Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Butts

Thanks for that.
Ironically all the debts were taken out in England so would that have any bearing ?

If not what is the minimum residency requirement in England/Wales prior to applying for Bankruptcy ?

Former_StepChange_Richard

Butts wrote: »

Thanks for that.
Ironically all the debts were taken out in England so would that have any bearing ?

If not what is the minimum residency requirement in England/Wales prior to applying for Bankruptcy ?

Hi there

Just to cover a few of points on this:

In England and Wales an IPA lasts 36 months. It can be shorter than this, but it’s unusual. The OR may not set up an IPA straight away, but it must be set up before you are discharged. If the IPA is set up just before you are discharged, this means the final IPA payment can be almost four years after the date of the bankruptcy order.



Center of main interest does not have a clear legal definition. For self-employed people it is usually the country they carry out the majority of their business. For non-self-employed people it is usually the country where they mainly live, pay bills and operate a bank account. These are not definitve and are always open to interpretation.



The rules for where to apply for bankruptcy within the UK are as follows:

A person can go bankrupt in England or Wales if:

1. They don’t have their centre of main interests (COMI) in another EU country (apart from Denmark) (see below for more on COMI), and

2. They either:
a. Currently live in England or Wales; or
b. In the last three years they have lived in, or run a business in England or Wales

A person can go bankrupt in Scotland if:

1. They don’t have their centre of main interests (COMI) in another EU country (apart from Denmark) (see below for more on COMI), and

2. They either:
a. Currently live in Scotland; or
b. In the last 12 months they have lived in, or run a business in Scotland


Without knowing more about your situaiton it's hard to say for certain, but it seems unlikely that you would be able to declare yourself banklrupt in England by October 2017 whilst living in Scotland.



I hope this helps.



Richard

Butts

With regard to the IPA as I understand it if you are on a low income or benefits at the time of bankruptcy petition it is very unlikely that an IPA will be set.

If your circumstances remain the same during the year and at the time of your discharge you still do not qualify for an IPA then that is it - no IPA can be set after discharge.

Conversely in Scotland even if you are awarded a "nil payment" IPA at the time of sequestration and discharged after a year should your financial position improve in the following three years after discharge an IPA can kick in.

So the big difference between England and Scotland is the fact that an IPA can be made post discharge in Scotland but not in England. This effectively means a four year "waiting period" in Scotland but only a year in England.

Is that not correct ?

With regard to eligibility for bankruptcy in England I believe you can qualify by having been resident for 6 months during the past three years.

So if I moved down to England in January and stayed until July what is to stop me moving back to Scotland having obtained the 6 month residency requirement and going Bankrupt from there in England later in the year. I don't think it says anywhere that you have actually got to be living in England at the time of the Bankruptcy as long as you have satisfied the "6 months in 3 years"

Is that not correct ?

Thanks.

StepChange_Rachael

Hi

Thanks for your reply.

It is correct as you’ve mentioned that in England an IPA can’t be set after discharge, whereas if you were discharged in Bankruptcy in Scotland an IPA can be set after discharge.

The reason why my colleague and I are siding on the edge of caution is because as my colleague mentioned in the above post it’s likely having residency in Scotland shows your centre of interest in Scotland.

The Bankrupt would then also have to meet one of the other two requirements. Either they currently live in England or Wales or have ran a business in England or Wales in the past three years.

Living in England for over six months alone wouldn’t meet the requirements to declare bankruptcy in England.

I hope this is helpful.

Thanks
Rachael

Butts wrote: »

With regard to the IPA as I understand it if you are on a low income or benefits at the time of bankruptcy petition it is very unlikely that an IPA will be set.

If your circumstances remain the same during the year and at the time of your discharge you still do not qualify for an IPA then that is it - no IPA can be set after discharge.

Conversely in Scotland even if you are awarded a "nil payment" IPA at the time of sequestration and discharged after a year should your financial position improve in the following three years after discharge an IPA can kick in.

So the big difference between England and Scotland is the fact that an IPA can be made post discharge in Scotland but not in England. This effectively means a four year "waiting period" in Scotland but only a year in England.

Is that not correct ?

With regard to eligibility for bankruptcy in England I believe you can qualify by having been resident for 6 months during the past three years.

So if I moved down to England in January and stayed until July what is to stop me moving back to Scotland having obtained the 6 month residency requirement and going Bankrupt from there in England later in the year. I don't think it says anywhere that you have actually got to be living in England at the time of the Bankruptcy as long as you have satisfied the "6 months in 3 years"

Is that not correct ?

Thanks.

dealingwithalot

A question which I have not found an answer to anywhere else. I appreciate that bankrupts are listed in the London Gazette, creditors are informed, and it is listed on your credit report.

I also appreciate that it is better to be upfront and honest with your spouse as to your plans to apply for bankruptcy - but all the same I would like to ask - is there are reason that they would be likely to find out, if they were not told by me?

I would really appreciate no moral judgement in response to my question, as I am going through a hugely difficult time and have been seeing my doctor for some time, with mental health issues, and am awaiting counselling for some bad things which happened in my childhood. I have been overspending to try and make myself feel better, all of my life.

I already know that this is not an honourable question or thing to contemplate, but I am not sure that I could handle the shame of my spouse knowing.

Note that in this case, there are no shared accounts or cards, and our home is in my spouse's name only - as they bought it before we got married. We have no financial links whatsoever.

I have already investigated all the options and completed an SOA, bankruptcy is the only option.

Would my bankruptcy, if granted, show up on my spouses' credit report and affect their future chances of obtaining credit?

Butts

Once again thanks for your counsel....

Although technically what I propose may be possible I think it is possibly better to be safe than sorry and move down to England or Wales to "do the deed".

A few further questions if you don't mind.

As my bankruptcy will involve over £100,000 are these scrutinised more thoroughly - ie am I likely to be "called in" rather than have a telephone interview with the OR? All debts are legitimate and the process will be sanctioned by my DMP Provider (the other free big one - sorry )

It is my intention to pay all my non-credit accounts up to date prior to bankruptcy (Utilities C Tax etc) will this stand me in good stead afterwards if I attempt to source providers in a new home or will it make no difference ?

During my six months in England to qualify will it be acceptable to the OR when I petition for bankruptcy for me to have lived with my Son or Ex Wife with no source of income and allow them to support me as they are both prepared to do. I don't intend to claim any benefits so will have no income.

Once my bankruptcy has been granted can I return to Scotland in the period between this and discharge with no adverse effects? - ie I will still be subject to the same conditions as if I was still living in England.

mum70

I've been checking my credit file and a CCJ was placed on my file Dec 2010, I got no letter etc, then in May 2011 another CCJ was put on my file. I was made Bankruptcy on April 2011. I was told not to try and remove the CCJ because they would fall off and it wasn't worth the hassle of trying to get them off. My questions are:


1. Can they put a CCJ on you account without a letter etc after you have been made bankruptcy.


2. If you received no information about the CCJ and how can I prove this.


What is my next steps.
Thanks

Delabodes

Hi, don't know if you can answer these 2 questions for me.

1) when filling out the online application it asks for asset details. I have a house so have entered this but when it asks for who currently resides there, there is no option for empty, all options assume occupancy of some sort and won't let me complete the section util i pick one. do you know what I should put down.

2) when filling in creditors I have entered all my unsecured debt. Do I also enter the outstanding debt on my mortgage? i.e. NRAM £XXXX then other in the box???

Thanks

StepChange_Rachael

Hi

Thank you for your post.

I’m sorry to hear you’re going through a difficult time at the moment and that the debts are causing added unneeded pressure.

It’s great that you’ve been able to access help and have clearly been proactive in exploring the options available for you.

In general once you’ve applied for Bankruptcy the Official Receiver (OR) will look into your full financial situation, Including if you’re living with a partner so that they can check that you’re making a fair payment to your household bills. This stops some people from declaring Bankruptcy saying they pay all the bills and therefore can’t afford to repay the debts when their partner pays nothing towards the household bills.

The OR will also look into the bankrupts assets to see if they’ll form part of the Bankruptcy, this includes beneficial interest. It’s possible if you live with a partner even if the property isn’t in your name that the OR would decide you have a beneficial interest in that property.

Your credit file shouldn’t impact anyone else’s even if you live in the same property. Although linked address will show on your credit file, creditors want to check how that individual manages their finances.

I hope that answers some questions; however I’m aware it might open up further considerations.

I’d suggest speaking with the Insolvency Service as they’ll be able to give you more detailed advice in regard to your situation and concerns over your partner being made aware before you decide to apply for Bankruptcy.

You can find their contact details here.

Thanks
Rachael

dealingwithalot wrote: »

A question which I have not found an answer to anywhere else. I appreciate that bankrupts are listed in the London Gazette, creditors are informed, and it is listed on your credit report.

I also appreciate that it is better to be upfront and honest with your spouse as to your plans to apply for bankruptcy - but all the same I would like to ask - is there are reason that they would be likely to find out, if they were not told by me?

I would really appreciate no moral judgement in response to my question, as I am going through a hugely difficult time and have been seeing my doctor for some time, with mental health issues, and am awaiting counselling for some bad things which happened in my childhood. I have been overspending to try and make myself feel better, all of my life.

I already know that this is not an honourable question or thing to contemplate, but I am not sure that I could handle the shame of my spouse knowing.

Note that in this case, there are no shared accounts or cards, and our home is in my spouse's name only - as they bought it before we got married. We have no financial links whatsoever.

I have already investigated all the options and completed an SOA, bankruptcy is the only option.

Would my bankruptcy, if granted, show up on my spouses' credit report and affect their future chances of obtaining credit?

Denpercy1

I have the HMRC threatening me with Bankruptcy because I owe them for Tax. I am recently divorced and the divorce virtually wiped me out financially. I am rebuilding though but,I am having difficulty raising the money and they have given me a deadline of December 2016. It's touch and go if i will have the funds by then ! Any tips ?