Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

System

squeakygirl wrote: »

A female friend of mine is considering bankruptcy as she has large debts and no income. Her house is in joint names with her husband. Would she be able to remove her name from the deeds / mortgage to leave her husband sole ownerships before she declares, and if so is there a time period for this? Apparently her husband has been paying the mortgage from his salary for many years but they have no proof.

Would really appreciate any advice - should I refer her to Citizens advice or her bank or anywhere else?

Hi and thanks for your post.

I’d recommend that you refer her to us for some free and impartial advice.

There could be various solutions available to her, but if bankruptcy is the best advice we have a dedicated team that will help her through the process free of charge.

I wouldn’t recommend removing her name from the property before going bankrupt as this could have repercussion for her.

I’d recommend that she gather details of the household income, assets and debts and contact our free helpline on 0800 138 1111. We’ll be able to help out.

I hope this helps.

Kind regards,

Mat

rural

I've got considerable debts (business with personal guarantee) and personal £60k+ I won't bore with details of business but most business and personal debts are on a informal monthly payment based on income/expenditure. This took the wolves from the door but they're still camped out there! I'm upto date on bills/ CT etc but this is actually through payday loans which have started to get out of control. My salary is £1700pcm but..
I wrote the Bankruptcy forms 2 years ago but was basically 2 scared and my wife had some related mental problems and this a major factor in my current situation.
I have £3k that can be given to me either before or after filing for the CO. Should I accept and withdraw cash to help through the transition. Bank is ok o/d limit is only £100. Or should I do bankruptcy and open a new acc and put that £3k - I think the OR will be very interested in that money. What are the rules relating to that. A fair chunk will be used to pay the fees.
Next question should I open a new bank account after the CO and get my salary paid into that?
Hoping that you can help,

System

rural wrote: »

I've got considerable debts (business with personal guarantee) and personal £60k+ I won't bore with details of business but most business and personal debts are on a informal monthly payment based on income/expenditure. This took the wolves from the door but they're still camped out there! I'm upto date on bills/ CT etc but this is actually through payday loans which have started to get out of control. My salary is £1700pcm but..
I wrote the Bankruptcy forms 2 years ago but was basically 2 scared and my wife had some related mental problems and this a major factor in my current situation.
I have £3k that can be given to me either before or after filing for the CO. Should I accept and withdraw cash to help through the transition. Bank is ok o/d limit is only £100. Or should I do bankruptcy and open a new acc and put that £3k - I think the OR will be very interested in that money. What are the rules relating to that. A fair chunk will be used to pay the fees.
Next question should I open a new bank account after the CO and get my salary paid into that?
Hoping that you can help,

Hi and thanks for your post.

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

We have a dedicated bankruptcy team that can help you through the full process free of charge.

As your situation is complicated I’d recommend that you give us a call on our free helpline for some advice. You should gather details of your income, expenditure and debts before you call.

You’re correct in assuming that the Official Receiver will have an interest in the 3K and what it’s used for. It’s also worth noting that if you are over drawn at the bank at the time of petitioning (even for £100) that this will be a debt in the bankruptcy. Regards the new bank account, once you petition for bankruptcy all accounts are frozen for a period of time, but I’d recommend opening a new basic bank account prior to petitioning for bankruptcy.

Give us a call and we can talk you through the process and advise on the next steps. 0800 138 1111.

I hope this helps.

Kind regards,

Mat

woodformoretrees

I was made bankrupt in March of this year and have today received a letter from the practitioners dealing with my case to say that they have been informed by HMRC that i have been given a nil tax code and that the my trustees require i pay that sum each month and require me to enter in to an IPA. I must confirm my extra income i am receiving as a result of this nil code and they look forward to receiving my cheque. and happy christmas*. (*they didn't say that bit, I did)

I receive a small pension (less than the tax threshold personal allowance) per year, but other than this I am fully reliant on a self employed income. Obviously as with a lot of self employed people my costs for running the business vary, and my income varies, so I'm not really sure how to go about knowing what my extra income will be from a nil tax code in order to make a monthly payment.

I would welcome any information/advice.

Also, not sure now why I would be given a NT code when my bankruptcy was dated start of March. The letter says it runs until April 2014. Does that sounds as if possibly there has been an error?

System

woodformoretrees wrote: »

I was made bankrupt in March of this year and have today received a letter from the practitioners dealing with my case to say that they have been informed by HMRC that i have been given a nil tax code and that the my trustees require i pay that sum each month and require me to enter in to an IPA. I must confirm my extra income i am receiving as a result of this nil code and they look forward to receiving my cheque. and happy christmas*. (*they didn't say that bit, I did)

I receive a small pension (less than the tax threshold personal allowance) per year, but other than this I am fully reliant on a self employed income. Obviously as with a lot of self employed people my costs for running the business vary, and my income varies, so I'm not really sure how to go about knowing what my extra income will be from a nil tax code in order to make a monthly payment.

I would welcome any information/advice.

Also, not sure now why I would be given a NT code when my bankruptcy was dated start of March. The letter says it runs until April 2014. Does that sounds as if possibly there has been an error?

Hi,

The best thing to do in this situation would be to contact your practitioner and have them clarify what they have mentioned in the letter.

They are trying to establish your income tax liability and you should provide them with all of the information you have even if that’s from a previous tax period.

Give them a call so you can discuss it further with them.

Thanks,
Jess

JMACK

Hi.

Will try and keep this as brief as possible. My wife and I are considering bankruptcy as a way of getting out of negative equity in our house. We are in approx £80k of negative equity and have about £20k of personal debt between us. We are making all payments on time and have never missed a payment on anything. Due to our negative equity our mortgage company will only offer us their SVR which is currently 6%. We are paying over £11k a year towards our mortgage but feel we are getting nowere as in the last 7 years we have paid £77k but our balance has only reduced by £8k so therefore we are considering giving up the house and going bankrupt. We have 2 young kids and just think the money would be better spent on them. Our salary is approx £3400 a month net - would we be expected to pay money every month for the 1st year of bankruptcy? I ask this as we would obviously have to move to rented accomodation for at least 6 years but we would hope to save a considerable amount of money in that time for a deposit to buy again.

Also, theoretically speaking could you borrow money prior to going bankrupt to go towards paying all the fees etc?

Any advice much appreciated..

System

JMACK wrote: »

Hi.

Will try and keep this as brief as possible. My wife and I are considering bankruptcy as a way of getting out of negative equity in our house. We are in approx £80k of negative equity and have about £20k of personal debt between us. We are making all payments on time and have never missed a payment on anything. Due to our negative equity our mortgage company will only offer us their SVR which is currently 6%. We are paying over £11k a year towards our mortgage but feel we are getting nowere as in the last 7 years we have paid £77k but our balance has only reduced by £8k so therefore we are considering giving up the house and going bankrupt. We have 2 young kids and just think the money would be better spent on them. Our salary is approx £3400 a month net - would we be expected to pay money every month for the 1st year of bankruptcy? I ask this as we would obviously have to move to rented accomodation for at least 6 years but we would hope to save a considerable amount of money in that time for a deposit to buy again.

Also, theoretically speaking could you borrow money prior to going bankrupt to go towards paying all the fees etc?

Any advice much appreciated..

Hi and welcome to the forum.

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

We have a dedicated bankruptcy team that talk you through this. The first step is to put together an accurate income and expenditure budget so we can work out what sort payments you would need to make into the bankruptcy.

If bankruptcy is the right solution for you we can also look at the best way to pay the fee.

It is worth noting that some mortgage companies will ask if you have ‘ever’ been bankrupt (even if it’s six years ago or longer) this could have an impact on what mortgage products you are offered in the future even if the past bankruptcy is no longer on your credit file.

In your situation I’d also recommend seeking some independent financial advice in regards current mortgage products from an independent financial advisor.
It’s also worth noting that bankruptcy can have an impact on some forms of employment, your tax code and all your banking facilities.

I’d recommend that you gather details of your income, expenditure and debts and contact our free helpline on 0800 138 1111

I hope this helps.

Kind regards,

Mat

emerson

Hi,

I have a bankruptcy hearing scheduled for 13th January and am trying to figure out the best arrangements to make for receiving my weekly wages and paying direct debits in the period between having my accounts frozen and being able to open a new account.

I currently use a First Direct 1st account for everything. They are not on my list of creditors and there is no overdraft facility on the account. Will the account be frozen on the actual day of the hearing? (My wages are due to be paid in the following morning so this is an important question!)

How long are accounts normally frozen for, and am I likely to be able to continue using it as normal once it is unfrozen?

Secondly, I have filled in the fee remission form EX160 and collected the necessary evidence. Is it possible to get this processed by the court in advance of the hearing, just in case there are any problems?

Thanks
John

StepChange_James

emerson wrote: »

Hi,

I have a bankruptcy hearing scheduled for 13th January and am trying to figure out the best arrangements to make for receiving my weekly wages and paying direct debits in the period between having my accounts frozen and being able to open a new account.

I currently use a First Direct 1st account for everything. They are not on my list of creditors and there is no overdraft facility on the account. Will the account be frozen on the actual day of the hearing? (My wages are due to be paid in the following morning so this is an important question!)

How long are accounts normally frozen for, and am I likely to be able to continue using it as normal once it is unfrozen?

Secondly, I have filled in the fee remission form EX160 and collected the necessary evidence. Is it possible to get this processed by the court in advance of the hearing, just in case there are any problems?

Thanks
John

Hi John,

The length of time it takes for your account to get frozen will depend on Official Receiver's office but I'd suggest preparing for it being frozen on the actual day of your hearing.

The length of time can vary too but as a general rule of thumb, I normally say it's a couple of days.

There's nothing stopping First Direct from allowing you to continue using your account once it's unfrozen (defrosted?) but in practice many banks aren't willing to keep accounts open after bankruptcy. You could get in touch with them to check if they have a policy.

Barclays bank do allow undischarged bankrupts to have basic bank accounts with them, so you'll be able to get some sort of account (even if there are Barclays debts going into the bankruptcy).

I'd say most courts will be happy to take a look at your remission forms in advance of the hearing and should be able to tell you if there'll be any problems with your form. If you call or pop in to the court they'll be able to tell you more.

All the best.

James

emerson

Thanks James,

I phoned the court (Birmingham) but unfortunately they won't look at the remission form until the day of the hearing. Seems counterproductive to me as they could probably save themselves a lot of time due to cancelled hearings if problems with the forms could be identified beforehand.

I'm going to try to have the fee with me in cash, just in case.

Thanks again