Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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Herewego wrote: »

Thanks Richard that is really helpful.
We have taken equitable accounting into account due to the separation and divorce she had moved out when she went bankrupt so really there isn't much left for her as equity.
The bankruptcy was for about £18k but they are looking to reclaim 48k these charges are so high £30k in 2 years and 9 months, its also frustrating as he wasn't told until they approached after it had all gone through.
I'm worried they will take him to court now to force the sale of the property but I don't see them making much after all the costs and remaining mortgage is paid (house needs quite a bit of work).
It all seems very unfair as none of this was down to him yet hes fighting to keep the house just because they hadn't removed her from the mortgage and now he cant until this has all been sorted.
Sorry for the rambling just trying to advise him if there is anything he can do to save all the worry and his home

Hi there

Thanks for the reply. Not to worry. It's good that your friend has someone looking out for them through this process.

There's not much I can say for certain about your friend and the home unfortunately. A lot will be decided at this meeting. Usually in bankruptcy, but not always, the OR can consider giving back the client’s interest in the property if there is negative equity and no reasonable chance of an improvement.

A Charging Order could be another alternative to the property being sold also. However, there’s no limitation period on a charging order applied by the OR so an order for sale can be applied for at any point in the future.

As with every bankruptcy, it's up to the OR to decide, so for now we'll have to wait and see.

Best of luck
Richard.

RentingForever

Hi,

I am a discharged BR (albeit only 5 months) and have an IPO for another 2 years or so.

As I rent the family house and we are about to be served notice by landlord, I am looking at options to either (a) carry on renting or (b) doing a deal with a family member who want to invest some money into a property to rent out.

If they were to invest a deposit, what are my chances of getting a mortgage to top-up the investment so that I can buy rather than carry on renting - paying my family member the equivalent rent as a return for their investment?

Are there any good mortgage advisors who people could recommend speaking with to see how possible it would be to obtain a mortgage as a discharged BR?

Many thanks for any help you can give :):)

Former_StepChange_Richard

RentingForever wrote: »

Hi,

I am a discharged BR (albeit only 5 months) and have an IPO for another 2 years or so.

As I rent the family house and we are about to be served notice by landlord, I am looking at options to either (a) carry on renting or (b) doing a deal with a family member who want to invest some money into a property to rent out.

If they were to invest a deposit, what are my chances of getting a mortgage to top-up the investment so that I can buy rather than carry on renting - paying my family member the equivalent rent as a return for their investment?

Are there any good mortgage advisors who people could recommend speaking with to see how possible it would be to obtain a mortgage as a discharged BR?

Many thanks for any help you can give :):)

Hi there

Thanks for the post.

The short answer is yes, you can get a mortgage once you have been discharged. The bankruptcy restrictions are what was preventing you from getting a mortgage, but when you are discharged, these no longer apply.

The longer answer is, it will not be easy, but it is possible. There is a great thread on the forum about this topic where someone has outlined the steps they took to get a mortgage after being discharged. I'm not saying this is guaranteed or perfect method for getting a mortgage, but it does go a long way to show the kind of steps that will help towards this goal.

The Money Advice Service are a great place to start if you want to speak with a mortgage advisor. They can point you in the right direction for free and local advisors for you.

It would be a good idea to have some details together for your income and expenses as they will need this to work out affordability.

I hope this helps.
Richard.

jammin79

Hi there,

I have quite a bit of Credit Card debt that i have been switching from card to card for about 7 years now. I have always paid the minimum monthly amount and technically my credit rating is very good.

Currently I am living in Australia and the cost of living is very high here, but the quality of life is very good. The past few years i have earnt enough to live a basic life in Australia and meet my minimum credit card payments in the UK, but have not been able to actually pay any of the debt off.

I have very recently started my own business here in Australia and at the moment i am only just earning enough to pay rent and cover basic expenses out here and no longer can afford to make the minimum payments and i am starting to think that i will never be able to pay off the debt. I do not want to be transferring from card to card for the rest of my life.

1. Do you think it would be advisable to declare myself bankrupt in the UK? and if so how would i go about doing that (if it is even possible) while living in another country.

2. do you know if declaring myself bankrupt in the UK will effect my credit rating and my new business out here in Australia.

3. Also will this effect my Parents in any way as all credit that i have is listed at their address.

Effectively i have no savings and no assets of any value to my name. (aside from the new business, which is a Franchise and is currently earning very little money).

I am not sure how long i will stay in Australia but it will be for at least another 12 months. potentially much longer if my business is successful.

Many thanks.

Former_StepChange_Richard

jammin79 wrote: »

Hi there,

I have quite a bit of Credit Card debt that i have been switching from card to card for about 7 years now. I have always paid the minimum monthly amount and technically my credit rating is very good.

Currently I am living in Australia and the cost of living is very high here, but the quality of life is very good. The past few years i have earnt enough to live a basic life in Australia and meet my minimum credit card payments in the UK, but have not been able to actually pay any of the debt off.

I have very recently started my own business here in Australia and at the moment i am only just earning enough to pay rent and cover basic expenses out here and no longer can afford to make the minimum payments and i am starting to think that i will never be able to pay off the debt. I do not want to be transferring from card to card for the rest of my life.

1. Do you think it would be advisable to declare myself bankrupt in the UK? and if so how would i go about doing that (if it is even possible) while living in another country.

2. do you know if declaring myself bankrupt in the UK will effect my credit rating and my new business out here in Australia.

3. Also will this effect my Parents in any way as all credit that i have is listed at their address.

Effectively i have no savings and no assets of any value to my name. (aside from the new business, which is a Franchise and is currently earning very little money).

I am not sure how long i will stay in Australia but it will be for at least another 12 months. potentially much longer if my business is successful.

Many thanks.

Hi

Thanks for your post and welcome to the forum.

It's great that you're looking for a way to pay your debts back that's more practical for you. I know it can be difficult to clear debts when you can only afford minimum payments, but there may be options other than bankruptcy that are more suitable to consider also.

There's a lot to take into consideration for anyone when trying to figure out if bankruptcy is the right course of action to take. For us to be able to advise you one way or another, we'll need to discuss your financial situation in detail so we know what is happening with all aspects of your money. From this conversation we will then be able to say if bankruptcy is right, or if there's any other options that are better suited for you. You begin this process and can contact us here.

Our website has some basic information about bankruptcy in the UK and the process that's involved. Recent changes have seen applications for bankruptcy move to an online process rather than requiring you to appear in court. You are still be expected to supply all the same information about your income, expenses, debts and assets when applying.

Whilst you can apply for bankruptcy in the UK, do be aware that your application may be refused. The adjudicator (person responsible for approving your application) isn’t obliged to bankrupt you and has the discretion to refuse to make a bankruptcy order if it appears you have no real connection to the UK.

The general rule of thumb to identify a 'connection' is if you have lived or carried on business in England or Wales in the last three years. Even if you have been in the UK in the last three years, that may still reject if it appears your main residence and place of business is elsewhere.

Also bear in mind that if you did apply and were approved, your bankruptcy in the UK could affect your finances, credit rating, assets and business in Australia. Due to international trade law, the Insolvency Service in the UK can request the cooperation of Australian courts or insolvency agencies to realise assets or investigate your finances.

Your parents shouldn't be affected provided they are not liable for your debts. They may well receive a number of letters that are addressed to you, but their finances will not be affected if they are not liable for your debts.

I hope this has been of some help and as you can see there's a lot to think about. Do let us know if you would like to discuss this further and consider any other options that may be more suitable for you.

Take care.
Richard.

Chorlton74

my 6 years was up on 10/4/16. my file needs cleaning up, as there is still a default on it, but, once that has gone, in a nutshell, what can/can't i apply for credit wise? will i face any major obstacles now that 6 years is complete?

thank you.

StepChange_Allen

Chorlton74 wrote: »

my 6 years was up on 10/4/16. my file needs cleaning up, as there is still a default on it, but, once that has gone, in a nutshell, what can/can't i apply for credit wise? will i face any major obstacles now that 6 years is complete?

thank you.

Hi there

Thanks for posting.

When it comes to applying for credit, there are few if any guarantees of what people can and can't get, and this is no different with people that have been through bankruptcy.

In my time as a debt advisor I've heard of people that have been bankrupt and got a mortgage just a few years later, and others that still struggle to get even basic forms of credit.

As you're probably aware, when you go bankrupt your credit rating will likely be very low, but there are steps that can be taken to improve it as soon as you're discharged from bankruptcy. So, it's likely that any credit you might get will depend on what you have or haven't done since you were discharged from bankruptcy.

The MSE website is full of useful articles relating to credit ratings. This one discusses 10 things you need to know about credit ratings, and another explains 25 ways of improving your credit rating.

If you're thinking about credit cards, there's an eligibility calculator, again on the MSE site, as well as a loans calculator too.

With regards to any obstacles you may face, this would mainly be just due to any effect on your credit rating still there as a result of going bankrupt; i.e. your score would have gone down then so will probably still be lower than otherwise. The only other thing I can think of could be if you have to declare that you've been bankrupt before, such as on a tenancy agreement. There may be something like this that you apply for where they won't accept anyone that has ever been bankrupt, though this isn't common. This doesn't apply to normal credit applications (e.g. credit cards and loans) as far as I understand.

I hope this helps.

Allen

nixxxi17

I declared myself bankrupt in 2006 and am now sadly in the position of having to make myself bankrupt again. Will the procedure be different to last time and will there be repercussions as this is my second time of being made bankrupt. I have a long term degenerative health condition and am unable to work. I have spoken to one of your counsellors who said that bankruptcy is the best option for me but I did not discuss my prior bankruptcy and I am very worried about the implications.
Any information you can give me would be gratefully received.
Many thanks.

StepChange_Allen

nixxxi17 wrote: »

I declared myself bankrupt in 2006 and am now sadly in the position of having to make myself bankrupt again. Will the procedure be different to last time and will there be repercussions as this is my second time of being made bankrupt. I have a long term degenerative health condition and am unable to work. I have spoken to one of your counsellors who said that bankruptcy is the best option for me but I did not discuss my prior bankruptcy and I am very worried about the implications.
Any information you can give me would be gratefully received.
Many thanks.

Hi there

Thanks for posting.

Firstly, I'm sorry to hear about your ill health. In terms of bankruptcy, there's nothing different about going bankrupt the second time from the first time, as long as you don't have any bankruptcy restrictions in place from the original application. Hence there doesn't sound like anything else regarding this to worry about.

What has changed is that the process is now done entirely online, so there's no longer a need to attend court. I'm sure that the debt advisor you spoke with would have explained that process to you.

I hope this provides some re-assurance. If you'd like to get further confirmation, if you call our bankruptcy team back and make them aware of the previous bankruptcy, they can double check things for you.

Allen

Herewego

Hi

I'm back again looking for more advice, we have heard today from the trustee that in one final attempt to resolve the issues they want the consent of my friend to put the property to auction. He has made numerous offers to resolve this over the months more that what is required after equitable accounting has been taken into account. However 50% of what they are trying to recover is their fees, interest and charges this cant be right ??

1. Can they force him to sell, the bankruptcy is his ex wifes and she only has a small amount of money in the property less than what the bankruptcy was for.
2. If taken to court will it be taken into account he has made all these offers
3. Can we suggest they recover the money from her as she is in a very good job now although she has lied and moved house many times without telling them.

Not sure if you can help with limited information but have tried to cover the basics

Many thanks HWG