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Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

edited 9 October 2018 at 10:56AM in Bankruptcy & Living With It
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  • Hi,

    I attended the County Court today with my husband to make representations about an application for a Charging Order to be put on our property (re a CC debt in the sum of approx £10K that he ran up a few years ago). As my husband has a number of other creditors the Judge has decided the Interim Order should continue while the applicant makes contact with the other creditors. In the meantime he suggested my husband should commence making repayments at £40 a month (the amount he stated he could afford).

    All told my husband has nearly £30K worth of debt and the Judge mentioned that bankruptcy may be the only option.

    Our mortgage is on 50% of a shared ownership property. My husband pays the rent on the 50% owned by the housing association along with the council tax. However, I pay the mortgage along with all the utilities. Will this affect the OR's decision to sell the property?
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  • I may need to go bankrupt in the near future. On one of the credit cards which is part of the debt, my partner is an additional card holder but has never used the card. Will she be liable for the debt if I go bankrupt? Also, what happens to the joint account we have? Will it be closed or will my name be removed from it? And one final question. My daughter is in a fee-paying school. Will the OR take into account her school fees?
  • StepChange_JamesStepChange_James Organisation Representatives - Private Messages may not be monitored
    861 posts
    Lots of different threads n info do wanted to ask and get done views

    I called NRAM today n asked to vutary surrender .. They ok n sending out forms .. I explained £16k negative equity etc .. I asked where I legally stood if I signed forms to surrender in Feb regarding equity as we are going to file BR in June .. Couldn't answer n apparently that team are non customer facing ...

    So if I sign these forms n then file got BR in June how does this affect me in future any ideas who I call ? I'm only wanting to sign as due to changes with concll tax etc we will have to pay this now as well as uniccupied insurance costing me £145 a month which I dont have :-( so want out ASAP ..

    Hi Sunshine,

    Thanks for posting. It would depend on what's written in the small print of the forms, but quite often there will be something about the shortfall being excluded from bankruptcy. If this is the case then it's a usually a good idea not to sign.

    Secured debts aren't included in bankruptcy but if the house is repossessed, then any shortfall would become an unsecured debt and could be included in the bankrutpcy (providing you've not signed any forms that would exclude it from BR).

    I'd suggest giving us a call to talk things through. We can give you a second opinion on bankruptcy and also talk you through the best way to go bankrupt and deal with the property if these are the best options. Here's the contact details: http://www.stepchange.org/Contactus.aspx.

    Kind regards

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • StepChange_JamesStepChange_James Organisation Representatives - Private Messages may not be monitored
    861 posts
    hermyam wrote: »
    Hi,

    I attended the County Court today with my husband to make representations about an application for a Charging Order to be put on our property (re a CC debt in the sum of approx £10K that he ran up a few years ago). As my husband has a number of other creditors the Judge has decided the Interim Order should continue while the applicant makes contact with the other creditors. In the meantime he suggested my husband should commence making repayments at £40 a month (the amount he stated he could afford).

    All told my husband has nearly £30K worth of debt and the Judge mentioned that bankruptcy may be the only option.

    Our mortgage is on 50% of a shared ownership property. My husband pays the rent on the 50% owned by the housing association along with the council tax. However, I pay the mortgage along with all the utilities. Will this affect the OR's decision to sell the property?

    The courts would look to calculate your husband's "beneficial interest" which is the term they use for his share of the equity. If you've paid more towards buying the house than him then this may be taken into account in this calculation.

    It's quite likely that the courts will want your husbands beneficial interest, which will mean somebody giving the courts the cash to "buy" the equity from them or the house to be sold to release the money.

    Having a property doesn't stop bankruptcy from being an option but it does mean there's more to take into account when making the decision. I'd suggest getting in touch with us for advice on whether it's the right thing.

    The first thing to do is visit our online debt advice service Debt Remedy (http://www.stepchange.org/msehelp) to help you find a solution to your debt problem quickly.

    Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

    To help you fill in the form, it’s best to gather together information about:
    • Your income
    • Your expenditure
    • The creditors you owe money to

    You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

    If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

    If you phone us it may be possible to refer you directly to a debt advisor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

    Kind regards

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • StepChange_JamesStepChange_James Organisation Representatives - Private Messages may not be monitored
    861 posts
    PurpleCalx wrote: »
    I may need to go bankrupt in the near future. On one of the credit cards which is part of the debt, my partner is an additional card holder but has never used the card. Will she be liable for the debt if I go bankrupt? Also, what happens to the joint account we have? Will it be closed or will my name be removed from it? And one final question. My daughter is in a fee-paying school. Will the OR take into account her school fees?

    Hello,

    Additional card holders on credit card accounts don't have any responsibility for debts. It's strange that the system works that way, but in this case it's probably a good thing.

    When you go bankrupt you inform the courts of all accounts you're named on, including joint accounts. The courts will then freeze the account, carry out a quick investigation (mainly to make sure there aren't huge amounts of cash in there) and usually unfreeze within a few days.

    Once unfrozen it would be down to the bank's internal policies what happens. Some would change it to a sole account in your wife's name others would close it down. There's a slim chance they may keep both of you on the account I suppose but I wouldn't bank on it (no pun intended!).

    The decision on the school fees would be down to the official receiver, so it's hard to say for certain. My instinct is that they wouldn't see this as an essential item and wouldn't include it in your budget as they would class it as a luxury.

    I'd suggest getting in touch with us for advice if you're not certain bankruptcy is your best option. We can help you plan a budget, look at the options and if bankruptcy is best we can talk you through the process.

    You can get advice from us using our online advice tool, Debt Remedy (http://www.stepchange.org/msehelp) or by giving us a call (http://www.stepchange.org/Contactus.aspx).

    All the best.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Hi all,

    Firstly, if I'm in the wrong place I'm sorry, secondly, this is my first ever post on a forum so be gentle.

    I have a question I was hoping someone could help me with.

    I petitioned for bankruptcy in sep 2010 and my flat was subjected to a suspended possession order provided I keep up my payments and repay some of the outstanding debt.

    I'm terribly unhappy in my flat, permanently struggling and stressing and just want to leave...can I simply just give the building society the keys and will the shortfall from sale still be applied to the bankruptcy leaving me free to start over?

    Any advice would be greatly appreciated,

    Rich

    Very confused, worried, extremely unhappy
  • PurpleCalx wrote: »
    I may need to go bankrupt in the near future. On one of the credit cards which is part of the debt, my partner is an additional card holder but has never used the card. Will she be liable for the debt if I go bankrupt? Also, what happens to the joint account we have? Will it be closed or will my name be removed from it? And one final question. My daughter is in a fee-paying school. Will the OR take into account her school fees?

    I had the same problems and the advice you have been given already is spot on. Card holder is just that, the holder of a card, not jointly responsible for the account. I found that my accounts where closed, they do have the option to leave your partner on alone but generally the link to yourself goes against most bank policies. Depends on which bank you are with, the only bank that would give me a new account was the co-operative...who I must add are fantastic!

    Schooling wise, the Official receiver takes into consideration many different factors and it depends which stage in their schooling they are at. If a change in schooling would be detrimental to their studies, ie in the final years of school you should be ok, otherwise you may have to consider taking them out.

    I'm new to this and don't know if that helps, just what I know through experience...and for the record, I know it's not always the best option and it does have its downsides, but bankruptcy for me gave me a new lease of life...I just need to sort my flat problems now!

    Take care
  • edited 17 January 2013 at 12:45PM
    StepChange_JamesStepChange_James Organisation Representatives - Private Messages may not be monitored
    861 posts
    edited 17 January 2013 at 12:45PM
    Hi all,

    Firstly, if I'm in the wrong place I'm sorry, secondly, this is my first ever post on a forum so be gentle.

    I have a question I was hoping someone could help me with.

    I petitioned for bankruptcy in sep 2010 and my flat was subjected to a suspended possession order provided I keep up my payments and repay some of the outstanding debt.

    I'm terribly unhappy in my flat, permanently struggling and stressing and just want to leave...can I simply just give the building society the keys and will the shortfall from sale still be applied to the bankruptcy leaving me free to start over?

    Any advice would be greatly appreciated,

    Rich

    Very confused, worried, extremely unhappy


    Hi Rich,

    Apologies for not replying sooner, I typed out a response to your question yesterday but mustn't have pressed reply. I hope my second attempt at replying is as good as the first. (UPDATE - I responded to this question on the thread you created rather than on here. So I'm not going mad, just forgetful)

    Basically, you should be able to include any future secured lending shortfall in your bankruptcy provided you listed the borrowing in your original bankruptcy debt (thereby making it a debt that was taken out before your BR).

    The best thing to do is to speak to your official receiver and check with them before you do anything else.

    The other things to be careful of would be any forms your building society ask you to sign if you're giving them back the keys. Often there is small print that asks you to agree for any shortfall to not be included in bankruptcy. Needless to say it's best not to sign this form.

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Hi. My partner and I are seriously considering bankruptcy to try and make a fresh start - we have considerable unsecured debt between us and my partner has been unable to work for a number of years due to illness so we never seem to make any inroads into clearing the debt. I work for a local authority and am concerned that gong bankrupt might put my job at risk - is this a valid concern?
  • StepChange_JamesStepChange_James Organisation Representatives - Private Messages may not be monitored
    861 posts
    geekychik wrote: »
    Hi. My partner and I are seriously considering bankruptcy to try and make a fresh start - we have considerable unsecured debt between us and my partner has been unable to work for a number of years due to illness so we never seem to make any inroads into clearing the debt. I work for a local authority and am concerned that gong bankrupt might put my job at risk - is this a valid concern?

    Hello,

    It's definitely something that needs to be checked out before applying for bankruptcy. People who work for local councils or government offices can find that their job is affected by bankruptcy, or if it doesn't affect your current job it could rule out future career paths.

    Your employment contract should say if bankruptcy would cause any issues with your job. Sometimes it can be better to talk to someone in HR in confidence to see what the impact would be.

    If you're giving serious thought to bankruptcy I'd recommend getting in touch with us if you haven't already. You can do this online (http://www.stepchange.org/msehelp) or over the phone (http://www.stepchange.org/Contactus.aspx).

    We'll be able to tell you if bankruptcy is your best option and if it is we'll talk you through the process.

    All the best.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

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