Debt-free previously and now facing bankruptcy. Couple of questions?

skint_in_skirt

Got myself out of a financial rut a few years ago and now I am back at square one.:eek: I've always benefitted from these forums and have been lurking for a while again. :rotfl:



I am not able to work any more due to chronic ill health. I have so far been unable to get the occupational pension and have had a five month wait for Universal Credit with only a £200 advance.



I have been awarded the low rate of PIP so I started receiving £234 as of last month.
I can't pay down debts any longer and presumably need to go and see financial advisor and begin the bankruptcy process.


This part is morbid but I stay in the family home and my mum has willed it to me if she passes away (I hope that doesn't happen for decades obviously) but if it did while I was bankrupt, would the home I live in, the family home of 40 years be taken from me? It would make sense if that is the case for my mother not to will it to me but one of my siblings? They are all very comfortable and were relieved that mother got it drawn up so that myself and my child won't ever be homeless. It is an ex council house and not worth particularly much relatively speaking.


The other question is related to a mobile phone contract. I still have over a year on both mine and my childs phone and so far have just managed to keep the payments going. Would I have to hand the handsets back or would the OR allow me to keep the contract going as we need the phones?

I am hoping to hear this week if I am getting the occupational pension (ill health) and if I don't I will probably need to start the bankruptcy process in the next month.


Your advice on this would be very much appreciated.

thevdm

I'm not too sure about the contract phone as I switched to pay as you go before going bankrupt.

As for the house, in the case of inheritence (hopefully not too soon) it would become an asset of yours and as such you could end up in a situation where it may be sold to pay the debts.


I'm guessing by the last bit that you realise that pension payments would be classed as income and can be used for an IPA, whereas if you are only in recipt of benefits an IPA won't be set up.

skint_in_skirt

Thanks thevdm. I had suspected as much with the house being an asset. My mother would probably be better to gift it elsewhere, it would be a real shame if my parents' hard work/home got taken away as a result of my bankruptcy. The family really want me to have a home to raise my child in so I suppose it is best to take advice on this before going ahead.



I'd no idea about the pension being used towards a bankruptcy but think I will need to look into that too. Thanks again.

sourcrates

Bankruptcy usually only lasts one year, then you are discharged.

Any assets acquired after discharge are yours to keep.

As for the phones, you can keep the handsets, their cost, and your outstanding contract debt, is covered by your bankruptcy, just put PAYG sims in them.

Minkym00

99% of the time you can keep the mobile phone contracts. The OR knows that they are essential these days. The only question that might arise would be if you got 2 new iPhone 11s the week before bankruptcy as obviously there would be significant value to these and they *could* be seized. Check your phone contracts too in case there is a bankruptcy clause and the operator can claim the phones back.

Please make sure you get proper advice before going bankrupt though.

fatbelly

Minkym00 wrote: »

Please make sure you get proper advice before going bankrupt though.

Maybe National Debtline Scotland?