Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

doorstep54

I was made bankrupt last month had letter from official receiver saying it could be possible that an insolvency practitioner my be appointed as trustee' I just was wondering why, as throught OR was suppose to deal with my bankruptcy ? bit worried what this means

Former_StepChange_Richard

doorstep54 wrote: »

I was made bankrupt last month had letter from official receiver saying it could be possible that an insolvency practitioner my be appointed as trustee' I just was wondering why, as throught OR was suppose to deal with my bankruptcy ? bit worried what this means

Hi there

Thanks for your post. Bankruptcy has many confusing parts to it, but hopefully I'll be able to explain this one for you. The main point I'll make is that this is normal in the process of bankruptcy.

When a bankruptcy order has been made, the OR will be appointed as the trustee. This means they will administer your bankruptcy and take control of any assets you have.

In some cases, the OR may appoint an insolvency practitioner (IP) to act as the trustee in their place. This is most likely to happen if you have assets of value, a mortgaged or owned property with a significant amount of equity, for example.

In cases where an IP is appointed solely to administer an income payment agreement, they are not acting as the trustee.



I hope this helps

Richard

doorstep54

I don't have mortgage or assets of high value I have been given a nil tax code which I have to pay that to some one else that as been appointed for that so am not sure

Former_StepChange_Richard

doorstep54 wrote: »

I don't have mortgage or assets of high value I have been given a nil tax code which I have to pay that to some one else that as been appointed for that so am not sure

Hi there

The nil tax code change is a common occurance in bankruptcy. The process is as follows:

· The Insolvency Service inform HM Revenue & Customs about all bankruptcy orders

· HMRC contacts the payroll department of your employer to amend the client’s tax code to NT (nil). This means no further tax will be taken, but National Insurance will continue as normal.

· The trustee will tell you if this affects your bankruptcy (if you have an income payment arrangement set for example)

· Your tax code returns to normal and your income tax will resume from the following 5 April, or if you get a new job in the interim

I hope this clears this up for you. Let us know if you have any further quesitons.

Richard

punkypirate

Hi,
I would really appreciate your advice.
I did debt remedy and was advised to take out an iva, but had felt bankruptcy was a more appropriate option, mainly because it will be completed before my eldest child goes to university. I have no assets apart from a 15 yr old fiesta, maybe worth £300 and live in rented accomodation.
The iva company have been helpful and pushed on with the process, but seem unwilling to engage in any discussion about bankruptcy, other than to tell me i don.t want to go bankrupt becuse i will pay £630 a month in an ipa, when bankrupt, as against £260 ish in my iva. My salary is £14, 500 pa, i get housing benefit and tax credits and child maintenance(c. £430 pcm) i was under the impression the allowances for iva and bankrupcy living expenses were similar? Or does only bankruptcy count maintence perhaps as the difference is similar. I willask my family for help with the fee if it means i am free to help my daughter when she leaves home. I really wished she and her younger brother would have more opportunity in life than i did.

StepChange_Rachael

Hi
Thanks for your post and welcome to the forum.

It’s really important that a solution is right for you, so I can understand why you’d want to make sure your decision is the right one.

As you’ve already spoken with us I’ll send you a private message so we can discuss the next steps further.

Thanks
Rachael

punkypirate wrote: »

Hi,
I would really appreciate your advice.
I did debt remedy and was advised to take out an iva, but had felt bankruptcy was a more appropriate option, mainly because it will be completed before my eldest child goes to university. I have no assets apart from a 15 yr old fiesta, maybe worth £300 and live in rented accomodation.
The iva company have been helpful and pushed on with the process, but seem unwilling to engage in any discussion about bankruptcy, other than to tell me i don.t want to go bankrupt becuse i will pay £630 a month in an ipa, when bankrupt, as against £260 ish in my iva. My salary is £14, 500 pa, i get housing benefit and tax credits and child maintenance(c. £430 pcm) i was under the impression the allowances for iva and bankrupcy living expenses were similar? Or does only bankruptcy count maintence perhaps as the difference is similar. I willask my family for help with the fee if it means i am free to help my daughter when she leaves home. I really wished she and her younger brother would have more opportunity in life than i did.

MM1975

Hi there,

I spent 4 hours on the phone with someone at StepChange on Friday and went through everything - in the end the choices were IVA or Bankruptcy. I initially said I thought IVA would be best & they referred me to your IVA team. However after I ready through the booklet they sent and did some research (including this fab site!) I think that perhaps I'm just delaying the inevitable and bankruptcy might be the best choice. However when I called the advisor line back yesterday the (different) person I spoke to refused to answer any other questions and said "the solution has already been selected" in reference to the IVA. Does this mean I'm stuck with the IVA and can't change? Why can't I ask for more info? Thanks in advance!

Butts

This may sound like a strange query but I don't want to be locked into an IPA in Scotland which even if set at nil at the outset can be resurrected even after discharge for a further three years. This is effectively a four year penalty.

As I understand it in England if no IPA is set by the time of discharge that's it - all over in a year and you can get on with your life with no "hangover" for a further three years.

My belief is that it I may be eligible if my "centre of main interest" could be demonstrated by working in England for a period which I have yet to determine prior to a Bankruptcy Application. The period in question seems to vary between 3 months +1 day and 6 months.

Is this correct or if not how is it technically possible to go Bankrupt in England next October whilst having my main residency in Scotland ?

Thanks.

StepChange_Rachael

Hi

Thanks for posting.

We can certainly discuss with you your options in more detail if you’re undecided and would like further advice.

I’m sorry when you called back you weren’t able to discuss the options further, this might have been because you’d need to speak with a different department.

To make sure I get you through to the correct department I’ll message you privately to get some further information.

Thanks
Rachael

MM1975 wrote: »

Hi there,

I spent 4 hours on the phone with someone at StepChange on Friday and went through everything - in the end the choices were IVA or Bankruptcy. I initially said I thought IVA would be best & they referred me to your IVA team. However after I ready through the booklet they sent and did some research (including this fab site!) I think that perhaps I'm just delaying the inevitable and bankruptcy might be the best choice. However when I called the advisor line back yesterday the (different) person I spoke to refused to answer any other questions and said "the solution has already been selected" in reference to the IVA. Does this mean I'm stuck with the IVA and can't change? Why can't I ask for more info? Thanks in advance!

StepChange_Rachael

Hi

Thanks for your post.

I can understand when choosing a debt solution you’d want the solution to be right for you and for it to be resolved as soon as possible. However with solutions like Bankruptcy an Official Receiver (OR) will look in depth into your full situation.

It’s my understanding that a person’s main residency will be classed as where their main interests are such as property, where they pay council tax and the length of time in that country. Also the OR may also query what country the debts were taken out.

I think it’s unlikely that just by working somewhere for a short period of time and having no other links to that country, that the OR would class this as a person’s main centre of interest when it comes to Bankruptcy.

I’d need to know more about your situation to be able to give more detailed advice but ultimately it would be the decision of the OR.

If you’d like further advice tailored to your personal situation you can find our contact details here. We do provide English and Scottish debt advice.

Thanks
Rachael

Butts wrote: »

This may sound like a strange query but I don't want to be locked into an IPA in Scotland which even if set at nil at the outset can be resurrected even after discharge for a further three years. This is effectively a four year penalty.

As I understand it in England if no IPA is set by the time of discharge that's it - all over in a year and you can get on with your life with no "hangover" for a further three years.

My belief is that it I may be eligible if my "centre of main interest" could be demonstrated by working in England for a period which I have yet to determine prior to a Bankruptcy Application. The period in question seems to vary between 3 months +1 day and 6 months.

Is this correct or if not how is it technically possible to go Bankrupt in England next October whilst having my main residency in Scotland ?

Thanks.