years before circumstances changed. In the meantime we have had rented it out to friends without the mortgage lender's permission as my wife had no other way of making the payments. We know this is wrong but there was no other option. We did not want to default on payments.

The latest person has just gave their notice to leave and now we are in a position that we cannot afford to pay the mortgage once he moves out.

I support myself, my wife and son with my wage. The only income my wife has is Maternity Allowance and that runs until the end of May 2014.

Come November the mortgage payments will not be made.

What option does my wife have? Now that we have a family there is absolutely no way we can afford our current home and pay the studio. Plus I am not prepared to put any more of my own wage towards a property that I am not liable for.

Thanks

StepChange_Private_Messages

NJR_FiveNine wrote: »

Hi

We are hoping for some advice.

My wife bought a studio apartment at the very height of the housing boom with her ex husband. Since then the value of the studio has halved from £120k to around £60k. The mortgage remains £95k - it is interest free and she used a £25k deposit when buying it. There is therefore around £35k negative equity in it.

My wife is remarried (to me) and her ex husband is also remarried. We have just had our first baby and her ex husband has 2 young children with his new wife so neither of us are able to live in the studio apartment as it is tiny.

Her ex husband refuses to contribute anything towards the studio and we have had to organise the mortgage payments, building service charge and upkeep for the past 5 years or so. We actually lived there ourselves for 2 years before circumstances changed. In the meantime we have had rented it out to friends without the mortgage lender's permission as my wife had no other way of making the payments. We know this is wrong but there was no other option. We did not want to default on payments.

The latest person has just gave their notice to leave and now we are in a position that we cannot afford to pay the mortgage once he moves out.

I support myself, my wife and son with my wage. The only income my wife has is Maternity Allowance and that runs until the end of May 2014.

Come November the mortgage payments will not be made.

What option does my wife have? Now that we have a family there is absolutely no way we can afford our current home and pay the studio. Plus I am not prepared to put any more of my own wage towards a property that I am not liable for.

Thanks

Hi NJR_FiveNine,

Welcome to the forum.

To be able to accurately advise you we would need some more info. You’d benefit from our impartial debt advice. We could have a look at your budget with your situation as it is now and see what’s best going forward. There will be options open to you. Once you’ve had some debt help you can approach the mortgage company with a payment offer and options. All of the advice we offer is free and impartial.

You can get a full budget assessment and confidential online advice using our free Debt Remedy tool or you can give us a call and discuss things with a debt advisor.

Thanks,
Jess

michaela888203

I am in a difficult position and need as much advice as I can get.

We (me and my ex husband) bought our house in 2006, within in a month of us being here we both lost our jobs, as a result of this we went on interest only, with the payments being £850 per month. Our financial advisor told us to apply for interest only, and knowing that we didn't have an endowment, he told the mortgage company that we did. We have stayed on interest only since, four years ago, my husband and I split up, we lived in the house together but apart for 9 months with an agreement that he paid the mortgage and I paid all the bills, we were both back working at this time. I came home from shopping one day and he had disappeared and moved back to Denmark, I then found out that he hadn't infact been paying the mortgage at all, so I rang them and told the the situation and we agreed a payment plan, which I paid, and I am now back to normal payments of £850 per month, and have been for the last three years. However, last Thursday I lost my job, I have a 13 year old daughter and no money coming into the house now, I am actively looking for a job, however I don't know what to do with the house. I know that I have to move, the house is too big for us anyway. My ex husband doesn't and hasn't paid any money into the house since leaving, but his name is still on the mortgage. His non payments, has left me with a terrible credit score anyway, the way I am thinking right now is to hand back the house to the mortgage company and rent somewhere. Does anyone have any advice for this difficult situation?

StepChange_James

michaela888203 wrote: »

I am in a difficult position and need as much advice as I can get.

We (me and my ex husband) bought our house in 2006, within in a month of us being here we both lost our jobs, as a result of this we went on interest only, with the payments being £850 per month. Our financial advisor told us to apply for interest only, and knowing that we didn't have an endowment, he told the mortgage company that we did. We have stayed on interest only since, four years ago, my husband and I split up, we lived in the house together but apart for 9 months with an agreement that he paid the mortgage and I paid all the bills, we were both back working at this time. I came home from shopping one day and he had disappeared and moved back to Denmark, I then found out that he hadn't infact been paying the mortgage at all, so I rang them and told the the situation and we agreed a payment plan, which I paid, and I am now back to normal payments of £850 per month, and have been for the last three years. However, last Thursday I lost my job, I have a 13 year old daughter and no money coming into the house now, I am actively looking for a job, however I don't know what to do with the house. I know that I have to move, the house is too big for us anyway. My ex husband doesn't and hasn't paid any money into the house since leaving, but his name is still on the mortgage. His non payments, has left me with a terrible credit score anyway, the way I am thinking right now is to hand back the house to the mortgage company and rent somewhere. Does anyone have any advice for this difficult situation?

Hi Michaela,

Thanks for posting. I'm sorry to hear about your job.

I don't know if you've already looked at this, but it's probably worth getting a benefits check to see what you're entitled to claim. We've got an online benefits checking tool on our site that should give you an idea of what's available: http://www.stepchange.org/Howwecanhelpyou/Benefitscheck.aspx.

With the house, I'd say the first priority should be to speak to the mortgage company and explain the situation. If you're currently back up to date with the mortgage then they may be willing to come to an arrangement to give you a bit of time.

Voluntary possession (handing the keys back) is usually a last resort as it tends to involve quite a bit of expense and a loss of control of the selling process. It can sometimes be the best option but usually it's better to try to find an alternative arrangement.

For example, many mortgage companies have "assisted sale" schemes. Which means you sell the house and they'll help you through the process. These options depend on your mortgage company though, so it's best to talk to them.

Also, once you know what your income is going to be while out of work, you might want to get in touch with us for some more in depth advice. We can help you put together an income and expenditure budget and recommend the best way forward.

Mortgage companies often like to see an income and expenditure budget so they can see what it's possible for you to pay (if anything). So they might suggest you get in touch with us too.

Our contact details are in my signature below.

Kind regards

James

michaela888203

Thanks for your advice, the problem I have is that I won't be able to afford it even with a new job. I am thinking of declaring myself bankrupt but don't know the process

StepChange_James

michaela888203 wrote: »

Thanks for your advice, the problem I have is that I won't be able to afford it even with a new job. I am thinking of declaring myself bankrupt but don't know the process

Hi Michaela,

The process to declare yourself bankrupt isn't that complicated. You fill out an application form (admittedly it's quite big) then you go to court and have a short meeting with a judge to confirm it and if your case looks straightforward it's not unusual for the judge decide a meeting isn't needed.

I should point out that secured debts like mortgages aren't included in bankruptcy. If the property was sold and you'd not signed anything to exclude the shortfall from bankruptcy then it could then be included in bankruptcy.

Before starting the application process I'd recommend either calling us up for advice (http://www.stepchange.org/Contactus.aspx) or using our online Debt Remedy tool (http://www.stepchange.org/msehelp).

Either way you'll get a recommendation about the best way to move forward. If it's bankruptcy then we'll give you the contact details for our bankruptcy team and they can help guide you through the process.

Kind regards

James