Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Former_StepChange_Rachel

thisthingsdraggingmedown wrote: »

I don't know if this is the right place to put this, I have just had a knock on my front door, and a lady asked for me by my full name and then gave me a statutory demand for outstanding vat and fines etc total approx. 18k. I still do bits of work as self employed but there is no way I can pay this off. I don't even own my own home and live with my partner and children. I don't know what to do even though I have been expecting this day to come for such a long time. at this precise moment I feel like im going to throw up.

Hi there

Could you please get in touch with us? Statutory demands are not to be ignored and it's really important you get some free and impartial debt advice on what you're best doing moving forward.

You can contact our Helpline on 0800 138 1111.

Best regards

Rachel

Poppy1102

Please help!.....
Short story - 5yrs ago my ex husband threw me and our kids out of our marital home, I had nothing to do with the house even though the mortgage and deeds had my name on it. After a while he moved out and stopped paying the mortgage, house was left empty and eventually repossessed. He has declared bankruptcy but what happens to me and the £61,000.00 negative equity? Am I liable for it now? Do I have to go bankrupt? I have debts of my own of over £5000.00 through credit cards which I can only pay minimum amount and with the interest it'll take a lifetime to clear them! Help!

StepChange_James

Poppy1102 wrote: »

Please help!.....
Short story - 5yrs ago my ex husband threw me and our kids out of our marital home, I had nothing to do with the house even though the mortgage and deeds had my name on it. After a while he moved out and stopped paying the mortgage, house was left empty and eventually repossessed. He has declared bankruptcy but what happens to me and the £61,000.00 negative equity? Am I liable for it now? Do I have to go bankrupt? I have debts of my own of over £5000.00 through credit cards which I can only pay minimum amount and with the interest it'll take a lifetime to clear them! Help!

Hi Poppy,

It sounds like you're likely to be liable for the shortfall on the property. With jointly owned properties both people tend to be "jointly and severally liable" - which means both of you could be chased for the full amount. With your ex going bankrupt then it would mean you'd be the one being chased for the full amount.

If you're in doubt it might be worth giving the mortgage company a call to confirm what the situation currently is.

You don't have to go bankrupt, but it's often the best solution for situations like these. If it's going to be very hard for you to repay your debts and you don't have significant assets that you're likely to lose then it could be worth looking into.

Before making a decision I'd recommend getting debt advice. We can help you with this with our Debt Remedy advice tool. If you put your details in it will provide you with tailored advice and can tell you if bankruptcy is a reasonable strategy. Here's the link: http://www.stepchange.org/msehelp.

Kind regards

James

funky348

Hi,
My fianc! has been hit with a massive debt from 2 creditors. Her car insurance company wants £12700 from her a claim she made in 2009. Working tax wants £3600 off her because they overplayed her.
My fianc! isn't in a financial position to pay off these debts as she hasn't got any disposable income and may be out of work next year.
We've looked at a DRO but our son has £900 in his savings account which is in his and my fianc!s name.

Will this be taken into account?

There is a £2000 whiplash claim in the car insurance debt, would this come under bankruptcy? I know personal injury isn't included in a DRO

Any info will be greatly received

Thanks

Phil

StepChange_Private_Messages

funky348 wrote: »

Hi,
My fianc! has been hit with a massive debt from 2 creditors. Her car insurance company wants £12700 from her a claim she made in 2009. Working tax wants £3600 off her because they overplayed her.
My fianc! isn't in a financial position to pay off these debts as she hasn't got any disposable income and may be out of work next year.
We've looked at a DRO but our son has £900 in his savings account which is in his and my fianc!s name.

Will this be taken into account?

There is a £2000 whiplash claim in the car insurance debt, would this come under bankruptcy? I know personal injury isn't included in a DRO

Any info will be greatly received

Thanks

Phil

Hi Phil,

I don’t know the circumstances of the car insurance claim. But the debt from the car insurance company should be a non-priority debt. Your partner should pay this back at a rate she can afford in installments she can manage. We can help her see how much to offer.

The working tax debt must be paid back as a priority – if she is still receiving benefits the Inland Revenue can reduced her on-going current payments.

As the money in the savings account is jointly in her name it may be considered an asset over the allowed £300 in a DRO which would cause the application to be rejected. The £2000 personal injury claim will not be allowed to be included in bankruptcy.

We can give your partner the free, impartial debt advice she needs to determine what the best solution is for dealing with these debts. We can build her a budget to cover repayments and then provide advice on more long term solutions – if a DRO or bankruptcy is not suitable we can look at other options.

Your partner can get the help she needs using our confidential online tool, Debt Remedy. Using her budget info it will recommend the best way forward. If she’d prefer to speak to an advisor she can contact us.

I hope this helps.

Thanks,
Jess

funky348

StepChange_Private_Messages wrote: »

Hi Phil,

I don’t know the circumstances of the car insurance claim. But the debt from the car insurance company should be a non-priority debt. Your partner should pay this back at a rate she can afford in installments she can manage. We can help her see how much to offer.

The working tax debt must be paid back as a priority – if she is still receiving benefits the Inland Revenue can reduced her on-going current payments.

As the money in the savings account is jointly in her name it may be considered an asset over the allowed £300 in a DRO which would cause the application to be rejected. The £2000 personal injury claim will not be allowed to be included in bankruptcy.

We can give your partner the free, impartial debt advice she needs to determine what the best solution is for dealing with these debts. We can build her a budget to cover repayments and then provide advice on more long term solutions – if a DRO or bankruptcy is not suitable we can look at other options.

Your partner can get the help she needs using our confidential online tool, Debt Remedy. Using her budget info it will recommend the best way forward. If she’d prefer to speak to an advisor she can contact us.

I hope this helps.

Thanks,
Jess

Thanks for your reply. We have done two credit reports from experian & equifax. Neither showed the savings account and a recent statement was only addressed to our 2yr old. Maybe the account isn't in my partners name after.
If it is in my partners name, is it possible to withdraw £650 to pay off some of these debts leaving £250 in the account, and then try for a DRO?
My partner is on maternity leave now and we don't think she is going to be able to work full time for a while, so her income will be minimal to pay off any sort of debt. Also she doesn't recieve any benefits (working or child tax).

Thanks

Phil

Former_StepChange_Rachel

funky348 wrote: »

Thanks for your reply. We have done two credit reports from experian & equifax. Neither showed the savings account and a recent statement was only addressed to our 2yr old. Maybe the account isn't in my partners name after.
If it is in my partners name, is it possible to withdraw £650 to pay off some of these debts leaving £250 in the account, and then try for a DRO?
My partner is on maternity leave now and we don't think she is going to be able to work full time for a while, so her income will be minimal to pay off any sort of debt. Also she doesn't recieve any benefits (working or child tax).

Thanks

Phil

Hi there Phil

if the account is in joint names between your fiancee and your child, it would be best if the payments coincide with events such as the child's birthday, Christmas etc. as this proves that the money is meant solely for your child's future. If it doesn't, it's not the end of the world, it just means that you'd have to do a bit more thorough explaining as to why any payments into the account don't follow that pattern.

you can make equal, pro-rata payments between your creditors out of the money in the account to bring the funds under the £300 threshold. When you make your DRO application, you would simply mention this in the statement that you write as part of that application.

If the account is definitely solely in the baby's name, then this would not be included in the DRO. The competent authority that will put your DRO through will let you know if there's anything on your application that could result in the application being rejected.

Hope this helps. Please write again if you have further questions.

Best regards

Rachel

Liability_X

Hi there,

I am in a position where due to cuts, my employer is reducing the amount of employees, which means competitive interview. If I am made unemployed, I will receive a redundancy payment. My worry is that although I am out of my bankruptcy period, I am still paying a hefty, monthly, IPA and am only half way through. I have taken out insurance which means I will have some income if the worst comes to the worst, but my question is, can all or any potential redundancy pay be taken and since the insurance would roughly only cover my expenses, would I still have to pay something? Hopefully I will keep my job (too young to retire), but am worried about the above scenario.

I tried to understand the info regarding bankruptcy and redundancy but I could not find clarity regarding Redundancy and IPA. (Too many big words for me

Thank you for your time, Liability X

System

Hi,

Hopefully it won’t be an issue and you won’t be made redundant.
When it comes to any redundancy money it may be that you’re asked to pay a lump sum towards the remaining IPA amount. The best thing to do if the situation arises is to contact your Official Receiver for further advice.

The decision would be dependent on your individual situation. Sorry I can’t be more definite.

Thanks,
Jess

Liability_X

Thanks v much that's what I feared... Unfortunately that would be the whole of the redundancy payment.

It appears then there is no clear cut answer, it just depends on your circumstances and your OR.

Thanks anyway. Hopefully it won't arise.