IO & state benefits?

Woodsy60

Hiya this is my first post and I am at my wits end.

My wife and I have two children still living at home and we live in council accommodation.

We are both long term disabled and have state benefits and DLA (both) as our only income. We have no savings. My wife has various illnesses and has had open heart surgery. I too have various illnesses and I am awaiting a serious operation.

We use my wife's DLA allowance for a motorbility car as we both have to regularly travel 40 miles to London for regular hospital appointments and countless local ones etc.

We have both been advised to file bankruptcy separately and to pay a token payment of £1 to each of our creditors for unsecured loans until we have saved enough for the two lots of £525 IO's fee, which we are doing.

Sorry to be so long-winded but my question is how much of the state benefits/DLA will the IO use to pay the creditors and how long will this last?

Stepchange have advised bankruptcy and that a DMP is not an option as due to to the nature of our disabilities our circumstances will not change.

We are not bad people it is just that debts got out of hand because of circumstances that we could not control.

Bankruptcy could help get our lives back on track.

Thank you

alltaken

State benefits are exempt from a income payment arrangement/order. If you have surplus expenditure available on your outgoing a don't worry, it's not going to be taken.

dojoman

You will not be expected to pay anything as all of your income is from benefits.

Woodsy60

Can I thank you both so much for taking the time to reply.

Thank you.

fermi

The OR's guidance manual states that:

"As a matter of public policy, official receivers should not seek an IPA, or IPO, where the bankrupt's sole source of income is state benefits. No calculation of real disposable income need be made in such cases."

Woodsy60

I forgot to add something in my original post because I had forgotten about it until my wife reminded me.

I am also in the process of going through a claim for Industrial Deafness. I have had all the hospital tests and experts tests that show that my hearing was damaged because for over a decade I worked in a VERY noisy work environment totally without any hearing protection. It has been shown I have noised induced hearing loss and tinintus. My question is will ALL damage award go towards the creditors?