Bank account restrictions and letting to buy.

melissa-elizabeth

I went bankrupt at the beginning of February and nearing half way through my bankruptcy year, I have a few questions. My official bankruptcy letter stated that, providing I keep my account below £1000, the OR had no problem with my bank keeping my account open (LILA). I’m only making £800 a month at the moment doing my basic hours (part time), so this is no problem. I’m assuming that this condition is just for the bankruptcy year? I’m asking because I really want to start overtime next year after February and look for a flat of my own. (I currently share), and my overtime will take my income above £1000 some months depending on how much overtime I get that month. I also want to start college next year (September 2015) and then Uni the year after that (Nursing), but I’ll still be working part time over the weekend, which again will take my monthly income over £1000. If it is just for the year, what do I need to do to allow the bank to let me have more than £1000 a month in my account after my OD? Does the OR contact the bank? Will I get a letter in confirming my discharge that I can take into my bank for them to lift the restriction on my account? I am aware that it will still be a basic bank account for the full six years, but surely I will be allowed to start earning more than £1000 once my year is up in Feb?




An old landlord recently got in touch with me asking if I was interested in buying or letting a property he has available at the moment. I lived in one of his flats before and only moved out due to a relationship breakdown and I couldn’t afford the rent myself (it was just in the middle of my spending and depression spiral). The flat is absolutely gorgeous and he owns three in the same block, but obviously I’m not in the position at the moment to afford a place myself so I asked him to get in touch with me after Feb if he has anything available, which he said he was happy to do so. He obviously doesn’t know about my bankruptcy and I do plan on being open and honest with him when he gets in touch with me again. He is a good man and paying rent was never an issue with me so I’m assuming he’ll be alright with it providing I pay rent in advance, which I have no problem with. My question here is that he seemed to be hinting at me renting to buy in his last e-mail. How would that work for me in relation to my bankruptcy? I would definitely be interested in buying as the flats he owns are all stunning, but how would the deposit work? Would the first few years of the rent I pay him be used as a deposit? How soon after bankruptcy can you apply for a mortgage? Obviously he might not be too keen on selling me the flat once he learns of the bankruptcy, but I am trying to keep an open mind and trying to get suggestions of how it can work if he hits me with it again even after learning that I am bankrupt.


I feel totally stuck in a rut at the moment and I really want to turn my life around so I’m hoping to start once Feb comes around. This has been the longest year of my life so far, but I only have myself to blame really!



Any replies are appreciated.



Thanks.

melissa-elizabeth

*Bump* Can anyone offer any advice?

National_Debtline

Hello there,

It may be worth seeking clarification from the Trustee about the bank issue. Many of our callers open a new account once they have become bankrupt - though there are only a few banks that would take you on (Barclays is one example).

You could be asked to pay any disposable income to your Trustee for three years. This would be the money you have spare once you have accounted for all essential outgoings such as housing costs, food, travelling costs and other bills. You can read more about that here.

You would need to speak to the new landlord about the deposit situation but I would be surprised if they would allow you to use 'rent' payments towards a deposit. In addition, you may find it difficult to source a mortgage until the bankruptcy has fallen off your credit file - do seek financial advcie to get the very best deal.

Very best wishes,

David @ National Debtline.

wildheart83

I too went LILA BR, and the £1000 refers to account balances. I was earning more than £1000 per month, but my DDs were set up so that the day I got paid my living expenses also left the account so I didn't have my full salary for long. I would check with the AIB first but I certainly didn't get in bother for having a few quid more than £1000 in my account for a short period of time.

You would need to ask the landlord what his expectations are, I don't believe they would rent it out, then use that rental income as a deposit but I might be wrong. Without a hefty deposit you'll struggle getting a mortgage any time soon. Im 3 years post discharge and could only get a basic bank account when I set up my company recently.
Good luck x