Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

bucko7878

IT's crazy. What is the point of the lender keeping you there if they can't come to you for payments. All they are doing is stopping you from moving on. 6 years I've had of this now. It's really unfair.

StepChange_Rachael

Hi

Thanks for posting.

When you’re renting and looking to go bankrupt there is a chance that you could be evicted. This is because they could choose to include in your original rental contract a clause that breaks the contract if the tenant goes insolvent.

You can check your contract for this clause. If it’s not in there then bankruptcy won’t affect your rental agreement.

If the clause is in there then it’s worth checking with your housing association as you’ve done.
Even if the clause is in your contract if the housing association say they won’t act on it then it won’t affect your tenancy.

It’s especially unlikely to affect your tenancy if you’re up to date with your rent.

It’s more likely to affect clients privately renting who have rent arrears.

I’d suggest contacting your housing association again to double check before you declare yourself bankrupt and ask for written confirmation if they confirm bankruptcy won’t terminate your tenancy.

I hope that helps.

Thanks
Rachael

doorstep54 wrote: »

Hi I would like to ask about bankruptcy as any one gone bankrupt and been evicted out of housing association house for going bankrupt even not being in rent arrears as am about to go bankrupt I did ask my housing if I would be evicted they said I would be ok but the man I spoke to there as left now worried any help PLEASE

StepChange_Rachael

Hi Louise

Thanks for posting.

I’m sorry to hear you're in what I imagine is a difficult situation.

Any liability for the debt will have been included in the bankruptcy so you’re right in thinking that they can’t come to you for payments. If for any reason the house sold or was repossessed in the future you wouldn’t be responsible for paying back any shortfall. However, I know that your main concern is with the mortgage still being in your name and it causing you and your ex-partner to struggle to get on top of your current financial situation.

It’s my understanding that you should be taken off the agreement under the circumstances. However it’s a little out of our remit. I’d suggest contacting the Official Receiver or the Insolvency Service. They’d be able to give you more in depth advice about the legalities of the mortgage agreement after bankruptcy.

If you’re contacting the Financial Ombudsman Service (FOS) we’d suggest following the official complaints procedure with the creditor first then if you aren’t happy with their response or they haven’t responded within eight weeks then you can contact the FOS to look into the dispute for you.

Thanks
Rachael

bucko7878 wrote: »

Hi

I went bankrupt in 2010 and discharged 6 months later. Included in that bankruptcy was a house I held jointly with my ex partner. I moved out in 2008 and haven't made any payments towards the mortgage since that date. My ex bought my beneficial interest in the property from the official receiver and I was advised that it was now up to him to transfer it into his sole name. I've been battling with the mortgage company for a few years now but they will not agree to a transfer of equity to remove me from the mortgage. I'm just wondering where I stand on this. The advice given to me at the time from the official receiver was that I was no longer liable for the mortgage payments as they are covered in my bankruptcy and if the property was repossessed the mortgage company couldn't come to me for any shortfall. Likewise if the house sold for a profit I wouldn't be entitled to that either. I'm just worried as my ex partner has now moved out of the property and is trying to change it to a buy to let mortgage but is struggling. I obviously need to resolve this issue anyway as it is stopping me and my partner from buying in the future. I do have a complaint in with the Financial Ombudsmen to see if they can help me get my name removed.

Any advice would be greatly appreciated.

Louise

doorstep54

Thank you for the reply, just one other question please, am £28.000 in debt I could never pay it back as am on minimum wage my budget is low and paying my creditors £1 each a month as there is 14 of them, at the moment what would happen if I didn't go bankrupt what is the worse the creditors do as am really worried about being evicted

StepChange_Allen

doorstep54 wrote: »

Thank you for the reply, just one other question please, am £28.000 in debt I could never pay it back as am on minimum wage my budget is low and paying my creditors £1 each a month as there is 14 of them, at the moment what would happen if I didn't go bankrupt what is the worse the creditors do as am really worried about being evicted

Hi

Thanks for your post.

I can understand why you'd be worried about the possibility of losing your home. The action that can be taken by creditors and the worst case scenario depends on what type of debts they are. The most common debts like credit cards and unsecured personal loans won't directly cause you to be evicted, but there are some types of debts that could lead to that if not dealt with in the right way.

We'd be very happy to look at your financial situation and debts so that we can recommend the best steps to take to deal with them. Our service is free of charge and we provide impartial, tailored advice.

If you're interested in our help then please visit our website for details of how to register.

We hope to speak with you soon.

Allen

doorstep54

Yes they are credit card debts, I was with you, you was paying token payments for me but after 6 months you had to stop token payments as you only pay for that long, and wasn't able to go on payment plan as you said couldn't afford to pay all creditors £5 each a month so you told me to make payments my self of £1 to them all why saved for bankruptcy, so just wanted to know if didn't go bankrupt what is the worse that they can do to me as in my post before don't want to get evicted from my home as live here for 28 years its my home

Former_StepChange_Richard

doorstep54 wrote: »

Yes they are credit card debts, I was with you, you was paying token payments for me but after 6 months you had to stop token payments as you only pay for that long, and wasn't able to go on payment plan as you said couldn't afford to pay all creditors £5 each a month so you told me to make payments my self of £1 to them all why saved for bankruptcy, so just wanted to know if didn't go bankrupt what is the worse that they can do to me as in my post before don't want to get evicted from my home as live here for 28 years its my home

Hi there

Thanks for your reply.

Assuming you are living in England or Wales (please let us know if not) for credit card debts, creditors are able to apply for something called a county court judgement (CCJ) against you once you have defaulted on your agreement with them. I'm assuming you have defaulted already given the advice you have had from us so far.

Creditors wont automatically apply for a CCJ against you. Some may do, some may not. If they don't, they could involve a debt collection company to try and collect the debt from you. Again, given the advice you have had from us, I'm assuming this has probably already happened too. These companies have no further powers over you than the original creditor.

CCJ's allow the creditor to take further action against you to collect the debt. You can read about the ways CCJs can be enforced against you here.

You've mentioned you are living in a housing association, but have not said if you own the house now or if you are renting. If you are renting the property, credit card debts cannot directly cause you to be evicted from your home.

From the link above you'll see how this can be different if you own the house as this could be affected by something called a charging order. These can result in a creditor trying to force the sale of your property if you own the house.

I hope this has helped a little. If you have any further questions you can call and discuss this with an advisor. We will be happy to give any support you need. Just in case, you can find all our contact details here.

Take care
Richard.

andyck1983

Hi. I am in a bit of a situation and I dont know what to do.

I opened a business that failed and I was a bit naive.

Once it closed I had a bit of a breakdown. I currently have the business rates chasing £10,000 i cannot repay. I have no home and am sofa surfing and was signed off work due to my condition but have recently come off to try and work again. I do not earn a lot of money but have no hope of paying this off the way they want. I have a few other debts as well but this is the main one. I cant pay this and afford a roof as well and I have a 7 yr old i need to try and provide for but I can barely do that. Is bankruptcy an option? I am not looking for a quick fix and have considered my options but I just dont earn enough and am trying to regain some integrity by trying to work in spite of my condition but feel stuck between a rock and a hard place!

Any help or advice would be greatly appreciated!

StepChange_Rachael

Hi

Thanks for posting.

I’m sorry to hear that you’re struggling with debt from the loss of the business. It sounds like you’re going through a difficult time at the moment.

There is definitely a way forward to deal with the debts you have. There are many solutions available to deal with problem debt and bankruptcy is one option that might be a consideration. However, there are many different options available and it's important you know all your options.

I’d suggest getting tailored advice to discuss further the options available to you. To be able to advise you accurately it’s important to take into consideration your financial situation. Your income, expenditure and debts.

You can find our contact details here for accurate free advice and recommendations.

Thanks
Rachael

andyck1983 wrote: »

Hi. I am in a bit of a situation and I dont know what to do.

I opened a business that failed and I was a bit naive.

Once it closed I had a bit of a breakdown. I currently have the business rates chasing £10,000 i cannot repay. I have no home and am sofa surfing and was signed off work due to my condition but have recently come off to try and work again. I do not earn a lot of money but have no hope of paying this off the way they want. I have a few other debts as well but this is the main one. I cant pay this and afford a roof as well and I have a 7 yr old i need to try and provide for but I can barely do that. Is bankruptcy an option? I am not looking for a quick fix and have considered my options but I just dont earn enough and am trying to regain some integrity by trying to work in spite of my condition but feel stuck between a rock and a hard place!

Any help or advice would be greatly appreciated!

doorstep54

Sorry for keep posting there was just last question need to ask, is it true when you make your self bankrupt you have to stop paying poll tax ? As been told when you go bankrupt don't pay poll tax till next year, can't you get in trouble if you don't pay it