Bankruptcy or IVA?

ShopshireLad

Hello all, just after some advice please..
In 2009, I went bankrupt. My wife didnt. We had a joint mortgage.

Dial the clock on to now and she has for the past year been paying £20 a month to a company that Lloyds instructed to find her and keep the debt alive. She copped for a huge 120k mortgage shortfall.

She doesnt work, hasnt since 1996
She gets carers allowance and no other income.
All the houshold bills are met by me, we live in private rented
We have a joint account but all the money I earn is paid into a differnt account, we just move cash to the joint account as that is where our houshold bills are are admin'd

We realise that the 120k debt needs to be gotton rid of but is the best route an IVA or BR?

If she does go BR will the OR be taking a look at my earnings? Obviously after the pain of going BR in 2009, I dont want to have gone through that for nothing.. Thanks for reading.

ShopshireLad

found the advice on a similar thread (debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/) .. its BR for her...

ShopshireLad

Will my income be taken into account for anything to do with her BR?
Our car is in my name, I am the registered owner, I assume that will be safe?

Also we are foster carers, that all runs through me at HMRC but she obviously provides most of the care. That income is up and down and is zero at the moment. Thanks again...

ShopshireLad

Also, should she disentangle herself from our joint account first? In otherwords, revert that to a single account for me.. So many questions!

National_Debtline

Hello there,

The Official Receiver/trustee should only consider your wife's share of the household income. It may be useful for you to seek a bank account in your own name - as the joint one has the potential to be frozen by the bank. If there is an overdraft you would become solely liable for it once the bankruptcy order has been made. As the car is in your name it should be perfectly safe.

Hope this helps!

Best wishes,

David @ National Debtline.

ShopshireLad

Yes that helps thanks. Planning on switching our joint account to a single account in my sole name. Would that do the job? And no overdraft.. Im not allowed one.. I went BR in 2009 (we should have gone BR at the same time but got naff advice from the CAB) Playing catchup now.

National_Debtline

I'm sure you'll be able to get a sole account sorted easily. As a bankrupt person, you're wife should also be able to get a basic bank account - albeit only with a very limit choice of institutions.

- David.

ShopshireLad

yeah I got one easy enough, our own account was only locked down for a couple of days then was resurected as a basic account. so will just change it if i can to a sole account.. what about the fostering? Anyone have experience of that and BR? Does the OR look at the money paid in to the houshold for that?

Worcsman

Fostering and BR for those that this is of use to...
Got it from here...

http://www.insolvencydirect.bis.gov.uk/TechnicalManual/Ch25-36/Chapter31/part7/part3/part_3.htm#31.7.33

31.7.39 Income relating to foster care Where a bankrupt is in receipt of foster care allowance this should be treated as income and included in the income payments calculation. HMRC website at http://www.hmrc.gov.uk/individuals/foster-carers.htm confirms that where a child or young person has been placed with an individual by either a local authority or independent fostering provider, that individual is considered to be self-employed. Where total receipts exceed the qualifying amount (calculated by adding together a fixed sum per household and the amount per week received according to the number and age of the child/children fostered) tax is due on any surplus income above the qualifying amount (see website for further details on how this is calculated. If the foster carer is not in receipt of any surplus above the qualifying amount, no tax will be due.
When including such income in an income payments calculation it is necessary to establish whether the income is received jointly with another foster carer or whether it is received entirely by the bankrupt as sole foster carer, as this will make a difference to the amount of income available against which a calculation can be made. All expenses associated with the care of the children subject to foster care must also be considered in the calculation where the foster care income is included.


With a low income, carers allowance and half of a fluxuating foster care income, there isnt going to be much for the OR to have. If anything at all.