Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

dmcw

Hi

Hope someone can advise as unable to get free post bankruptcy advice. Ex 3 years finishes in June 15 and my 3 years finishes in October 17. Have two children age 10 and 7. Mortgage currently 77 and value online 88. Will we be forced to sell.

StepChange_James

dmcw wrote: »

Hi

Hope someone can advise as unable to get free post bankruptcy advice. Ex 3 years finishes in June 15 and my 3 years finishes in October 17. Have two children age 10 and 7. Mortgage currently 77 and value online 88. Will we be forced to sell.

Hi there,

If there's equity in a property you own and you've gone bankrupt then it's typical that the trustee in bankruptcy, usually the Official Receiver, will try to release that equity to pay towards the debts included in the bankruptcy (after deducting their own fees).

Obviously I don't know all the details of your situation, so I can't say for sure this would happen to you. I'd recommend talking to your Official Receiver's office and checking with them. Alternatively, you could speak with the Insolvency Service: https://www.gov.uk/the-insolvency-service, they won't know the specifics of your case either but they should be able to give you information on what would typically happen in a situation like this.

Kind regards

James

dmcw

Thanks for your reply. I have spoken to insolvency service who refer me to both bankruptcy official receivers and I just repeatedly am told that I have to wait three years for husbands bankruptcy and then again the same for mine. I can't get an estimate even though I have paid for projections on my mortgage for the end of my three year term. Feel between a rock and a hard place.

Chilly_Breeze

Hi folks, I need some help here.

I'll give a bit of a background here before I ask my specific questions.

Basically, I built up a fair amount of debt a few years ago (it's less than £20k, around £17k off the top of my head) as I was working a stable office job at Northern Rock (Ha!) and I could afford all of my repayments without trouble. I then took voluntary redundancy and moved away to Canada, where I lived for two years. My problem there was that I ran out of money and was not earning enough to make any repayments (I was literally scraping by, pay cheque to pay cheque) so I stupidly just stopped paying and buried my head in the sand. I'm now back in the UK, unemployed, looking for work and trying to figure out what to do about all this debt.

After having lived abroad, I know that I just can't live and be happy in this country anymore, so I want to move on with my life and start making progress towards what I now have identified as what I want to do. My problem is, however that there is no way I can get a job here that will pay me enough to be able to pay off this debt in a reasonable time, and I am terrified that it's going to completely derail my life and get me stuck here again, miserable for years while I'm struggling with this debt.

Ideally, I would rather pay off the debt, but I want to move abroad to Australia or New Zealand to live and work on permanent residency there, and pay off the debt from there, as after my experience in Canada I know I will be able to get a better job out there than here and once I'm there (earning much higher wages than I earned in Canada), I will be able to make regular payments on my debt and still live the life that I want to.

I have been in contact with Citizens Advice, and they mentioned a couple of options, including possible bankruptcy but have recommended I hold off on deciding anything until I have a job, so I want to ask for some advice from here if I can.

Basically, my situation is that if I come up with a repayment agreement, it's going to be impossible for me to put any money aside for savings, and so, impossible for me to get the money to leave the country so I want to know, is it possible to declare myself bankrupt (I have no assets of any kind, or any savings at all), based on my current situation, then move abroad, find a better job, then start to pay off some of the debt from over there? Or will I be forced to stay in the UK while I'm bankrupt?

I know that if I end up stuck in the UK, I will be severely depressed, just as I was before I left, and I am genuinely afraid of this outcome. I have no useful qualifications that will get me any kind of meaningful career here so I know I would be facing years and years of working a job that I hate, in a place that makes me miserable. I have been through a completely life changing experience that has shown me what I want to do with my life, but I'm completely terrified that it's all going to be lost because of stupid past decisions.

robert542

Hi,

I was wondering if I could have some advice from those who know. I am currently considering bankruptcy and have a few questions about how bankruptcy would affect my current situation.

I live with my partner in her home (she has a sole mortgage). We each pay 50% of the total household expenditure, including household bills and her mortgage. I pay half of our total expenditure into an account in her name which we use solely for bills each month.

- How would I go about filling in the expenditure form? Can I say that we each pay 50% of all household bills and will continue to do this? Or can they insist that she pays more as they're in her name?

- My partner (soon to be wife) earns more than I do and has more 'disposable' income. Can they insist that she pays a higher percentage than me towards our household bills due to this?

- We are not financially linked at all - no joint accounts, joint mortgages or any other joint credit. However, we took out a loan this year (in her name, as my credit history is bad and I am not eligible for further credit) to pay for our wedding. Obviously, we understand that as this is in her name, this would not be included in my bankruptcy and we will continue paying it. I want to be able to contribute my 50% of this loan as it was for our wedding. Would I be able to list this as one of our joint household expenses that we each pay 50% of? Or would they insist that this was solely my partner's responsibility because it's in her name?

- When my partner purchased our current home, she borrowed money from a family member as part of the deposit. We have an arrangement with her relative and pay a set amount back each month via standing order. This also currently comes out of the account in her name which we use for joint household bills. As I live in the property and it is our home, I pay 50% of this money back to her relative also. What would we do in this situation? Would they say that this is at the expense of my creditors and that she should pay 100% of this from her income?

I am concerned that my partner will be left paying a lot of our joint bills alone which will leave her with very little - no disposable income due to my debts which were accumulated prior to our relationship.

Thank you for reading - I have been been reading a lot about bankruptcy online and have made appointments to get free debt advice to make sure that it is the right thing for my situation, but was just wondering if I could have some initial information about the issues above?

StepChange_Jen

Chilly_Breeze wrote: »

Hi folks, I need some help here.

I'll give a bit of a background here before I ask my specific questions.

Basically, I built up a fair amount of debt a few years ago (it's less than £20k, around £17k off the top of my head) as I was working a stable office job at Northern Rock (Ha!) and I could afford all of my repayments without trouble. I then took voluntary redundancy and moved away to Canada, where I lived for two years. My problem there was that I ran out of money and was not earning enough to make any repayments (I was literally scraping by, pay cheque to pay cheque) so I stupidly just stopped paying and buried my head in the sand. I'm now back in the UK, unemployed, looking for work and trying to figure out what to do about all this debt.

After having lived abroad, I know that I just can't live and be happy in this country anymore, so I want to move on with my life and start making progress towards what I now have identified as what I want to do. My problem is, however that there is no way I can get a job here that will pay me enough to be able to pay off this debt in a reasonable time, and I am terrified that it's going to completely derail my life and get me stuck here again, miserable for years while I'm struggling with this debt.

Ideally, I would rather pay off the debt, but I want to move abroad to Australia or New Zealand to live and work on permanent residency there, and pay off the debt from there, as after my experience in Canada I know I will be able to get a better job out there than here and once I'm there (earning much higher wages than I earned in Canada), I will be able to make regular payments on my debt and still live the life that I want to.

I have been in contact with Citizens Advice, and they mentioned a couple of options, including possible bankruptcy but have recommended I hold off on deciding anything until I have a job, so I want to ask for some advice from here if I can.

Basically, my situation is that if I come up with a repayment agreement, it's going to be impossible for me to put any money aside for savings, and so, impossible for me to get the money to leave the country so I want to know, is it possible to declare myself bankrupt (I have no assets of any kind, or any savings at all), based on my current situation, then move abroad, find a better job, then start to pay off some of the debt from over there? Or will I be forced to stay in the UK while I'm bankrupt?

I know that if I end up stuck in the UK, I will be severely depressed, just as I was before I left, and I am genuinely afraid of this outcome. I have no useful qualifications that will get me any kind of meaningful career here so I know I would be facing years and years of working a job that I hate, in a place that makes me miserable. I have been through a completely life changing experience that has shown me what I want to do with my life, but I'm completely terrified that it's all going to be lost because of stupid past decisions.

Hi there, thank you for posting.

I’m sorry to hear of your situation and can appreciate the difficulty you’ve faced in weighing up the various options you have in terms of possibly relocating to another country and how your debt may factor into this.

It sounds like you have been looking into a number of debt solutions and have spent a lot of time trying to figure out what might be right for you. If you were to go bankrupt and planned on leaving the country, you would need to let your Official Receiver who administers your bankruptcy know. You can find out more about the benefits and risks of bankruptcy here: http://www.stepchange.org/Howwecanhelpyou/Bankruptcy.aspx

People who wish to go bankrupt but have little to no assets and are on low income may find that a debt relief order (DRO) is a suitable alternative. You can learn more about DROs on our website: http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx

We can help you explore any debt solutions that may be beneficial for you, but the only way we can do this is by taking an in-depth look at your budget. Before we can give you the debt advice you need, we have to ensure that your living costs and priority household bills are covered each month. The advice we give is free, confidential and non-judgmental. We want to help you put your debt behind you and move on with your life, and this is why we put so much emphasis on making sure what we recommend as a debt solution is the right fit for your circumstances.

Our online advice tool Debt Remedy can help you put together your own personal action plan in around 20 minutes: http://www.stepchange.org/debtremedy.aspx

Alternatively, we have a team of friendly debt advisors who can go through your budget with you over the telephone and talk through your options with you. Visit our contact us page to find out how to get in touch: http://www.stepchange.org/Contactus.aspx

Hope this helps,

Kind regards

Jen

StepChange_Jen

robert542 wrote: »

Hi,

I was wondering if I could have some advice from those who know. I am currently considering bankruptcy and have a few questions about how bankruptcy would affect my current situation.

I live with my partner in her home (she has a sole mortgage). We each pay 50% of the total household expenditure, including household bills and her mortgage. I pay half of our total expenditure into an account in her name which we use solely for bills each month.

- How would I go about filling in the expenditure form? Can I say that we each pay 50% of all household bills and will continue to do this? Or can they insist that she pays more as they're in her name?

- My partner (soon to be wife) earns more than I do and has more 'disposable' income. Can they insist that she pays a higher percentage than me towards our household bills due to this?

- We are not financially linked at all - no joint accounts, joint mortgages or any other joint credit. However, we took out a loan this year (in her name, as my credit history is bad and I am not eligible for further credit) to pay for our wedding. Obviously, we understand that as this is in her name, this would not be included in my bankruptcy and we will continue paying it. I want to be able to contribute my 50% of this loan as it was for our wedding. Would I be able to list this as one of our joint household expenses that we each pay 50% of? Or would they insist that this was solely my partner's responsibility because it's in her name?

- When my partner purchased our current home, she borrowed money from a family member as part of the deposit. We have an arrangement with her relative and pay a set amount back each month via standing order. This also currently comes out of the account in her name which we use for joint household bills. As I live in the property and it is our home, I pay 50% of this money back to her relative also. What would we do in this situation? Would they say that this is at the expense of my creditors and that she should pay 100% of this from her income?

I am concerned that my partner will be left paying a lot of our joint bills alone which will leave her with very little - no disposable income due to my debts which were accumulated prior to our relationship.

Thank you for reading - I have been been reading a lot about bankruptcy online and have made appointments to get free debt advice to make sure that it is the right thing for my situation, but was just wondering if I could have some initial information about the issues above?

Hi there,

Thanks for posting.

It’s good to hear you’re thinking about the options available to help you deal with your debt.

We’d always encourage people to get free debt advice before deciding on a debt solution, as in some cases it could be that there’s another solution more suited to your situation. It’s good to hear you’ve got an appointment for some free debt advice set up.

I’ll answer your questions in the same order you’ve written them:

1. On the expenditure form you should include the amounts you pay towards the household bills. If your partner contributes to the household bills, you can make a note of this on the additional information page. It’s always best to be completely honest when filling out bankruptcy forms and it’s likely you’ll be able to continue to pay your half of the payments towards the bills.

2. The official receiver assigned to deal with a bankruptcy wouldn’t usually request that someone else in the household pays more towards your essential bills. They need to get an accurate view of your financial situation, so they shouldn’t take into account someone else’s income. However, it’s important to be honest about what you do pay towards the bills.

3. It’s unlikely the official receiver will allow you to continue to make payments towards your partner’s loan. The money being paid towards the loan could be seen as money that could be paid to the creditors that are included in your bankruptcy.

4. Again, it’s unlikely you’ll be able to continue paying the debt to the family member.

It’s important to note that if you have spare income left over after your essential payments (mortgage, bills etc.) have been covered, then the official receiver may arrange for you to pay this towards your debts in what’s known as an ‘income payment arrangement’. This usually lasts for three years.

Finally, even though the home is in your partner’s name, if you’ve been making payments towards it for a while you could have ‘beneficial interest’ in the property. Due to this, your home may be considered an asset and could be included in the bankruptcy. Although, without knowing more about this situation, it’d be hard to say whether that will happen.

You’ve already mentioned that you’ve got a debt advice appointment set up. If you’d like to get some help before then we have an online debt advice tool called Debt Remedy.

You can find it here:

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

Debt Remedy should be able to give you an idea if bankruptcy is the right solution for you. It’ll also let you know of any other solutions that may be suitable and how to move forward with them.

I hope this has helped,

Jen

Max0102

Hi,

I was made bankrupt on 3rd Nov. It's been 4 working days but I have not received the phone call yet from the Official Receiver.

I think they were supposed to call within 2 working days after the Bankruptcy Order is made. Should I be worried? Shall I just wait or give them a call instead?

I am single, renting privately £1200/month but also have a lodger paying in cash to me £400/month.
I have already mentioned this on SOA. I 've been at the same address since 2011.

After being made redundant and getting separated from the girlfriend, I had to take in a lodger to cover the rent since Universal Credit, 1,183/month which I have been claiming for the last 2 months does not even pay the rent.

The Tenancy Agreement is solely on my name and legally I am not allowed to sublet (although the landlord actually knows I have a lodger but since the rent has always been paid fully on time and the property has been looked after well, he does not mind at the moment) so there is no contract/agreement between me and the lodger or the lodger and the landlord.

Lodger pays only 400/month for his room . All the other expenses for the house are on me.

How will the OR see this situation when calculating If I ll get an IPA or not?

Can the OR ask me to find a more affordable property to rent which is almost impossible in my position?

Will the OR get in touch with the landlord or the lodger?. I do not want them to know that I am bankrupt as this would most definitely lead the landlord asking me to vacate the property.

Thanks,

Former_StepChange_Rachel

Max0102 wrote: »

Hi,

I was made bankrupt on 3rd Nov. It's been 4 working days but I have not received the phone call yet from the Official Receiver.

I think they were supposed to call within 2 working days after the Bankruptcy Order is made. Should I be worried? Shall I just wait or give them a call instead?

I am single, renting privately £1200/month but also have a lodger paying in cash to me £400/month.
I have already mentioned this on SOA. I 've been at the same address since 2011.

After being made redundant and getting separated from the girlfriend, I had to take in a lodger to cover the rent since Universal Credit, 1,183/month which I have been claiming for the last 2 months does not even pay the rent.

The Tenancy Agreement is solely on my name and legally I am not allowed to sublet (although the landlord actually knows I have a lodger but since the rent has always been paid fully on time and the property has been looked after well, he does not mind at the moment) so there is no contract/agreement between me and the lodger or the lodger and the landlord.

Lodger pays only 400/month for his room . All the other expenses for the house are on me.

How will the OR see this situation when calculating If I ll get an IPA or not?

Can the OR ask me to find a more affordable property to rent which is almost impossible in my position?

Will the OR get in touch with the landlord or the lodger?. I do not want them to know that I am bankrupt as this would most definitely lead the landlord asking me to vacate the property.

Thanks,

Hi there, thanks for posting.

If you’re worried and would like to discuss things with your Official Receiver, there shouldn’t be a problem in contacting them now. However it’s very likely that they’re just extremely busy at the moment and will be in touch with you as soon as possible.

It’s likely that the OR will ask to see a copy of your tenancy agreement as part of the information gathering they do when putting together a person’s bankruptcy. It may be worth checking the tenancy agreement you signed when you moved into the property to make sure that insolvency wouldn’t be considered a breach of contract. Provided there is no BR clause and you’re up to date with the rent, the OR might not contact the landlord at all. However, if you fail to provide a tenancy agreement the OR is extremely likely to contact the landlord to clarify the situation.

If the tenancy agreement does mention bankruptcy as an eviction condition, or you’re worried about the OR talking to your landlord, it may be best to make the landlord aware that you’re going bankrupt rather than have them find out from the OR. If you have a good record of paying on time then there’s a chance the landlord will take this into account.

In regards to a possible IPA, the £400 income you’re receiving should be declared and it is possible an IPA may be set. It’s unlikely that the OR will tell you to move to a more affordable property. The OR should talk you through any decision you make however and give you chance to have your say, as long as you’re forthcoming with any information they may ask from you.

Kind regards

Rachel

couponist

I know someone that needs financial advice. Over the past few years her partner has convinced her to take out many loans and credit cards.
2 loans; 10000 and 3000, at least 8% on each.
2 credit cards; total 2500. 1800 on interest free.
Store cards; 250

She's a single mum now he's left her. The large loan is for a car that he has taken (all in her name), and since he paid a few hundred pounds deposit she can't report it stolen.

She can't afford the repayments on all these agreements, pay rent and buy food for the child.

Should she declare herself bankrupt? She has nothing of any value.
Looks like he's gotten away with it.