Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

philnicandevan

mattluisturner wrote: »

I should say that we are in Scotland - I'm not sure if the rules are significantly different here.

Rules are a fair bit different yes...

have a look here

http://www.stepchange.org/DebtadviceinScotland.aspx

StepChange_James

mattluisturner wrote: »

Hi,

My wife has some financial problems and we're not sure if she may need to declare herself bankrupt in the near future.

We're not sure of the implications of this and would really appreciate some advice.

She was in a car accident last year and is being chased by the insurance company for more than £10 000. She will be taken to court next month and we are not optimistic about the outcome.

She has been on maternity leave for the past year, and will be returning to work for 13 weeks, before stopping again to look after our young son.

She has credit card debts of £2500 and her bank account is overdrawn.

We have bought our house, but need to pay back my parents for the deposit and have paid off very little of the loan - so essentially there is no equity in the house.

I work and earn around £45 000 per year, but this money is spent paying the mortgage, a loan and supporting 4 dependents.

My questions are:
- if she declares herself bankrupt, will the house be sold?
- Am I liable for my wife's debts? Does my income make any difference?
- what other options do we have?

Many thanks for your help in advance

Hi there,

Apologies in the delay in getting back to you. I'll answer each question separately.

- if she declares herself bankrupt, will the house be sold?
It's possible that the house could be affected. A lot depends on the situation. Also you mentioned a loan from family for the deposit. If this debt isn't secured against the property then it may be that there is equity available.

- Am I liable for my wife's debts? Does my income make any difference?
If you're not named on any of these debts as a guarantor or a joint holder then you shouldn't be made responsible for them. This is true regardless of your income.

- what other options do we have?
Thanks to philnicandevan for posting a link to our Debt Advice in Scotland page of our site. There's a list of potential debt solutions here: http://www.stepchange.org/DebtadviceinScotland.aspx.

The right solution depends on the circumstances, so it's hard to say without knowing more. I'd recommend she contacts us for more in depth advice by giving us a call. Here's the contact details: http://www.stepchange.org/Contactus.aspx.

Kind regards

James

yankee77

Hi

I am preparing a DRO with StepChange. I am 14 months into a two year Virgin Mobile Contract £33 a month and I have now been thrown off my DLA Benefits and would like to know can I cancel this contract and ask them to send me balance owing then put it onto my DRO?

It is just that I read on VMobile forum that if went to court the person would lose, though it never mentioned it from DRO angle.

I also have virgin media tv broadband phone on low package. Will this affect that account or will I be able to keep it if virgin mobile put on debt relief order?

I really needed my PIP Benefits and medical assessor has basically told all lies in their report. So companies stand to lose customers now because of benefit changes.

Can someone please advise me about the contract with Virgin Mobile.

Thank You

lotte8

Hi need some advice for a family friend.
He got made bankrupt 17 years ago with his wife and they lost their house. Since then they have just got on with life. A few weeks ago he got a call out of the blue asking him if he wanted to start thinking about what he wanted to do with his pension. He had forgot all about it. It is part secured. the pension company did say that insolvency wanted to be kept informed and would he give his permission for them to speak to them. He refused as he wanted to try to get his head around having this pension and what it would mean regarding his debts.
His debts are made up of secure (house) and unsecure credit cards and overdrafts/loans.
He have never got a certificate of being discharged, but his wife did many moons ago.
What should they do to return the most money from their pension?
He has contacted insolvency and they are sending him a list of who is claiming against his estate and for how much, whilst stressing he does not acknowledge the debts.
Would he need to write to each individual creditor for his unsecured debt and statuate bar the debts and then send this to the insolvency or would the certificate of discharge be enough for insolvency to not pay out from the pension to the unsecured debt?

Finally would the secured debt need paying back after all this time. I know there is a voluntary code for 6 and 12 years on interest and capital but this came into effect after they went bankrupt.

Thank you.

doorstep54

I would like to ask I'm thinking of going bankrupt and worried about my bank account closing as I have my wages paid in there its only basic account is the close it I will I get my wages?

BCH_2

Hi forum, the time has come for me to consider bankruptcy which is not a decision I've reached after a long time of trying to go debt free.

My main worry is that I will have to find over £700 to do it and I'm really worried that I might be refused bankruptcy.

I have so many questions that I just can't seem to find answers to. Can someone or a few people help with this?

I have debts totalling £16,000 on card, loans and overdrafts. Only one of these debts is joint (my partner won't go bankrupt so we will need to repay this as normal after bankruptcy)

I have a DMP with SC which has been repaying my debts for 18 months. At this pace it will take 11 years.

In my current situation we can't pay any more. Life is just too expensive and I don't want to be forced live like a hermit living in a bedsit. I know there is some people who will hate on me for saying this. I got into this mess and I can't see a way out. I have struggled in the past with my mental health and a major cause was my finances.

What is the likelihood of me being accepted for bankruptcy?
Does the judge take into account household finances even if my partner is not applying.
If I am not accepted can the judge force me into an alternative?
Do I get any money back if I am not accepted?

I just want a better quality of life, I have this constant weight on me and I simply want a fresh start. I know it's my fault and I do expect to come into a lot of hate over this post but please be kind. I've made mistakes and I just want a fresh start

Thank you.

StepChange_Jen

yankee77 wrote: »

Hi

I am preparing a DRO with StepChange. I am 14 months into a two year Virgin Mobile Contract £33 a month and I have now been thrown off my DLA Benefits and would like to know can I cancel this contract and ask them to send me balance owing then put it onto my DRO?

It is just that I read on VMobile forum that if went to court the person would lose, though it never mentioned it from DRO angle.

I also have virgin media tv broadband phone on low package. Will this affect that account or will I be able to keep it if virgin mobile put on debt relief order?

I really needed my PIP Benefits and medical assessor has basically told all lies in their report. So companies stand to lose customers now because of benefit changes.

Can someone please advise me about the contract with Virgin Mobile.

Thank You

Hi there,

Thanks for posting.

It’s best to get in touch with our DRO team about this.

The answer to your questions depends on a few different things
and we’d need more information from you to be able to help.

You can find out how to get in touch with us here:

http://www.stepchange.org/Existingclients/DROclients.aspx

I hope this helps,

Jen

StepChange_Jen

doorstep54 wrote: »

I would like to ask I'm thinking of going bankrupt and worried about my bank account closing as I have my wages paid in there its only basic account is the close it I will I get my wages?

Hi there,

Firstly, if you are thinking of going bankrupt we’d suggest getting some debt advice first, if you haven’t already. Bankruptcy is a big step and it could be that there are other debt solutions more suited to your situation.

If you’d like to get free debt advice, this is something we can help with and you can find out how to get in touch with us here:
http://www.stepchange.org/Contactus.aspx

Bankruptcy can affect your bank account, depending on the type of account you have. However there are certain accounts that you should be able to keep during bankruptcy. You can read more about these here and there’s also more information about the impact bankruptcy can have on your account:

http://www.stepchange.org/Existingclients/Bankruptcyclients/Bankaccounts.aspx

I hope this helps,

Jen

StepChange_Jen

lotte8 wrote: »

Hi need some advice for a family friend.
He got made bankrupt 17 years ago with his wife and they lost their house. Since then they have just got on with life. A few weeks ago he got a call out of the blue asking him if he wanted to start thinking about what he wanted to do with his pension. He had forgot all about it. It is part secured. the pension company did say that insolvency wanted to be kept informed and would he give his permission for them to speak to them. He refused as he wanted to try to get his head around having this pension and what it would mean regarding his debts.
His debts are made up of secure (house) and unsecure credit cards and overdrafts/loans.
He have never got a certificate of being discharged, but his wife did many moons ago.
What should they do to return the most money from their pension?
He has contacted insolvency and they are sending him a list of who is claiming against his estate and for how much, whilst stressing he does not acknowledge the debts.
Would he need to write to each individual creditor for his unsecured debt and statuate bar the debts and then send this to the insolvency or would the certificate of discharge be enough for insolvency to not pay out from the pension to the unsecured debt?

Finally would the secured debt need paying back after all this time. I know there is a voluntary code for 6 and 12 years on interest and capital but this came into effect after they went bankrupt.

Thank you.

Hi there,

Thanks for contacting us.

Without knowing the full details of the situation, it will be hard to go into a lot of detail on this or provide any specific advice. However, I’ll try to answer the key questions you have, and recommend the best people to talk with.

If the bankruptcy was 17 years ago, any pension that your friend had would be ‘vested’ in the official receiver (OR). This means their pensions savings at the point they declared bankruptcy belong to the OR.

When the pension becomes available, this would pass to the OR and not to your friend. It also doesn’t matter whether your friend gave permission for the pension company to contact the OR or not, the pension stopped belonging to your friend at the point of their bankruptcy.

Any pension savings built up after the bankruptcy most likely still belong to your friend, but there could be issues if they carried on paying into a pension fund that the OR had vested in. In this situation we’d recommend seeking specialist pensions advice.
It’s a long while ago, but this should have been explained at the time of the bankruptcy. Your friend can still contact the OR who they deal with for more advice.

Importantly, creditors that your friend owed at the time of their bankruptcy are entitled to a share of the pension, but nothing else. They’re not entitled to any other money as your friend is discharged from the bankruptcy now and owes them nothing else.

Because of this, the Limitation Act doesn’t have any bearing on this situation; neither does the voluntary code for secured lending.
If your friend needs more help, we’d recommend that they speak to the Insolvency Service who have a specialist team that can discuss this with them and confirm the situation.

I hope this helps,

Jen

StepChange_Jen

BCH wrote: »

Hi forum, the time has come for me to consider bankruptcy which is not a decision I've reached after a long time of trying to go debt free.

My main worry is that I will have to find over £700 to do it and I'm really worried that I might be refused bankruptcy.

I have so many questions that I just can't seem to find answers to. Can someone or a few people help with this?

I have debts totalling £16,000 on card, loans and overdrafts. Only one of these debts is joint (my partner won't go bankrupt so we will need to repay this as normal after bankruptcy)

I have a DMP with SC which has been repaying my debts for 18 months. At this pace it will take 11 years.

In my current situation we can't pay any more. Life is just too expensive and I don't want to be forced live like a hermit living in a bedsit. I know there is some people who will hate on me for saying this. I got into this mess and I can't see a way out. I have struggled in the past with my mental health and a major cause was my finances.

What is the likelihood of me being accepted for bankruptcy?
Does the judge take into account household finances even if my partner is not applying.
If I am not accepted can the judge force me into an alternative?
Do I get any money back if I am not accepted?

I just want a better quality of life, I have this constant weight on me and I simply want a fresh start. I know it's my fault and I do expect to come into a lot of hate over this post but please be kind. I've made mistakes and I just want a fresh start

Thank you.

Hi there,

I’m sorry to hear you’re finding things hard at the moment.

We wouldn’t be able to comment of whether you’d be suitable for bankruptcy without knowing your full situation.

If you’re concerned about the debt management plan you’re on at the moment and would like to know if any other solutions are available for you, I’d suggest getting in touch with our advisors to talk through your options. We’ll be able to help you work out if there are other options. 11 years is a long time to spend repaying debts, so it’s certainly worth exploring alternatives, we can help you with this.

If we look at your situation and recommend bankruptcy then it’s very likely that an application to the court would be accepted. I’ve heard of situations where people have gone bankrupt and then when their situation has been looked at more closely it’s been decided to do an IVA instead, but this is rare and getting advice first should stop this from happening.

You mentioned that you have a joint debt with your partner. All of your unsecured debts would be included in the bankruptcy and you wouldn’t be able to exclude this one. As the debt would be included, your partner would become liable for the remaining amount of debt.

I hope this helps,

Jen