Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Jen

blonde_redhead1 wrote: »

Hello.
Just wanting some advice please. Iva is completed now and completion certificate received. It started Feb 2011 and was settled with a lump sum in October 14. We are now wanting to improve credit rating as wanting to change rental property or even consider a mortgage. Ive checked insolvency register and names are not there now which I was surprised about as I thought they would be there till feb 2017 (6 years after starting Iva). Noddle are saying credit score very low still.
Are we allowed to try some of the high interest credit cards etc to use to rebuild credit rating to improve our chances of getting a new tenancy /mortgage or sdo we need to wait till Feb 17? and why would names not be showing on insolvency register? many thanks

[FONT=&quot]Hi there,[/FONT]

[FONT=&quot]Thanks for posting.[/FONT]

[FONT=&quot]The details of your IVA usually remain on the [FONT=&quot]I[/FONT]nsolvency [FONT=&quot]R[/FONT]egister for the duration of your IVA and usually for three months after it’s completed. As your IVA was completed a while ago now, it’s likely your information has been removed.[FONT=&quot] [/FONT]However your IVA will remain on your credit file for six years from the date it began. [/FONT]

[FONT=&quot]An IVA will impact your credit rating and due to this you may find it difficult to take out further credit. We’ve got an article with some tips on how to improve your credit file after an IVA that you might find useful to read. You can find it here:[/FONT]

[FONT=&quot]http://moneyaware.co.uk/2012/05/how-to-clean-up-your-credit-file-after-an-iva/[/FONT]

[FONT=&quot]I hope this helps,[/FONT]

[FONT=&quot]Jen [/FONT]

Flask_of_tea_in_the_car

Hi,

Our business (partnership) is going to have to close and we will need to go bankrupt.

Husband is going to start looking for a job but in the meantime I wanted to ensure we had 2 months of income in our bank account - this will be about £4200 (family of 6 and rent @£900 a month)

Just wondered how the OR is likely to view this and what other people have been allowed to keep for living on...

Obviously if he finds a job quickly we are expecting the OR to take any remaining

Thanks

StepChange_James

Flask_of_tea_in_the_car wrote: »

Hi,

Our business (partnership) is going to have to close and we will need to go bankrupt.

Husband is going to start looking for a job but in the meantime I wanted to ensure we had 2 months of income in our bank account - this will be about £4200 (family of 6 and rent @£900 a month)

Just wondered how the OR is likely to view this and what other people have been allowed to keep for living on...

Obviously if he finds a job quickly we are expecting the OR to take any remaining

Thanks

Hello,

These sorts of decisions are always at the discretion of the Official Receiver (OR) so I can't give a definitive answer. However having money available to cover a couple of months living costs doesn't seem ridiculous, particularly if you can produce an income and expenditure budget that shows you'll need this money to cover costs.

If you need any advice about the business side of the finances, I'd recommend getting in touch with Business Debtline:https://www.businessdebtline.org/. If you'd like advice about your personal finances, including whether bankruptcy is the best option, you can call us for advice: http://www.stepchange.org/Contactus.aspx.

Kind regards

James

fiseries

Hello. I hope someone can help me understand a few points about a bankruptcy procedure.

I am considering my option - carry on trying to service my debt but really getting nowhere (I am not really behind paying anything) or go IVA/DRO or Bankruptcy.

I have around £33K of unsecured debt to credit card, bank (overdraft and loan), tax bill (£6K) and catalogue companies. I rent my home, I'm not married but live with my partners and have two kids living with me and another child with an ex partner to whom I pay child support (private arrangement) each month.

I have a company car and take home around £3900 and I also get a commission from my job of between £1.5K - £3K every 3 months and then every six months an additional £2.5K-£3K on top. This means over the year another £11K - £18K take home but it goes up and down, there is no guarantee of any specific amount - it is based on performance against selling software. My take home could therefore be considered as £3900 + £916 - £1,500 a month if averaged.
My first question is: how would an IPA be calculated? Would they look historically and calculate an average and set it at that? If I did earn more could I then effectively keep it? Or would they set a repayment on my monthly salary and then allow one-off payments periodically which would match exactly my commission payments? or something else?
My second question is... I hear that an IPA lasts 3 years but I reckon that my allowable expenses will be around £2700 a month (rent is £1200, food & bills say £500 then clothing, car insurance, gas, electric, council tax etc). If this were the case I would effectively have at least £1200 a month 'surplus' and this alone would more than pay off the whole debt in 3 years. Add in my periodic commission (assuming I earn it) and I could conceivably pay it all off in as little as 13 months. Would they set the IPA at 13 months or will they spread it over 3 years anyway and reduce the IPA (although this would mean I would have surplus each month) or will they simply refuse the bankruptcy? Or maybe set the IPA based on my base for 3 years and allow me to exit early by taking my commission?
Finally is there anywhere where I can see examples of what 'reasonable' living expenses really are? I have found some things but they are a bit out of date and of course things get more expensive over time.

Many thanks

Frank

jamesgonzalez

Thanks to share idea.

vincentvannoy

Thanks you so much to share this idea.

Former_StepChange_Rory

fiseries wrote: »

Hello. I hope someone can help me understand a few points about a bankruptcy procedure.

I am considering my option - carry on trying to service my debt but really getting nowhere (I am not really behind paying anything) or go IVA/DRO or Bankruptcy.

I have around £33K of unsecured debt to credit card, bank (overdraft and loan), tax bill (£6K) and catalogue companies. I rent my home, I'm not married but live with my partners and have two kids living with me and another child with an ex partner to whom I pay child support (private arrangement) each month.

I have a company car and take home around £3900 and I also get a commission from my job of between £1.5K - £3K every 3 months and then every six months an additional £2.5K-£3K on top. This means over the year another £11K - £18K take home but it goes up and down, there is no guarantee of any specific amount - it is based on performance against selling software. My take home could therefore be considered as £3900 + £916 - £1,500 a month if averaged.
My first question is: how would an IPA be calculated? Would they look historically and calculate an average and set it at that? If I did earn more could I then effectively keep it? Or would they set a repayment on my monthly salary and then allow one-off payments periodically which would match exactly my commission payments? or something else?
My second question is... I hear that an IPA lasts 3 years but I reckon that my allowable expenses will be around £2700 a month (rent is £1200, food & bills say £500 then clothing, car insurance, gas, electric, council tax etc). If this were the case I would effectively have at least £1200 a month 'surplus' and this alone would more than pay off the whole debt in 3 years. Add in my periodic commission (assuming I earn it) and I could conceivably pay it all off in as little as 13 months. Would they set the IPA at 13 months or will they spread it over 3 years anyway and reduce the IPA (although this would mean I would have surplus each month) or will they simply refuse the bankruptcy? Or maybe set the IPA based on my base for 3 years and allow me to exit early by taking my commission?
Finally is there anywhere where I can see examples of what 'reasonable' living expenses really are? I have found some things but they are a bit out of date and of course things get more expensive over time.

Many thanks

Frank

Hi Frank,

Thanks for posting.

An IPA is calculated by the official receiver (OR) guidelines. They’ll use the information supplied by you, in your statement of affairs and details of expenses obtained directly from your bank, utility companies, and other bill providers.

Generally, if you have a surplus of £20 per month or more, the OR will set an IPA to collect this amount. The whole surplus will be taken. In addition to this, any bonus or overtime payments received during the IPA period will be taken. These are treated as income, rather than an after-acquired asset (such as a cash lump-sum).

If your circumstances change during the IPA term, you must then inform the OR and the payment amount will be revised.

We’re not aware of anywhere that you can obtain the official guidelines that the OR uses for their budgets. It could be that people might use the guidelines to manipulate their situation to the figures, but in any case it’s unlikely these are published.

It’s also worth considering other debt solutions that may be better suited to your situation. Insolvency solutions are just some of the available debt solutions, and if you’re unsure which solution is right for you then you can use our anonymous Debt Remedy tool at www.stepchange.org/Debtremedy to get free, tailored advice based on your budget and circumstances.

Debt Remedy will take into account your income, outgoings, debts and see if there are alternatives to help you become debt free. You can also call us if you’d prefer, visit our website at www.stepchange.org/Contactus to find out how to get in touch.

I hope this helps,

Rory

bri90bri

Hello, I am currently looking into MAP Sequestration, I meet the requirements at present. I say at present because I am unsure if I have details of all creditors. My first question is will the current balance be the balance the AIB looks at for example I have a mobile phone contract that will be getting included in the bankruptcy as I cant afford the bill but wont they add on disconnection charges and the likes meaning the balance is a lot more than what it is at present?

My second question is about arrears such as council tax and fines such as parking fines issues by the local council. I have both of these. I spoke to the citizens advice who suggested theses would not be cleared with a bankruptcy as they are not loans and such. Its the law I pay these however I spoke to a solicitor who said they would be included as I cant afford to pay them.

I am currently unwell and have not worked now since September due to ill health. I claim employment support allowance and have also just applied for PIP.

kingimuk

My employer wants me to sign belatedly an employment contract. In it a clause states that I will (may) be made redundant if I am declared bankrupt. I have queried this and am told this is the law!


Surely this cannot be true as an unemployed person will not be able to earn and therefore never repay creditors!? Who is right?


Thanks

StepChange_James

bri90bri wrote: »

Hello, I am currently looking into MAP Sequestration, I meet the requirements at present. I say at present because I am unsure if I have details of all creditors. My first question is will the current balance be the balance the AIB looks at for example I have a mobile phone contract that will be getting included in the bankruptcy as I cant afford the bill but wont they add on disconnection charges and the likes meaning the balance is a lot more than what it is at present?

My second question is about arrears such as council tax and fines such as parking fines issues by the local council. I have both of these. I spoke to the citizens advice who suggested theses would not be cleared with a bankruptcy as they are not loans and such. Its the law I pay these however I spoke to a solicitor who said they would be included as I cant afford to pay them.

I am currently unwell and have not worked now since September due to ill health. I claim employment support allowance and have also just applied for PIP.

Hi there,

It's hard to say for sure without knowing the full situation, but I'd expect the amount of the mobile debt, if it was being included, would be the total that you owe, not just the element that is currently owed.

My notes state that most debts are included in MAP bankruptcy but court fines, child maintenance arrears and student loans aren't includes. Depending on the type of parking fines, it may be that these wouldn't be included.

We can give you in-depth advice about whether MAP bankruptcy is a good option for you, alongside all the other possible options to deal with your debt. You can do this online, using Debt Remedy, our online advice tool: http://www.stepchange.org/Contactus.aspx or by giving our Helpline a call: http://www.stepchange.org/Contactus.aspx.

Kind regards

James