Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

longtermplanner

CrazyBird wrote: »

I am currently in a joint IVA with my ex-husband (we split after IVA was started). I am living in a rented room and he is in our mortgaged property. There is also a secured loan on that property that is in both our names. Is there any way I would be able to apply for BR on my own?

yes, you don't need your ex's permission. Bankruptcy petitions are always individual.

nb this doesn't mean than bankruptcy is a good option for you, I was just answering your question.

am now worried I will be in "breach" of the IVA as we haven't completed our annual review

well if you intend to go bankrupt, being in breach of your IVA is the least of your problems!

Is there any equity in the shared property? Can you and ex between you afford the IVA? How long until the IVA finishes?



Where do I go from here? Please help........[/QUOTE]

CrazyBird

longtermplanner wrote: »

yes, you don't need your ex's permission. Bankruptcy petitions are always individual.

Is there any equity in the shared property? Can you and ex between you afford the IVA? How long until the IVA finishes?

There is no equity as there is a mortgage and a secured loan (joint). There are still 4 years left to pay on the IVA. We can afford the IVA at the moment but we are at the minimum amount allowed of £100. I would like to completely seperate from my ex but can't do this while I am still paying on the secured loan. As this is a joint loan, would a BR force me to sell my share of the property?
Thanks

greenblue_2

My husband was recently made bankrupt for a large council tax debt, which we actually disagree with for the most part (we were both students for the majority of the time but had a huge runaround with the council). Anyway, if I get too much into the reasons it will become far more complicated.

I am hoping we can at least have some of this amount dropped, but I am going to form my question on the basis that we will not. We also owe money to another council from a time I had a serious illness, and we do not dispute this. We were slowly paying it off, but because of the bankruptcy it has gone onto that.

My husband recently had the telephone interview with the people handling the bankruptcy and they have included the other council tax debt (the one we do not dispute), however I got a letter from that council saying that I am now the lone person responsible for that debt. Does it make sense for the full amount to go to me AND to my husband's banruptcy at the same time?

We are fairly low earners, with an annual income of approximately £23,000 including tax credits. We have one five year old child. I had read that tax credits (and in some places also child benefit) is excluded from income, but the practitioners are including this in the amount to determine disposable income. We have seen a council money advisor a number of times, and we had help to make our budget. The advisor determined we have no disposable income, but we jiggled this around and worked out we could give £30 a month. This was with child benefit and tax credits included (though they are soon to go down significantly). We don't even think this is a safe amount really without potentially getting into trouble, but we wanted to offer someting rather than the advised nothing.

The practitioner is insisting on £75 a month even though it is clear that we don't have that. I am very worried we will not be able to come up with this if something urgent comes up, such as a dental bill.

We are already as downsized as we can be. We are in contract with things such as mobile and internet, since we have only recently moved to a new (rented) home. We do not drive, we have bus pases for work but our son does not, we wear old, worn out clothing, and we do not go out often. Our budget does not allow for birthdays or holidays (Christmas, not Spain), and won't even allow for all of the basics if we have to commit to this higher amount.

My questions are:

1. Is it true that income from child benefit and tax credits is not to be included in the disposable income? (I got the information about tax credits from a website sponsored by the Scottish Government, and we receive child tax credits in my name.)
2. Should that council tax debt have been counted on my husband's bankruptcy at the same time as being wholly transferred to my name?
3. Any other advice you can spot that I need would be very much appreciated.

I do intend to see the council money advisor again, however am hoping for a second opinion due to the discrepancies we have spotted. It all feels quite wrong that my income is being included in the bankruptcy without me getting the "benefits" of the bankruptcy (I use this term loosely as we are fully aware of how bad this situation is), but I cannot afford the fee to file for bankruptcy as well. I can only "hope" that I am brought to court and made bankrupt too, however this second council seems cooperative about payment plans while the one that made my husband bankrupt has not transferred the debt to my name.

Thank you in advance and apologies for being so wordy.

StepChange_James

CrazyBird wrote: »

I am currently in a joint IVA with my ex-husband (we split after IVA was started). I am living in a rented room and he is in our mortgaged property. There is also a secured loan on that property that is in both our names. Is there any way I would be able to apply for BR on my own?

I would like to be able to ask my IVA company but I have no faith in them as they seem unable to even send letters to the correct place ie. I get letters for my ex. I have been told this is because I am the first named person! We also asked for a review last year as both our incomes had dropped. This was done but in January (when our annual review was due) we got sent the old information. I called them and asked for the updated information but did not hear anything so am now worried I will be in "breach" of the IVA as we haven't completed our annual review.

Where do I go from here? Please help........

Hello,

It is possible to go bankrupt if you're on an IVA but I'd really recommend you speak to your Insolvency Practitioner(IP) first for advice.

It sounds like you're not too happy with the service you've been getting through you IVA provider. If that's the case then you could make a complaint to them. If that doesn't sort things out then you could complain here: http://www.bis.gov.uk/insolvency/contact-us/IP-Complaints-Gateway.

Kind regards

James

StepChange_James

CrazyBird wrote: »

There is no equity as there is a mortgage and a secured loan (joint). There are still 4 years left to pay on the IVA. We can afford the IVA at the moment but we are at the minimum amount allowed of £100. I would like to completely seperate from my ex but can't do this while I am still paying on the secured loan. As this is a joint loan, would a BR force me to sell my share of the property?
Thanks

Hi again,

Sorry, I only noticed this second message after replying to the first one.

Bankruptcy doesn't always mean losing your property, particularly if there's no equity in it. A lot depends on the circumstnaces. Again, talking to your IVA provider should be a quick way to get more guidance on this sort of thing.

Kind regards

James

longtermplanner

greenblue wrote: »

I am hoping we can at least have some of this amount dropped

This doesn't really make sense. Unless you have enough money to pay off all the debts PLUS the costs of bankruptcy, which will be several thousand pounds possibly a lot more, then there is no point in wasting your time trying to reduce the amounts that went into the bankruptcy. You won't gain anything at all.

. Does it make sense for the full amount to go to me AND to my husband's bankruptcy at the same time?

yes. You are jointly and severally liable for the total. And anyway, it makes no difference to you how much you go bankrupt for.

This was with child benefit and tax credits included (though they are soon to go down significantly

have you pointed this out?

1. Is it true that income from child benefit and tax credits is not to be included in the disposable income? (I got the information about tax credits from a website sponsored by the Scottish Government, and we receive child tax credits in my name.)

are you in Scotland? This is important as the procedures in Scotland are very different to those in England and Wales.

2. Should that council tax debt have been counted on my husband's bankruptcy at the same time as being wholly transferred to my name?

yes

3. Any other advice you can spot that I need would be very much appreciated.

Could you post a list of your actual incomes and expenses. Also a list of what has been allowed for expenses when coming up with the figure of £75. Then we could say if it looks unreasonable and should be challenged.

StepChange_James

greenblue wrote: »

My husband was recently made bankrupt for a large council tax debt, which we actually disagree with for the most part (we were both students for the majority of the time but had a huge runaround with the council). Anyway, if I get too much into the reasons it will become far more complicated.

I am hoping we can at least have some of this amount dropped, but I am going to form my question on the basis that we will not. We also owe money to another council from a time I had a serious illness, and we do not dispute this. We were slowly paying it off, but because of the bankruptcy it has gone onto that.

My husband recently had the telephone interview with the people handling the bankruptcy and they have included the other council tax debt (the one we do not dispute), however I got a letter from that council saying that I am now the lone person responsible for that debt. Does it make sense for the full amount to go to me AND to my husband's banruptcy at the same time?

We are fairly low earners, with an annual income of approximately £23,000 including tax credits. We have one five year old child. I had read that tax credits (and in some places also child benefit) is excluded from income, but the practitioners are including this in the amount to determine disposable income. We have seen a council money advisor a number of times, and we had help to make our budget. The advisor determined we have no disposable income, but we jiggled this around and worked out we could give £30 a month. This was with child benefit and tax credits included (though they are soon to go down significantly). We don't even think this is a safe amount really without potentially getting into trouble, but we wanted to offer someting rather than the advised nothing.

The practitioner is insisting on £75 a month even though it is clear that we don't have that. I am very worried we will not be able to come up with this if something urgent comes up, such as a dental bill.

We are already as downsized as we can be. We are in contract with things such as mobile and internet, since we have only recently moved to a new (rented) home. We do not drive, we have bus pases for work but our son does not, we wear old, worn out clothing, and we do not go out often. Our budget does not allow for birthdays or holidays (Christmas, not Spain), and won't even allow for all of the basics if we have to commit to this higher amount.

My questions are:

1. Is it true that income from child benefit and tax credits is not to be included in the disposable income? (I got the information about tax credits from a website sponsored by the Scottish Government, and we receive child tax credits in my name.)
2. Should that council tax debt have been counted on my husband's bankruptcy at the same time as being wholly transferred to my name?
3. Any other advice you can spot that I need would be very much appreciated.

I do intend to see the council money advisor again, however am hoping for a second opinion due to the discrepancies we have spotted. It all feels quite wrong that my income is being included in the bankruptcy without me getting the "benefits" of the bankruptcy (I use this term loosely as we are fully aware of how bad this situation is), but I cannot afford the fee to file for bankruptcy as well. I can only "hope" that I am brought to court and made bankrupt too, however this second council seems cooperative about payment plans while the one that made my husband bankrupt has not transferred the debt to my name.

Thank you in advance and apologies for being so wordy.

Hello,

Thanks for posting.

1. I'd expect benefits to be taken into account when looking at the household income and expenditure but also for the expenses these benefits cover to also be included.

2. I'd assume that the council believe the account was in joint names. Your husband's bankruptcy would deal with his liability but would mean you'd become fully liable for the balance.

3. The £75 payment that you're being asked to pay should be based on the income and expenditure details you went over with the people dealing with the bankruptcy. I'd recommend going through those details very carefully to see what's missing or too low, as it sounds like it doesn't quite match up with the budgets you've made in the past.

I think it's a good idea to see your council money advisor, as they'll be more familiar with your case than I am and should be able to give you more definite answers to your questions.

All the best.

James

molloyj1979

My Husband sought by himself and was declared Bankrupt (Sequestration under Scottish Law, as we understand it) through Low Income Low Asset (LILA) only at the start of Feb this year. Around the same time as applying for Sequestration, He also claimed for miss-sold PPI (also in His name). We now have received an offer for a substantial amount, which works out at around 50% of the TOTAL Debt owed. We have of-course advised the Trustee - AIB. However, impatient as I am, is wondering how this will affect the Sequestration under the LILA scheme? Can anyone HELP please??? Thanks

Pashley555

Hi afraid this is going to be a bit of a long story.

In 2012 my husband and I set up a haulage company (ltd) but unfortunately this hasn't worked out and we have had to stop trading with effect end Dec 13. Fortunately I have full time as a civil servant and my husband has managed to find another driving job.

The majority of the debt within the business insolvency is being dealt with. The main problem is that to be able to get the finance for the lorry my husband acted as guarantor. The lorry has been sold but there is a £10,000 deficit which my husband is now personally liable for. We have offered to pay £1,000 of the debt in instalments but this has been rejected and they are now going to make my husband bankrupt.

My husband has already been declared bankrupt in Dec 08 which has meant that the majority of household expenses mortgage, loans, credit cards etc are in my name. This means that all my earnings go household bills with nothing left. Due to trying to keep the business going everything is maxed out. My husband's earnings go on CSA (for his first child), food shopping, child care.

My main concern is that when he is declared bankrupt again will they take into account all the household expenses in my name as well because if they see he doesn't have commitments such as mortgage, credit card etc they will assume there is more available cash than there actually is.

Hope this makes sense and any advice would be gratefully received.

kegz1975

If I go bankrupt how long from the date of bankruptcy to the date of dishcarge is it before I can begin to rebuild my life. I am not BR but in am IVA and struggling to make the payment. Also with regards to my bank account which is just for day to day living and receiving my casual wage and tax credits and child benefit....what are the chances of me keeping it going or would it be worth just getting my wages and and things paid into my partners account and my car insurance and mobile bill to be paid out of his account also until I am allowed to use my account again. just to save the hassle or would you just recommend opening another account with a bank that won't shut the account while the BR goes through. If i choose this option or I am forced into it.