Partner & I need to go bankrupt - advice needed - Student

thisisnotideal

Hi everyone..

I was looking for some advice. I'll try to keep it to a minimum. Apologies if its lengthy, but essentially -

Both myself and my partner have decided, that after years of struggling with debt, bankruptcy is the only way that we are going to get out of it, and get anywhere now.

We are both in our 30s, have 2 children. Rent our home.
1 car that needs jump starting each time - 19 years old, 1 car HP finance (18 payments left out of 60).

We both currently work full time, but this is one of the many queries;

My partner starts full time uni in a few weeks, so he will be studying full time and working part time.
As the course has not started yet, I am unable to inform Tax Credits (as I will need to inform them of childcare rates changing etc..) so I am currently unaware of what we will be entitled to in that respect (to put it on the SOA) as our current claim is just a straight forward - both of us working full time and we require some childcare.
I have done a rough estimation on the Tax credits calculator, but how accurate that is....?

His student finance has not been calculated yet - so again, I am unable to input what his income will be - this has been a stressful few months as it is - I am hoping to hear something before he starts though. I have a rough estimation of what he may recieve, due to the info that is available online.

I am worried that if I overestimate on the SOA, then we get an IPA set up, that we will really struggle.
Can he even apply now with his circumstances due to change?

We currently live month to month on credit cards. I have £600 left on my last credit card which will get us through this month (food shopping, nappies & my sons out of school club fees), after that, I don't know what, hence the bankruptcy.

It's payday today - which means nothing. All of our big bills / loans / debts will have come out by around the 4th Sept, then there are the credit cards towards the end of the month, and that is everything gone.
We haven't defaulted on anything yet, but after this month, we will do.

When will be best to submit the bankruptcy application?

My worry is being able to do the food shopping, as I need to put it on the credit card, as there will be no cash left in the account once the big debts come out at the start of the month.

Should we both submit our applications at the same time?
Or wait a few weeks inbetween?

The only joint thing we have is our main bank account that everything comes in and out of, and a loan in joint names with the same bank.


Other questions -

1) Local authority - why are they informed? Which department are likely to be informed? What do they do with the info?
We have never missed a rent payment but I know that my Landlords wife works for the Local authority - I just dont know in what capacity. i work for the local authority but i am not office based.

2) I have read that the Student maintenance loan will not be counted as income - is this a definate? I think I read that grants and wages are counted as income for IPA purposes.


Sorry for all the questions, I'm just trying to figure out the best route and best steps to take.

Thank you.

JCS1

You need to put your income and outgoings as at the date you submit the paperwork. You can then notify the OR of any changes such as tax credits and student finance within a certain number of days.

Post up an SOA and then we can cast an eye over it for you.

silvercar

His student finance has not been calculated yet

Why not? Forms should have been submitted a few months ago. Loan is calculated on previous years income. If his income is significantly different this year to last, then you can apply for an adjustment.

I have read that the Student maintenance loan will not be counted as income - is this a definate? I think I read that grants and wages are counted as income for IPA purposes.

It's all income, even though the loan element is income you need to possibly repay.

MovingForwards

As you are going bankrupt why pay the debts in September?

Just cancel all the direct debits, aside from gas/electric/water/TV/rent/council tax and save the money you would have paid them.

Minkym00

Car: check the Ts and Cs on the HP agreement if there is a bankruptcy clause. Some HP companies automatically terminate the agreement on bankruptcy. Chance are you’ll be allowed to keep it as it must be a few years old and the HP company would rather have the money than a car back that might not clear the debt.

IPA: if you are planning to go bankrupt imminently then put down your current circumstances and explain to the OR that your income will be changing. They will then calculate any surplus income based on your new income and expenditure. Also tell your OR about your husbands bankruptcy as it will be easier to have one person manage both of your cases and do both IPA assessments. Put up your SOA on here for advice.

Credit cards/debts: stop paying them! You won’t be criticised for it and you need the funds.

Timing: do them both together as then you will better understand your position going forwards. There’s no benefit to waiting before your husband applies.

Local authority: they will only be informed in relation to your council tax. Your council tax is a provable debt and, by both adults in the household going bankrupt, your remaining months will be written off. The OR will claim this money, but ONLY if it’s is surplus income and you don’t need it for your reasonable living expenses.

Grumpelstiltskin

OP I don't think you have thought this through fully.

As Minky says don't pay any thing this month apart from vital things.

Your car situation could possibly be your biggest problem if you both need cars.

Nothing dreadful is going to happen if you don't pay your debts. You need to get some money together to keep as an emergency fund as you will have no access to credit going forward.


Who has advised you that bankruptcy is the best way forward? I hope you have taken advice.