Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Rachael

Hi

Thanks for your reply.

With Bankruptcy it depends on a person’s situation as to how the Bankruptcy will proceed and what restrictions the OR will make, so it’s difficult to say. It can depend on assets, employment, previous debt solutions not just the amount of debt.

It’s always advisable to prioritise paying household arrears as non-payment has more risks than unsecured non-priority debts. Depending on the type of arrears its possible having these included in Bankruptcy could have some impact after Bankruptcy. For example if household fuels are included then a pre-payment meter may be installed until after discharge.

Bankruptcy will have an impact on your credit file so it’s likely that you'll find it harder to get credit after and that you might not be able to get the same offers that someone with a very good credit file would. This could include utility providers or taking out contracts such as phone contract and insurances.

It’s possible the OR may want to look into your living situation. They may want to check that your financial statement is accurate. If you’re not receiving any income including benefits they may want to know why. As entitlement to benefits may mean some people would no longer be insolvent if they were to access this income.

Without being able to see your full financial situation I can only speculate. Even then it is up to the OR once you’ve applied for Bankruptcy as to how the Bankruptcy will proceed and what checks they’ll want to do.

I’d suggest if you haven’t already it’d be worth getting tailored debt advice. If your current DMP provider isn’t able to offer advice on other solutions then you can always contact us for tailored debt advice based on your situation.

You could also contact the Insolvency Service who can provide information on Bankruptcy and what to expect from the process.

You can find our contact details here.

Thanks
Rachael

Butts wrote: »

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.

StepChange_Rachael

Hi

Thanks for your post.

Once a debt has defaulted then after a certain amount of time the creditor can take the debt through to court to set a County Court Judgement (CCJ). For them to do this they are required to send you a claim form to complete and send back. This claim form allows you to accept the debt and offer a payment or defend the debt. You’d have approximately 14 days to reply to this claim form.

For most people who don’t receive the claim form and a CCJ is set this is because the creditor doesn’t have the most recent contact details to send the information to. It falls to the debtor to update the creditor of any change in address.

From my understanding the CCJ issued after Bankruptcy shouldn’t have been added as I’d assume this was included in the Bankruptcy. Most debts are included in Bankruptcy, although there are some exceptions such as fraudulent debt and most student loans etc.

It’s possible if they were in the process of setting a CCJ then this could have overlapped with your Bankruptcy meaning the note was still added. However you should have received paperwork to respond to before the CCJ was set.

To dispute the CCJs on your credit file that you believe shouldn’t be there then you can contact the Trust Online and they’ll be able to advise you and to see if they can be removed.

I hope this helps.
Rachael

mum70 wrote: »

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

StepChange_Rachael

Hi

Thanks for posting.

I assume you are completing our online Debt Remedy tool. If so, where it asks solely about assets this would not include the property as there is a section specifically for properties owned or mortgaged.

The section that asks about the owned or mortgaged property will ask you to fill in information about how much is left to pay and the estimated value. It will also ask who’s named on the mortgage or deeds, you only, joint or a partner but not who resides in that property. So we can tailor this into our solution advice.

The only time a mortgage property debt would need to be entered in the list of creditors is when the house has been repossessed or sold and there is a short fall still owed to the mortgage company, as this would then become an unsecured debt.

If you'd like to discuss your Debt Remedy budget with us in more detail then you can find the details for the Debt Remedy support team when you log back in to your Debt Remedy budget.

You can log back in to your Debt Remedy budget here.

Take care,
Rachael

Delabodes wrote: »

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

Thanks for posting.

The HMRC do have more rights to collect for debt than most creditors so it’s important to find a way forward to deal with the debt and that it is going to be right for you.

For some people Bankruptcy would be a good solution but I’d strongly recommend looking at your options to see if there are alternative options available for you that may be more suitable. As Bankruptcy should be seen as a last resort.

In most situations if a supported solution can be put forward that shows an alternative route to Bankruptcy then it is likely this would be accepted and the HMRC wouldn't pursue Bankruptcy.

To be able to advise you on the best way to deal with the HMRC and suitable solutions then I’d need a good idea of your financial situation.

You can contact us for free and impartial debt advice. We’d be happy to discuss your options with you. You can find our contact details here.

Take care,
Rachael

Denpercy1 wrote: »

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 ?

mum70

Thanks Rachael for the help and posting back

StepChange_Rachael

Not a problem, happy to be able to help.

mum70 wrote: »

Thanks Rachael for the help and posting back

MissWinter

Hi, I am thinking about going bankrupt but my concern is that I have a car registered to me that I don't own.

My mother took the car finance out 2 years ago & has 2-3 years left on the agreement.

Can this car be taken even though I don't own it?

Thanks in advance

Yogibare77

Hi,

I had a debt with Nationwide many years ago and it is now with a debt recovery company and I am paying it with my DMP. Could I now open a basic account with Nationwide as the debt has been moved to a different company?

Former_StepChange_Richard

MissWinter wrote: »

Hi, I am thinking about going bankrupt but my concern is that I have a car registered to me that I don't own.

My mother took the car finance out 2 years ago & has 2-3 years left on the agreement.

Can this car be taken even though I don't own it?

Thanks in advance

Hi there

Thanks for your post and welcome to the forum.

Couple of things to consider here. What type of finance arrangement is the vehicle on? Is a it a loan that is being paid off? Or, is it a PCP, hire purchase arrangement or lease? With lease, PCP or hire purchase neither you or your mother would own the vehicle, it belongs to the finance company. If your mother is paying the agreement and the agreement is in her name, your bankruptcy will not stop her from paying this.

If the vehicle is being paid back through a loan it will be up to what the OR to decide what will happen.
It’s sometimes unclear who legally owns a vehicle. The OR will usually consider the owner of a vehicle to be the registered keeper, unless that person can show proof that someone else owns it. If someone else owns the car, the OR will expect you to provide evidence of who paid for it, plus confirmation that it’s still owned by the other person and that it wasn’t gifted to you.


Supposing the OR determines the vehicle does belong to you, the final thing they will consider is, is the vehicle essential for you? This is often the key to determining what an OR will decide. If it is essential, they may allow you to keep it. If it is deemed not essential, they may well look to realise the asset.



I hope this helps.



Richard

Former_StepChange_Richard

Yogibare77 wrote: »

Hi,

I had a debt with Nationwide many years ago and it is now with a debt recovery company and I am paying it with my DMP. Could I now open a basic account with Nationwide as the debt has been moved to a different company?

Hi there

Thanks for your message.

A DMP would not prevent you from openning a basic bank account so I assume you're wondering if the bank would be able to use the Right to set-off?

Right to set-off could only occur in this instance if the debt has not been legally assigned to the the debt recovery company.

If Nationwide have appointed this debt recovery company to collect the debt, but not transferred the debt to them, they could use the right to set-off as the debt still belongs to them.

It can often be hard to establish legal ownership of debt so it may well be safest to open a basic account with a different bank for now.

I hope this helps.

Richard