Any advice on a few questions!!!

LeicesterT

Hi,

Long time lurker and reader of this forum and going to go bankrupt soon but I have a couple of questions that people might be able to help with, I’ve already had a few answers via pm and thanks again for those

Basically I’m a recovering gambler- not bet since October now and going to therapy and counselling

I feel that I’m addressing the gambling but it’s left my finances very bad

From what I gather my employer may find out I’m bankrupt as I will have an NT tax code, if I go bankrupt in March then will this only be for one month?

Also from what I gather all debts will be written off and it will be (despite restrictions) a fresh start or can banks chase debts after bankruptcy?

I’m £48k in debt- all personnel credit or loans from 3 banks- we rent a house and my wife owns one she rents out - nothing to do with me and I’m not on the deeds.
Infact all our finances are seperate - we never got round to having a joint accounts and when I lost a little bit of money due to gambling in the past my wife decided we wouldn’t tie our finances together (she’s smarter than me that’s for sure)
I work full time and she does part time and our income is pretty much the same as our outgoings with rent bills and nursery fees

I’ve stopped paying my personal debts since November and have had defaults and don’t want to obtain credit again anyway as this will help not gamble.

Just wanted to know what realistic restrictions I can expect if I’m honest to OR about my gambling and when they look at the accounts they will see it’s all because of that...

Is it better to go bankrupt before April so I’m not on a zero tax code for long and then Work probably won’t realise? Or will they be informed anyway?

Thanks in advance for any comments before I push the button, other than my parents being worried about the stigma I can’t see any downside to going bankrupt at all
Just wanted to get some opinions on the matter in case I’m missing something

TheGardener

LeicesterT wrote: »

… From what I gather my employer may find out I’m bankrupt as I will have an NT tax code, if I go bankrupt in March then will this only be for one month? Its worth a shot - Feb or March will be too close to the end of the financial year for the OR to bother with the NT code so no guarantees but...

Also from what I gather all debts will be written off and it will be (despite restrictions) a fresh start or can banks chase debts after bankruptcy? No - all unsecured debts will fall into the BR - no one can chase pre-BR debts.

I’m £48k in debt- all personnel credit or loans from 3 banks- we rent a house and my wife owns one she rents out - nothing to do with me and I’m not on the deeds. Infact all our finances are seperate - we never got round to having a joint accounts and when I lost a little bit of money due to gambling in the past my wife decided we wouldn’t tie our finances together (she’s smarter than me that’s for sure)Good move
I work full time and she does part time and our income is pretty much the same as our outgoings with rent bills and nursery fees...

Just wanted to know what realistic restrictions I can expect if I’m honest to OR about my gambling and when they look at the accounts they will see it’s all because of that...

Is it better to go bankrupt before April so I’m not on a zero tax code for long and then Work probably won’t realise? Or will they be informed anyway? No reason for them to be informed - they are not 'informed' by the OR - its just that the NT code can raise an eyebrow - even though there are a number of reasons why an NT code can be given besides BR

Gambling is not a guaranteed BRO (Bankruptcy restriction order) but it quite likely you will get one.

LeicesterT

So there maybe a chance that the OR wouldn’t put me on a NT tax code at all?

If my soa shows that I have a shortfall by around £20 a month (which I plan to try to make up by shopping a little smarter) rather than any surplus for them to take what happens then?

TheGardener

An SoA should be an actual snapshot of your finances as they are when you complete it. A small negative balance wont be a biggie but a large shortfall on essential expenditure will ring alarm bells that your budget after BR will lead you straight back into debt.

An NT code only lasts from the date of BR to the end of the current financial year (or until you start a new job - which ever comes 1st) so given the time it takes for the OR to inform HMRC and them in turn to inform your employer and the employer applying the code at the next payroll - and then the collection agent actually collecting the 'extra cash' from you - going BR in late Feb/March is likely to mean that administrative process wouldn't happen in time for the start of the new financial year in April. In this case the OR wont bother with the NT code and will simply claim any tax you have already paid this year directly from HMRC.

So yes - timing your BR to avoid an NT code can be done but of course there are no guarantees. Its such a complex process that I'm surprised the OR even bothers with NT's - it must be easier (and cheaper) to administer if they just claimed the tax direct from HMRC at the end of the financial year. There is no loss to the OR and the BR gets to avoid the embarrassment of 'office gossip'

Butts

TheGardener wrote: »

So yes - timing your BR to avoid an NT code can be done but of course there are no guarantees. Its such a complex process that I'm surprised the OR even bothers with NT's - it must be easier (and cheaper) to administer if they just claimed the tax direct from HMRC at the end of the financial year. There is no loss to the OR and the BR gets to avoid the embarrassment of 'office gossip'

However if like me you get an NT Tax Code and earn enough to pay tax that is not claimed by the OR (as in my case) you would actually be out of pocket if the OR adopted your suggestion.

Owllover

Hi, apologies for the slight hijack but what is the NT tax code thing? I'm considering bankruptcy and have no idea what this means or how it will affect me.

OP, good luck with your journey especially regarding the gambling. My best to you and your wife, I hope this is a fresh start for you.

LeicesterT

NT means no tax, when you go bankrupt your code is changed to this till the next financial year, unless as the gardener suggests it may not be if too close to April already- I’ll update the thread with what happens....and thanks owllover I hope so too, good luck with your situation to

ToxtethO'Grady

Beneficial interest is a nightmare with the OR.

With the house that your wife owns did she buy this before you were married or after? If it's after you may need legal advice unless you have a written agreement that you have no claim to the property.

My rule of thumb with property is could a divorce lawyer prove you're owed something from the property?

If the answer is yes then the OR or their trustees can.

If you were married for more than 2 years before your wife bought the property then the law implies this is an asset that you 'contributed to' by helping your wife with shared household costs. Not being on the deeds does not mean you have no beneficial interest.


I know you have probably thought of this but make sure you submit your application end of February, start of March so IF the OR wanted to claim tax they could have a week or two that they can. You don't want to get caught out of there's a bit of a delay through system error or workload so you BR isn't approved within a week

LeicesterT

She bought the house before we were married

LeicesterT

1 year before we were married to be exact

broaps

LeicesterT wrote: »

So there maybe a chance that the OR wouldn’t put me on a NT tax code at all?

You need to be careful about your timing for this NT tax code. My husband was declared BR 5 September. The tax office issued the NT code 30 October which was applied to his pension from 1 December. Presumably a combination of slow moves by both the OR and HMRC. I don't know if they can apply NT to the next tax year if it's too late for this one.