Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

alexia123

Hi,
I am considering doing a DRO. I have recently seperated from my partner and they have left me with lots of debts between us. I am now living in the house alone and will apply as a single person. My partner still has a housing / council tax benefit claim at this address. Will this affect the application? I obviously do not want anything to jeopardise my chance of being accepted.
Also if someone was living at the same address claiming JSA, Would this also affect me, as I would be making the application as living alone.

Any information would be greatly appreciated.

StepChange_James

alexia123 wrote: »

Hi,
I am considering doing a DRO. I have recently seperated from my partner and they have left me with lots of debts between us. I am now living in the house alone and will apply as a single person. My partner still has a housing / council tax benefit claim at this address. Will this affect the application? I obviously do not want anything to jeopardise my chance of being accepted.
Also if someone was living at the same address claiming JSA, Would this also affect me, as I would be making the application as living alone.

Any information would be greatly appreciated.

Hi,

Your DRO application wouldn't be affected by the things you’ve mentioned. As it’s an application in your name only your ex-partner’s current situation wouldn't affect it.

Although, it does seem as though you need some benefit advice to get you situation clear. It’s best to get that sorted first before we look at your debts.

For confidential online benefits check use our free tool here: http://www.stepchange.org/Benefits-Check

Or you can get in touch (http://www.stepchange.org/Contactus.aspx) and our welfare benefits team can check for you.

Thanks,
James

kingdymond

My husband and I started an iva in November 2010,we paid this as required even though was still a struggle up until september 2012 when my husband was taken ill.He has been on statutory sick pay from Septembe so the iva gave us a payment break which has now ended.We are still not able to pay as he is still off work and could be for another 6-18 months,there is also achance may never be able to return.our iva has said we will need to fail our iva and make ourselves bankrupt which we can not afford as costs £700.the c.a.b told me about a debt relief order because with what we have paid takes our debt to below 15,000.this is not the case as because although we have paid £12,000 into iva our creditors have only received £6,500.please any advice would be gratefully received.
many thanks

alexia123

Thanks, We also owe Council Tax that is in both our names.
Can I include this in the DRO? And would this affect their claim for Council Tax benefit. Also if they are still temporarily living with me but I make the application as living alone could my application be refused?

alexia123

Thanks, We also owe Council Tax that is in both our names.
Can I include this in the DRO? And would this affect their claim for Council Tax benefit. Also if they are still temporarily living with me but I make the application as living alone could my application be refused?

Former_StepChange_Rachel

kingdymond wrote: »

My husband and I started an iva in November 2010,we paid this as required even though was still a struggle up until september 2012 when my husband was taken ill.He has been on statutory sick pay from Septembe so the iva gave us a payment break which has now ended.We are still not able to pay as he is still off work and could be for another 6-18 months,there is also achance may never be able to return.our iva has said we will need to fail our iva and make ourselves bankrupt which we can not afford as costs £700.the c.a.b told me about a debt relief order because with what we have paid takes our debt to below 15,000.this is not the case as because although we have paid £12,000 into iva our creditors have only received £6,500.please any advice would be gratefully received.
many thanks

Hi there,

This is a tough one because legally, we are not allowed to advise you while you’re still technically in the IVA as you are currently legally bound to your insolvency practitioner. Once the IVA comes to an end, we would then be able to have a look at your budget and see what other kind of long term options would be available.

I would suggest in the meantime that you get in touch with the Insolvency Service. They are the only people apart from your IP that can give you guidance while still in your IVA. You can ring them on 0845 602 9848 and they’re open 8am – 5pm Mon - Fri. You can fill out an enquiry form here and the Insolvency Service will be back in touch, but please be aware that this can take up to 15 working days.

If your IVA does come to an end, please let us know as we’ll gladly look at what else can be done. You can either prepare a budget with us by calling our Helpline or using our anonymous advice tool Debt Remedy.

Best regards

Rachel

Former_StepChange_Rachel

alexia123 wrote: »

Thanks, We also owe Council Tax that is in both our names.
Can I include this in the DRO? And would this affect their claim for Council Tax benefit. Also if they are still temporarily living with me but I make the application as living alone could my application be refused?

Hiya there,

Council tax arrears can be included in a DRO application and shouldn’t have any bearing on a claim for council tax benefit in the future. If the arrears in joint names then the full debt will then be payable by the other person named on the bill.

I’m not entirely sure if your second question is about your DRO application or your council tax benefit but either way it is best to be clear about your situation and explain your circumstances even if things are a little bit complicated at the moment.

Best regards

Rachel

emylou17

I am currently in a joint DMP with my husband and finding it very difficult to manage due to the lack of household income against increasing nursery fees and bills etc. The debt plan I have currently includes all joint debts along with individual debts such as credit cards. My question is can one of us go bankrupt without the other?

StepChange_James

emylou17 wrote: »

I am currently in a joint DMP with my husband and finding it very difficult to manage due to the lack of household income against increasing nursery fees and bills etc. The debt plan I have currently includes all joint debts along with individual debts such as credit cards. My question is can one of us go bankrupt without the other?

Hi Emylou,

Bankruptcy is done on an individual basis, so there's no problem with one half of a couple going bankrupt and the other not. The joint debts would become the full responsibility of the person who didn't go bankrupt but the debts in just your name would be written off.

There's lots to consider before going bankrupt, so I'd suggest getting some advice from us before applying. If your payment plan is with us then just give us a call on the number you usually use. If it isn't then you can still get bankruptcy advice from us by either using our online advice tool, Debt Remedy (http://www.stepchange.org/msehelp) or by giving us a call (http://www.stepchange.org/Contactus.aspx).

Hope this helps.

James

StepChange_James

knmnhsun wrote: »

my son has a couple of loans and lloyds let him have an overdraft of £1500, which he has gone over and they charged £120 in fees last month alone, as he hasnt got a job now and he owes around £8000 we were finding out about going bankrupt, when he was working part time for an agency he was told to declare himself bankrupt, now he is out of work they now tell him not to, on the online form from stepchange, we have all the forms to fill in but dont really know what happens, he has work tools and a moped will these be taken of him thanks marie

Hi Marie,

Thanks for getting in touch.

If your son goes bankrupt his details will be passed to the Official Receiver's (OR) office, who will look into assets. They'll consider the value of the moped and decide if it should be sold or not. If it's got a fairly low second hand value then there's a good chance he could keep it.

The work tools is a strange one. If he was working then he'd be very likely to be able to keep them. With him currently being out of work it's a little more uncertain. Here's the guidance I found on this:

if the bankrupt is unemployed and unlikely to gain future employment, the assets, which could have been considered to be exempt property, will not be necessary to the bankrupt in his/her employment and should be realised by the trustee.

So if the OR thinks that he's unlikely to need these tools in the future then they're likely to be sold, if it's likely they're needed for future work then they should be safe.

If Debt Remedy didn't recommend bankruptcy I'd suggest giving us a call before submitting an application. It may just be the numbers need tweaking but it could be that it's not the best option for him. If you call the number in the paperwork an advisor will be able to look at things for you.

We'll also be able to help you prepare for the bankrutpcy process if it's the best option. We've an article about how to fill out the bankrutpcy forms here: http://moneyaware.co.uk/template-letters-court-forms/how-do-i-fill-in-my-bankruptcy-forms/ but I'd suggest speaking to us before actually going through with it.

Kind regards

James