"Debts included in Bankrupcy"

user55

I've been reading lots of threads, as you do, and have come across the phrase "Debts included in bankrupcy" a fair few times. This implies that not all debts are included? Is this because some debts are exempt, ie student loans (thank goodness I don't have one of them to worry about!) or something else?

And while I'm on the subject (sort of!) who tells the creditors that you are bankrupt? do you do it yourself? Do they accept it and leave you alone then? And when is it time to open a new bank account? ASAP? Do you have to tell your new bank you are / about to be bankrupt? Do you think I'm not busy enough at work here?

pistonbroke

Not too sure about the debts included in the bankruptcy

But, your Official Receiver will inform the creditors, but is they ring up for payment you can tell them, doesn't always make them leave you alone though, depends on the creditor. Tell the Or you want to open a basic bank account and open it up as soon as you can after the BR, and by law you have to tell the bank.....

fermi

user55 wrote: »

I've been reading lots of threads, as you do, and have come across the phrase "Debts included in bankrupcy" a fair few times. This implies that not all debts are included? Is this because some debts are exempt, ie student loans (thank goodness I don't have one of them to worry about!) or something else?

I think this probably answers your question.

From:http://www.insolvency.gov.uk/guidanceleaflets/guidetobankruptcy/guidetobankruptcy.htm

7. How will bankruptcy affect you?

a. In relation to your creditors

If you are made bankrupt, you must not make payments direct to creditors. Creditors to whom you owe money when you are made bankrupt make a claim to your trustee (that is, either the Official Receiver or an insolvency practitioner). They should not ask you directly for payment; if you receive any requests, pass them immediately to your trustee to deal with and tell the creditor that you are bankrupt. There are some very limited exceptions to this non-payment rule. The main ones are:

* secured creditors, such as creditors who have a mortgage or charge on your home Note: If mortgage payments are not made, the lender may sell your home.
* non-provable debts, such as court fines and other obligations arising under an order made in family proceedings or under a maintenance assessment made under the Child Support Act 1991. Non-provable debts are not included in the bankruptcy
proceedings and you are still responsible for paying off such debts; and
* benefit overpayments, where the Department for Work and Pensions (DWP) can recover any benefit overpayments from any further benefits you receive.
* Student loans, since 1 September 2004 all outstanding student loans cannot be claimed in bankruptcy. They remain the responsibility of the (former) student to repay within the terms of the loan arrangement.
* If you were made bankrupt before 1 September 2004 you may still have to repay your student loan. Clarification should be requested from the Official Receiver who is dealing with your affairs.

Suppliers of services to your home (gas, electricity, water and telephone) may not demand from you payment of bills in your name which are unpaid at the date of the bankruptcy order. But they may ask you for a deposit towards payment for further supplies or could arrange for the accounts to be transferred into the name of your spouse or partner. You must pay continuing commitments such as rent (if you rent your home), together with any debts you incur after the bankruptcy.

It is worth have a good look through the fact sheets on http://www.insolvency.gov.uk

Richard_S

user55 wrote: »

I've been reading lots of threads, as you do, and have come across the phrase "Debts included in bankrupcy" a fair few times. This implies that not all debts are included? Is this because some debts are exempt, ie student loans (thank goodness I don't have one of them to worry about!) or something else?

And while I'm on the subject (sort of!) who tells the creditors that you are bankrupt? do you do it yourself? Do they accept it and leave you alone then? And when is it time to open a new bank account? ASAP? Do you have to tell your new bank you are / about to be bankrupt? Do you think I'm not busy enough at work here?

Hi user55

Debts not specifically included in bankruptcy are:

1. Student Loans
2. Fines imposed by the courts
3. Maintenance payments to an ex spouse (I think)

Council Tax seems to be a grey area. Some posters have reported that their local authorities have pursued them even after notice of bankruptcy. Our experience was that any outstanding council tax prior to the bky date was written off; given that most council tax is paid monthly in the majority of cases it only amounts to one month, as it was with us.

Utilities can be a grey area. They can be included but posters have also reported that when they are the utility company insists on a meter system being installed, the most expensive way to pay of course. Our gas and electricity bills were due (well overdue) for payment and paid before our bky date so we didn't include them and the O.R never queried it.

You are obliged to tell your bank that you've been declared bankrupt but the O.R usually does this anyway. Some banks will let you operate the account post bky, others won't. If you open one of the basic accounts before bky they should not be affected. I had my salary paid into our daughters account before bky and then opened an new account after the date.

Hope this helps and the previous posters have answered your other questions.

Richard

user55

Sorry to keep asking all these questions, the more I read the more questions I have!

Thanks for your patience!

Richard_S

user55 wrote: »

Sorry to keep asking all these questions, the more I read the more questions I have!

Thanks for your patience!

Ask away user55,

It's more rewarding than washing my rusty old car

Richard

AlanD_3

CCCS were able to advise us during our meeting with them.

saver_sam

From a Book called IVA Bankruptcy and other debt solutions: The Definitive Guide by James Falla

Debts are divided into 'dischargable debts' which are covered by bankruptcy and 'non-dischargeable debts' which are not.

General guidelines are listed below.

DISCHARGEABLE DEBTS include:
- Inland Revenue and VAT bills
- Unsecured Loans
- Credit card ebts
- Legal, Medical and Accounting bills
- Unpaid bills, including catalogue accounts and store cards
- County Court Judgments (CCJs)

NON-DISCHARGEABLE DEBTS include:
- Debts to the Students Loans Company
- Fines and penalties
- Secured debts and loans with collateral
- CSA claims for child support and other family/domestic legal liabilities
- Most educational loans which fall outside of the Insolvency Act 1986

user55

All my debts come under dischargable then so I'm ok there, thank god for small mercies!

Just going through my statement of affairs, trying to get it right ready for talking to CCCS / CAB and I'm a bit perplexed about what to put for my salary. I've worked out an average over the last 12 months, which is £1591, but that includes some much higher and some much lower months. And clearly I have to meet my monthly bills whether it's an £1100 month or an £1800 month! Should I just say the average, or mention the range?

Also, for partners salary, that's messy too! He is self employed, work is variable, and currently in short supply, and in fact he is in a payment arrangement with a couple of his creditors, including the Inland Revenue. I feel if I start putting anything to do with his finances is going to really muddy the waters, and since he is currently unable to contribute much at all to the household finances, can I just leave him off?

Richard_S

user55 wrote: »

All my debts come under dischargable then so I'm ok there, thank god for small mercies!

Just going through my statement of affairs, trying to get it right ready for talking to CCCS / CAB and I'm a bit perplexed about what to put for my salary. I've worked out an average over the last 12 months, which is £1591, but that includes some much higher and some much lower months. And clearly I have to meet my monthly bills whether it's an £1100 month or an £1800 month! Should I just say the average, or mention the range?

Also, for partners salary, that's messy too! He is self employed, work is variable, and currently in short supply, and in fact he is in a payment arrangement with a couple of his creditors, including the Inland Revenue. I feel if I start putting anything to do with his finances is going to really muddy the waters, and since he is currently unable to contribute much at all to the household finances, can I just leave him off?

Hi user55,

Your SOA is not a piece of mathematical theory; it can't ever be exact. It's just an indication and always subject to review. I would put your average earnings figure and if your O.H doesn't make any contribution to the household expenses then don't include him/her.

The O.R will go through it with you and make any necessary amendments. You'll also be able to explain the situation re your O.H's self employment and let the O.R advise. The whole procedure is something of a "horse trading" process so nothing you put down now will be necessarily permanent.

Richard

fermi

Richard_S wrote: »

The whole procedure is something of a "horse trading" process so nothing you put down now will be necessarily permanent.

Absolutely!

The SOA serves two purposes in a practical sense.

Firstly, to allow the judge to see that your financial position is untenable.

Secondly, to provide a starting point for the OR. If you were expected to cover everything down to the smallest detail, then there would be no need for an OR interview.

In other words, just put it all down as best you can.