Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

greenblue_2

longtermplanner wrote: »

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.

This is partly out of principle because I am confident the debt is less than half of what they say, and also because I am concerned that soon I will get a bill for the entire amount.

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

But what I am worried about, is that his bankruptcy has that amount, and I have a bill for the same amount. In theory doesn't that mean it will get paid twice (though my husband will definitely not be paying the full amount through his bankruptcy). It just seems that it should not be included on his bankruptcy now because they have made it so it is my debt only, and not his. It calls me the lone (something I can't remember because I am at work and don't have the bill here).

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.

I will do this as soon as possible. It is difficult from home and I don't have everything here. I have also been waiting for confirmation from the trustees but we haven't heard from them yet since the telephone interview.

The information online from various websites isn't very clear and is sometimes contradictory. I have looked at a few sites from iCAS to others with the Scottish Goverment seal on them, and I still don't feel informed. I used to work for a bank, too! I have read tax credits are looked at for income when determining if monthly payments should be made, but not counted as part of the money available to repay. I don't even know if I can make sense of that.

Anyway thank you for the answers and I hope I will be able to post the income/expenditure soon.

System

molloyj1979 wrote: »

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

Hi molloyj1979,

You've done the right thing by letting the Trustee know about the miss-sold PPI money. I can’t say with any certainty how to LILA will be affected. What will happen is that the money will be paid to the creditors. They may look at the possibility of settlement figures to pay the debt off or the Trustee will distribute the money pro-rata to each creditor.

I know it can be frustrating but without basing an answer on speculation you are best to wait for their response.

Thanks,
Jess

System

Pashley555 wrote: »

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.

Hi Pashley555,

If you’re husband has received a Statutory Demand you should give us a call – we have a dedicated bankruptcy team who can give him specialist advice.

The statement of affairs would be a joint income as that is your living situation, then they would look at his income and ability to pay debts he is liable for.

Give us a call and we can refer you to our bankruptcy team for some free advice.

Take care,
Jess

System

kegz1975 wrote: »

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.

Hi kegz1975,

If you are on an IVA you should speak to your Insolvency Practitioner before making any decision to go bankrupt – they are duty bound to provide you with advice about other options open to you.

From the date of discharge the bankruptcy will stay on your credit file for 6 years. If you went bankrupt your bank accounts can be frozen though you can set up a basic account for banking.

Don’t move your bank account or make any decisions before speaking to your IP. You are paying them for a whole service which includes advice.

Thanks,
Jess

Neil_948

kegz1975 wrote: »

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.

As far as I was believed in speaking to people who had gone through bankruptcy you will have to fore go your mobile and any other credit agreements that you have as under the law someone who is insolvent can not have credit nor can they apply for credit for the amount of time specified by the courts.

tigerfeet2006

StepChange_Jess wrote: »

Hi kegz1975,

If you are on an IVA you should speak to your Insolvency Practitioner before making any decision to go bankrupt – they are duty bound to provide you with advice about other options open to you.

From the date of discharge the bankruptcy will stay on your credit file for 6 years. If you went bankrupt your bank accounts can be frozen though you can set up a basic account for banking.

Don’t move your bank account or make any decisions before speaking to your IP. You are paying them for a whole service which includes advice.

Thanks,
Jess

Sorry to correct you Jess but it is 6 years from the date of BR that it falls off your credit file.

Kegz, if you are advised BR is and option then look at getting a Barclays basic or a Co-op Cashminder account. Check out the other stickies on the board for info.

People start rebuilding their credit worthyness with in months of getting discharged. Read the boards and get jenned up on BR as much as you can, so you know what you are letting yourself in for.

tigerfeet2006

Neil_948 wrote: »

As far as I was believed in speaking to people who had gone through bankruptcy you will have to fore go your mobile and any other credit agreements that you have as under the law someone who is insolvent can not have credit nor can they apply for credit for the amount of time specified by the courts.

Not true at all. Mobiles etc. are perfectly possible in BR.

Mmusic

Hi guys,

Am after some advice, does anyone know what happens if you receive an inflationary pay rise during an IPA? do you have to declare in and hand over the extra income each month or are you allowed to keep it to cover the increased cost of living each month? All my bills apart from council tax and rent have recently gone up and they're all starting to chip away at what i have left to live on each month.

Can anyone help?

luvchocolate

any changes must be reported to your or, we signed to agree to that,they may send you another s.o.e to complete, its also worth noting tax allowances will rise in April so we will be a little better off so that also will need mentioning, last year when this happened I increased my d.d for energy which had gone up my trustee was fine with that.
Always let them know.

alastairq

as under the law someone who is insolvent can not have credit nor can they apply for credit for the amount of time specified by the courts.

This is incorrect for a BAnkruptcy in the UK.

Under UK BAnkruptcy regulations, an Undischarged BAnkrupt is perfectly entitled to obtain credit.

Whilst Undischarged, if a Bankrupt seeks credit in excess of £500, they are obliged by Regulation to inform the potential creditor of the BAnkruptcy.

Once Discharged, no such regulation applies.

Any 'restriction' stems not from the OR or the LAw, but from the willingness of a potential creditor to allow credit.

Regarding phone contracts?

There are a couple of issues that can affect them.

[a] will the OR agree to allow the payment of the contract on the SOA?

& ...will the phone contractor wish to continue the contract after the BR petition?

If [a] is not agreed with the OR, but , the phone company are happy to continue, there is nothing to prevent the Bankrupt from continuing the contract, but it will need to be funded from elsewhere within the SOA.