Wife's bankruptcy and MY benefits

Liquid_Stool

hey all,

firstly how big has this part of the forum got since March!??

My wife has 30k worth of debts and CAB recommended bankruptcy. I've completed the forms online just about and have come to the part about income. My question goes like this:

My wifes debts are nowt to do with me, they're all in her maiden name. She is a "homemaker" and as such recieves no wages. I am a full time carer for my disabled child, so i do not work. My daughter is 10 and recieves DLA (about £220 a month) This money is hers, paid to me for things SHE needs - we never spend this money- it belongs to my daughter.
I recieve Carers allowance - currently 87quid a week, and income support for me, my wife and two kids. My question is, when filling in the forms, do i have to declare my daughter's disability living allowance? do i have to declare MY carers allowance? I think not because none of it goes to my wife, none of the claims are in her name. I appreciate that she is entitled to a percentage of the income support. I ask because if we're not paying hundreds of pounds a month out on HER DEBTS, we are actually pretty well off at the end of the month. I am concerned that the OR could make a payments order using what is essentially MY and my daughter's benefits.

Any swift, non judgemental advice would be great as the vultures are on the phone every two minutes, stuffing my letterbox with final demands and got the debt collectors hanging about...

One other question, should 'er indoors actually answer the phone to these people and tell them that she's going bankrupt or could they throw a spanner in the works if they find out about her cunning plan???:rolleyes:

thanks all

allofadither

Hello,

I'll be as swift and non judgemental as I can about stuff I know about...and leave the stuff I know nowt about to others.

No point in your wife mentioning her impending BR to the creditors, it won't make a jot of difference to their behaviour until the deed is done.

If your wife does not actually have an income then put 'Nil' to that particular question. I didn't have an income either except for child benefit which I did put down.

I'm not sure which of the benefits you should include, someone else will clarify that one.

But the amount to put in the section on what other people contribute to the household income (when you know which if any of the benefits to include) should only be what you actually contribute to cover the household living expenses...not what is or might be paid to your wife's creditors.

Hope this helps a bit...but keep asking if it doesn't.

gettingitsorted

iv never found a deffinate answer to which benifits are classed as income and which are not ,it maybe worth e mailing the insolvency service to clarify .

as for informing creditors its really not worth it as they will not believe you to put it bluntly

fermi

I'm pretty sure that since bankruptcy is a personal thing, that it is only yours wife income that is assessed.

And the following would apply anyway, as the only household income is benefits. You have nothing to worry about.

31.7.9 State benefits

An IPA should not be sought where the bankrupt's only or main source of income is state benefit payments without any other significant source of income [note 3]. This applies even in the rare circumstances where the official receiver's analysis of the bankrupt's income and expenditure discovers sufficient surplus for an IPA arising as a result of the income received by the bankrupt which either solely or chiefly comprises state benefits. The official receiver should consider that it is always open to the bankrupt who wishes to contribute, to make voluntary payments. If the bankrupt was minded to contribute on a voluntary basis, having been informed that their income appeared to be sufficient to produce a surplus taking in to account their reasonable domestic needs, a voluntary agreement could be incorporated into an IPA, but it would have to be clearly noted that no enforcement action would be taken if the bankrupt failed to make agreed voluntary repayments.

This does not mean that the official receiver must exclude all benefit payments received by the bankrupt when calculating available income for an IPA. The person making the calculation (usually the examiner) should first consider whether there is income paid to the bankrupt not comprising state benefit . If this is the case, an IPA may be a possibility, and any calculation of income should include all available income, including state benefits which are paid to an individual for the general benefit of that individual and their family. The notable exceptions to this rule when dealing with state benefits are disability living allowance (which is not considered by the Department of Work and Pensions to be income) and child benefit. The High Court has stated as a matter of public policy that child benefit and similar benefits should not be included in the statement of income when applying for an IPO and there is no reason why this point should not be extended to cover IPAs. Whilst it is acknowledged that in the figures for expenditure there may be outgoings for the benefit of the children, at least to the value of the child benefit received, to ensure that there is no risk of them being deprived of it, child benefit should not be included in IPA assessments. The Department of Work and Pensions website provides useful information regarding allowances and benefits currently in force and can be accessed at http://www.dwp.gov.uk/

Where the bankrupt is in receipt of benefits and other sources of income, the total income should be established (see other income sources at paragraph 31.7.7) and the bankrupt's reasonable expenses deducted (see paragraph 31.7.19). An assessment can then be made as to whether the bankrupt is in receipt of income surplus to his/her reasonable domestic needs. If there is a surplus of income, this surplus should be less than or equal to income from the source other than benefits in order for an IPA to be sought. It should be remembered that whilst the bankrupt's total income including state benefits should be included in the calculation of surplus income, it is the income from sources other than the benefit(s) which is providing the payments under the IPA/IPO, the surplus income from which an IPA is sought should not be comprised of state benefit

It won't matter if she tells the [STRIKE]vultures [/STRIKE] creditors, since what can they do. It's all bluff as far as they are concerned.
Even in the worse case where they get a CCJ, the judge couldn't order you to pay on your income, and it would be wiped out by the BR.

Save for the fees, and go for it.

gettingitsorted

Fermi

when i went BR i was not working but i still had to declare my husbands earnings in the amount partner contributes section.

fermi

gettingitsorted wrote: »

Fermi

when i went BR i was not working but i still had to declare my husbands earnings in the amount partner contributes section.

hmm...

Q.6.7
Details of amounts that other members of the household contribute each month to the household expenses need to be recorded. If you do not include the contribution of all members of the household you will be unable to claim the full amount of household expenses in the assessment for an income payments order/income payments agreement.

I took that to mean that they only use this figure to make sure that I&E is being shared fairly, but I could be wrong.

gettingitsorted

Sorry hun i miss understood what you ment ,i though you ment liquid should not put his contribution down on the forms

Liquid_Stool

ok, a big thx to all who responded. An extra big thanx and a big sloppy wet one on the kisser go to FERMI for the detailed and long reply - very very useful thx!

If i understand FERMI's quote the following applies:

Because We only recieve benefits, an IPA cannot be applied for by the OR. The missus could if she wanted to (with my money) make a voluntry repayment but even if she defaulted, there is no legal recourse.

As no other members of the household contribrute anything, there's another reason for them not to get anything.

It quite clearly states that DLA and CB cannot be touched in an IPA/O.

I think we're home free!

One last thing, so when i fill in the form about the income section, do i actually DECLARE everything we get, or put nothing and only mention it if it's brought up?

thanks again £savers:beer:

allofadither

My personal opinion is to declare it, but as I say it's only my personal feeling. And I say that because I think
(a) it shows you are not hiding stuff from them
(b) you have to live off something, so if you show the benefits then the OR won't suspect you/your wife has another hidden source of income.

I'm sure others will give you their own take on this one.

fermi

You must do, as the questions on the forms are:

6.3 What is your average monthly take-home
pay (include, for example, overtime,
commission and bonuses).

6.6 Do you receive any other income,
including state benefits or tax credits?
If Yes, state from what source (for
example pension, state benefits, part-time
earnings) and how much you receive
each month?

6.7 How much do other members of your
household contribute each month to
the household expenses?

6.8 Total household income
(Q6.3 + 6.6 + 6.7)

The OR will check, and them double check (in a good way) in your circumstances.

Liquid_Stool

got this response yesterday from the insolvency people Dear Mr McAdams

Thank you for your email yesterday.

As your wife has no income she will not be expected to make payments under
an Income Payments Agreement or Order (IPA/IPO). She will have to list the
household income and should list everything you have mentioned, stating what
it is for. None of it will be classed as income from the point of view of
an IPA/IPO.

I hope this is helpful.

So we're home dry!

once again thx 4 ur help everyone!:beer: