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Advice on bankruptcy, trustees, payments and costs please
SDzone
Posts: 2 Newbie
Please can someone give me some advice about bankruptcy and trustees.
My girlfriend was made bankrupt a little over a year ago. (By a £3500 debt which she had disputed in the first place but the company refused to work with her, court date was set, then changed at the last minute, girlfriend was very sick due to medications etc and missed the letter with the changed court date. long storey but it ended in them making her bankrupt). This was her only debt.
When my girlfriend went to see the receiver, she requested figures of how much it would take to clear the money owed for the bankruptcy. She was not given these figures.
Two months later she received a letter from the trustees saying they had been appointed over her case. My girlfriend sent the the information they requested, and also requested figures for how much it would take to clear all the debts to sort out her bankruptcy. These figures were never sent to her and she then did not hear anything further from the trustees for about 9 months! (As best as we can tell, they had a number of staff changes during this time and it seems like her case simply got left to the side)
A couple of months ago the trustees contacted her saying they were going to sell her house to sort the debt and costs. This was their first contact for about 9 months. They wanted her to reply within a week. When she contacted them, the person who she needed to talk to had gone on leave for half of that week!
She spoke to someone else who then gave her 21 days to decide whether someone would pay the debt and costs for her, or whether the house would be sold. This person said on the phone the total amount needed to clear everything was about £20,000. (when my girlfriend again told him that no one had yet given her any costs)
The guy promised to send her the figures. Two weeks later my girlfriend phoned them and said she had not received the figures so could not make a decision as she had no idea how much was involved. It took a little over a week after that for them to finally send her a break down of fees and costs. I find it strange that they give her three weeks to give an answer, but then take longer than that to send her the figures she needs to give an answer!
This break down of costs was around £30,000 (considering she had been quoted £20,000 a couple of weeks before, we were totally shocked)
These costs included around £16,000 of trustees fees!
Also two DTI fees which total around £7000.
Can someone explain what the DTI fee is please?
Now, I am quite shocked as I am not quite sure how it can be legal to add on £16,000 in fees. I know bankruptcy incurs costs, but those figures seem absurd for a single £3500 debt. The remaining amount is made up of the original debt, court costs etc.
Also there is a charge there for interest. I don't see how it can be right to charge us interest when they failed to contact us back for 9 months to sort this whole situation. They have charged us interest for that period!
My girlfriend jointly owns her house with her ex husband. So only half of the house is classed as hers.
Also when my girlfriend first went to the receiver when she was initially made bankrupt, she mentioned she had a car. They possessed her car (came to her house and took it). However all records of this car seem to have completely disappeared and it is not reflected in the figures finally sent to her by the trustees. The car was not worth a huge amount, however even if they decided it was worthless, how can it be right for them to keep it and not deduct something from the figures owed? If they took her car, there should be some sort of reflection in the figures going down, even if by a relatively small amount!
This was now over a year into her bankruptcy!
Finally, does anyone know whether trustees accept payments to cover the bankruptcy costs. We do not want her to lose her house. She has kids, and will have major problems financially if she loses this house and has to find a place to rent.
I am wanting to try to pay the bankruptcy for her (however would rather pay the £20,000 figure we were given rather than the £30,000 one which suddenly appeared!)
My girlfriend is concerned that if she contacts the trustees saying she has someone who wants to pay the costs and debt, without having to sell the house, that they will want payment within 21 days or something, which I am unable to do that quickly. Does anyone know if trustees are supposed to accept monthly payments, or if they expect the full amount paid in one go?
Finally, people may suggest we get a solicitor. However considering she has already lost everything and is now facing losing pretty much all of her share in the house, I'm not really sure how we can pay solicitors fees and then pay the money owed too! Any advice?
Thank you, I appreciate your help
My girlfriend was made bankrupt a little over a year ago. (By a £3500 debt which she had disputed in the first place but the company refused to work with her, court date was set, then changed at the last minute, girlfriend was very sick due to medications etc and missed the letter with the changed court date. long storey but it ended in them making her bankrupt). This was her only debt.
When my girlfriend went to see the receiver, she requested figures of how much it would take to clear the money owed for the bankruptcy. She was not given these figures.
Two months later she received a letter from the trustees saying they had been appointed over her case. My girlfriend sent the the information they requested, and also requested figures for how much it would take to clear all the debts to sort out her bankruptcy. These figures were never sent to her and she then did not hear anything further from the trustees for about 9 months! (As best as we can tell, they had a number of staff changes during this time and it seems like her case simply got left to the side)
A couple of months ago the trustees contacted her saying they were going to sell her house to sort the debt and costs. This was their first contact for about 9 months. They wanted her to reply within a week. When she contacted them, the person who she needed to talk to had gone on leave for half of that week!
She spoke to someone else who then gave her 21 days to decide whether someone would pay the debt and costs for her, or whether the house would be sold. This person said on the phone the total amount needed to clear everything was about £20,000. (when my girlfriend again told him that no one had yet given her any costs)
The guy promised to send her the figures. Two weeks later my girlfriend phoned them and said she had not received the figures so could not make a decision as she had no idea how much was involved. It took a little over a week after that for them to finally send her a break down of fees and costs. I find it strange that they give her three weeks to give an answer, but then take longer than that to send her the figures she needs to give an answer!
This break down of costs was around £30,000 (considering she had been quoted £20,000 a couple of weeks before, we were totally shocked)
These costs included around £16,000 of trustees fees!
Also two DTI fees which total around £7000.
Can someone explain what the DTI fee is please?
Now, I am quite shocked as I am not quite sure how it can be legal to add on £16,000 in fees. I know bankruptcy incurs costs, but those figures seem absurd for a single £3500 debt. The remaining amount is made up of the original debt, court costs etc.
Also there is a charge there for interest. I don't see how it can be right to charge us interest when they failed to contact us back for 9 months to sort this whole situation. They have charged us interest for that period!
My girlfriend jointly owns her house with her ex husband. So only half of the house is classed as hers.
Also when my girlfriend first went to the receiver when she was initially made bankrupt, she mentioned she had a car. They possessed her car (came to her house and took it). However all records of this car seem to have completely disappeared and it is not reflected in the figures finally sent to her by the trustees. The car was not worth a huge amount, however even if they decided it was worthless, how can it be right for them to keep it and not deduct something from the figures owed? If they took her car, there should be some sort of reflection in the figures going down, even if by a relatively small amount!
This was now over a year into her bankruptcy!
Finally, does anyone know whether trustees accept payments to cover the bankruptcy costs. We do not want her to lose her house. She has kids, and will have major problems financially if she loses this house and has to find a place to rent.
I am wanting to try to pay the bankruptcy for her (however would rather pay the £20,000 figure we were given rather than the £30,000 one which suddenly appeared!)
My girlfriend is concerned that if she contacts the trustees saying she has someone who wants to pay the costs and debt, without having to sell the house, that they will want payment within 21 days or something, which I am unable to do that quickly. Does anyone know if trustees are supposed to accept monthly payments, or if they expect the full amount paid in one go?
Finally, people may suggest we get a solicitor. However considering she has already lost everything and is now facing losing pretty much all of her share in the house, I'm not really sure how we can pay solicitors fees and then pay the money owed too! Any advice?
Thank you, I appreciate your help
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Comments
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Can anyone help with advice please?
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Hi - This is a complex question and I'm not able to offer any firm advice. Having a BR set aside is a tricky thing to do and the costs of the OR /IS service are massive so the costs are not really a surprise.
The issue with the car does seem strange though. I would recommend a call to StepChange or National Debt line - they are both free and offer expert advice.
I would raise a formal complaint with the OR's office if you cant get any explanation/info from the OR0 -
Can anyone help with advice please?
Hi really sorry for whats you and your other half are going through sorry i cant offer advise as i don't have much info on bankruptcy
What isn't clear to me is that if she has filed for bankruptcy then why does she still have to pay the debt?, i thought once a person goes bankrupt they are clear/liable of any debts and do not need to pay anything back at all
sorry for my naive question“People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”
Rat Race0 -
OP, it's not really clear what you are asking.
On first reading, it sounds as if you are asking how to 'recall' (Scottish term) or 'annul' the bankruptcy.
In simple terms, the result of a recall/annulment would be as if the bankruptcy never happened. However, to get to that point, you'd have to pay all the debts owed at the date of bankruptcy (not just the one owed to the creditor who made you bankrupt); the interest accrued on those debts since the date of bankruptcy; and all the costs and fees incurred by the OR/Trustee.
Is that actually what you are trying to do? If not, can you explain a bit more.
If you don't want to go to a solicitor, have you tried going to CAB? Just to make sure that you understand how bankruptcy works.0 -
Hi i may not be the bearer of good news but i hope i can answer some of your questions.
I was made bankrupt in 2010 by lowells for £3500 for a previous catalogue i had.
I spoke with Lowells to negioate a payment plan they wanted £2000 up front then monthly payments hence they served notice for bankruptcy.
When meeting with the OR she said she would be passing it to the Trustees as there was equity in the house.
I was informed that i was to keep paying my mortgage which was up to date with no arrears and my other smaller loans and credit cards etc which were also up to date i was no longer able to pay as they would be included in my bankruptcy.
She advised me to see a solictor who dealt with bankruptcies.
My ex and i had equity we had lived in the house for 20 years and i had 4 teenage children.
The Solictor requested a total from the Trustees and i waited about 3 months to recieve it.
My total debts including Lowells and the ones i was not allowed to continue paying total was £10,000 not including my mortgage.
There fees were then added and at the time were £15,000.
Don't be fooled into these being the final fees because they are "not".
The Trustees instructed the house to be sold, my solictor advised me to request to the Trustees if we could sell the house and not them as this would save costs.
They agreed and i had to provide a monthly update.
When the house sold i then had to wait a further five months before i received the balance of the estate after everything was paid. As they put another notice in the London Gazette.
My husband received his half on completion of the sale
So in answer to your question re costs i paid the following
Trustees - £19.500
Officer Reciever - £4,000
Secetary of state - £12,500
additional Interest to Lowells and other creditors £6000
(Plus the £10,000 total)
Solictors costs - £400
my share of estate agents costs (other paid by ex) £1,900
I was left with enough money for deposit and first months rent!!
I am debt free and still living with my kids in rented, if i went for annullment the Solictors charge would have been £2000 on top which i didnt have money left for.
Like you say a lot of money for a £3500 debt but it is a debt and i owed it no matter what reasons i could not pay it.
I understand your anger but you need to support your girlfriend through this i to was angry about the process and its to long to go into detail.
My kids were my rock and supported me althrough i can't thank them enough.0 -
the_follower wrote: »Hi i may not be the bearer of good news but i hope i can answer some of your questions.
I was made bankrupt in 2010 by lowells for £3500 for a previous catalogue i had.
I spoke with Lowells to negioate a payment plan they wanted £2000 up front then monthly payments hence they served notice for bankruptcy.
When meeting with the OR she said she would be passing it to the Trustees as there was equity in the house.
I was informed that i was to keep paying my mortgage which was up to date with no arrears and my other smaller loans and credit cards etc which were also up to date i was no longer able to pay as they would be included in my bankruptcy.
She advised me to see a solictor who dealt with bankruptcies.
My ex and i had equity we had lived in the house for 20 years and i had 4 teenage children.
The Solictor requested a total from the Trustees and i waited about 3 months to recieve it.
My total debts including Lowells and the ones i was not allowed to continue paying total was £10,000 not including my mortgage.
There fees were then added and at the time were £15,000.
Don't be fooled into these being the final fees because they are "not".
The Trustees instructed the house to be sold, my solictor advised me to request to the Trustees if we could sell the house and not them as this would save costs.
They agreed and i had to provide a monthly update.
When the house sold i then had to wait a further five months before i received the balance of the estate after everything was paid. As they put another notice in the London Gazette.
My husband received his half on completion of the sale
So in answer to your question re costs i paid the following
Trustees - £19.500
Officer Reciever - £4,000
Secetary of state - £12,500
additional Interest to Lowells and other creditors £6000
(Plus the £10,000 total)
Solictors costs - £400
my share of estate agents costs (other paid by ex) £1,900
I was left with enough money for deposit and first months rent!!
I am debt free and still living with my kids in rented, if i went for annullment the Solictors charge would have been £2000 on top which i didnt have money left for.
Like you say a lot of money for a £3500 debt but it is a debt and i owed it no matter what reasons i could not pay it.
I understand your anger but you need to support your girlfriend through this i to was angry about the process and its to long to go into detail.
My kids were my rock and supported me althrough i can't thank them enough.
Sorry to hear about your bankruptcy
Im just shocked at all the cost's involved for the sake of £3,500 i know it may sound odd but wasent it possible for you to borrow the money from you ex or from friend's and family the reason i ask i fear that the op will also incur all these costs for a very small debt in comparison to the damage it can do financially and emotionally“People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”
Rat Race0 -
Hi
Lowells were adament they would not go into a payment plan until i paid £2000 upfront which i didnt have.
When i recieved the first notice saying they were going to file for bankruptcy the envelope was addressed to me but the letter had someone elses name on. They had a company hand deliver it i contacted the company who said that it still applied because the envelope was addressed to me ??
When the other letter came the court address, time and date are so faint you can't read them. I contacted Lowells who refused to speak with me as they had filed for bankruptcy and the company that delivered it said they could not get involved they only deliver the letter.
*stupidly* i thought that the court would rearrange the day as i hadnt showed up. But i couldnt show up as i couldnt read the details.
The court issued my bankruptcy in my absence, that sealed my fate as my other creditors who i had been paying then got included in my bankruptcy.So then to get a loan i would have to clear all the balances which then become £10,000 and then on top was the OR fees.
I could not apply for a loan as i was bankrupt, i was to ashamed to ask family.
Companies knocked at my door "hearing" of my bankruptcy offering secured loans on the house at high repayments.
All this was two weeks before the christmas.
The only way to stop the house being sold was to take a secured loan. That would have meant years in further debt.
I declined this.
I only wish i had found this forum at the time because i would have had a better understanding.
On the emotional side it was the loneliest time in my life.0 -
the_follower wrote: »Hi
Lowells were adament they would not go into a payment plan until i paid £2000 upfront which i didnt have.
When i recieved the first notice saying they were going to file for bankruptcy the envelope was addressed to me but the letter had someone elses name on. They had a company hand deliver it i contacted the company who said that it still applied because the envelope was addressed to me ??
When the other letter came the court address, time and date are so faint you can't read them. I contacted Lowells who refused to speak with me as they had filed for bankruptcy and the company that delivered it said they could not get involved they only deliver the letter.
*stupidly* i thought that the court would rearrange the day as i hadnt showed up. But i couldnt show up as i couldnt read the details.
The court issued my bankruptcy in my absence, that sealed my fate as my other creditors who i had been paying then got included in my bankruptcy.So then to get a loan i would have to clear all the balances which then become £10,000 and then on top was the OR fees.
I could not apply for a loan as i was bankrupt, i was to ashamed to ask family.
Companies knocked at my door "hearing" of my bankruptcy offering secured loans on the house at high repayments.
All this was two weeks before the christmas.
The only way to stop the house being sold was to take a secured loan. That would have meant years in further debt.
I declined this.
I only wish i had found this forum at the time because i would have had a better understanding.
On the emotional side it was the loneliest time in my life.
Thanks for sharing you experience i cant imagine how you must of felt going through all this all on your own. it's not fair that the court made you bankrupt without hearing your side of the story
What it seems like is that all the relevant party's involved and milking it by charging unfair fees at the expense of vulnerable people.
Do you think you will ever get back on the property ladder in the future even if it's a small flat or something? I hope the OP can get the problems they are going through solved before the worst happens“People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”
Rat Race0 -
Hi SD,
Thanks for your PM. I'm afraid that none of what you describe surprises me. Others have already given the answers regarding how the costs in bankruptcy bear no resemblance to the original debt.
I'm afraid there is little or nothing you can do about the situations you have raised. IPs can and do charge outrageous fees for doing very little, and the insolvency service and the Secretary of State take their cut too.
Sadly, unless all of the bankruptcy debts and costs can be paid by another means - the property will be sold to realise the bankrupts share.
DDDebt Doctor, Debt caseworker, Citizens' Advice Bureau .
Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***0
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