Forced bankruptcy

ScottishLad

How does it work at the hearing then? Is everything taken over from there or does it take some time for then OR to get everything in order?

Minkym00

Your bank accounts should be frozen on the making of the order (but in reality it may take a day or so for the bank to pick up the fact that you’ve been made bankrupt). You get a call from the OR within 2 days to arrange an interview and one of the things they will ask you at that time will be what have you got in the bank. Providing you don’t have significant amounts in the bank the OR will write to the bank immediately and release the funds to you. Christmas should not be a problem at all,

You should be interviewed within 2 weeks if the order where you get the chance to explain what’s happened and how tech debt has come about.

I’ve seen plenty of bankruptcies due to council tax, but never where the debtor doesn’t have a house. Really odd. They’re just wasting more money by bankrupting you.

coolcait

Just seen this and will have to come back later when I have more time - but some very quick questions for now:

- do you have any other debts? How much, roughly?

- Is £170 per month a realistic estimate of your surplus income? It's probably worth putting up an SOA for people to have a look at

- The Debt Arrangement Scheme could well be an option (depending on how much other debt you have)

- If DAS is a possibility, you can speak to ANY DAS Approved money adviser and it will cost you nothing to apply for a DAS

- if you go to the court on the day of the sequestration hearing and tell the Sheriff that you're looking at applying for DAS, the case will probably be continued - in other words another hearing will be set up, to give you time to sort out the DAS (it's even better if you can say you've already spoken to a money adviser, and who that is). continuations are usual six weeks, but its up to the Sheriff

ScottishLad

Cait,

Yeah a couple of other debts totalling around £1000. Phone contract etc.
I’ve looked into a DAS, but they advised it may be too late as a hearing date has been set, as did Walker Love, you think I’d get the continuation to get that in place?

I’d be more interested in the DAS, rather than the forced Sequestration.

coolcait

ScottishLad wrote: »

Cait,

Yeah a couple of other debts totalling around £1000. Phone contract etc.
I’ve looked into a DAS, but they advised it may be too late as a hearing date has been set, as did Walker Love, you think I’d get the continuation to get that in place?

I’d be more interested in the DAS, rather than the forced Sequestration.

Thanks ScottishLad

I take it that whoever you spoke to meant that there wouldn't be enough time to get a fully approved DAS in place before the hearing? That's probably true.

But... there is definitely time to get things started - and you must make sure that the Sheriff knows that you are working to set up a DAS application. If you can't make it to the hearing yourself (do try to get there unless it is absolutely impossible) make sure you have someone who can go and represent you and speak on your behalf.

There is no absolute guarantee that the Sheriff will continue the case - because it is at his/her discretion - but it is now almost the norm that a continuation will happen if the Sheriff knows that a DAS application is a possibility.

If you haven't already spoken to a money adviser, please try to set something up now. Even if it's just getting a date for a full appointment - and you can then let the Sheriff have that information.

Like I said before, you can now go to any DAS approved money adviser - even a private sector adviser - and you won't have to pay them any fees at all. That's a very new change (from 4 November).

That said, there are a lot of DAS experienced advisers in local council debt advice teams and in local CABs. You wouldn't be the first person they've ever seen who has a sequestration hearing in the next couple of weeks and wants to see if DAS would be right for them. These advisers know how it works.

Not to mention charities like StepChange and Christians Against Poverty who also do DAS.

If your mobile phone contracts aren't in arrears, they wouldn't be counted as debts in DAS, they'd be 'continuing liabilities' and you would just keep paying your contractual payments as normal - and that would be put into your income and expenditure. Same with your ongoing Council Tax payments.

Even if your mobile contracts are debts, with a total debt of say £8,500 and a possible payment of say £150, you're looking at a DAS of less than five years. In a bankruptcy, you'd be paying a DCO for 4 years anyway.

Long story, short - and I know I'm repeating myself - try to speak to a DAS adviser asap.

ScottishLad

Like I’ve stated Cait, I’d definitely prefer the DAS. Worse case scenario, what happens on the day and the sheriff confirms the sequestration? As in the step by step guide + timescale.

Thanks btw!

coolcait

ScottishLad wrote: »

Like I’ve stated Cait, I’d definitely prefer the DAS. Worse case scenario, what happens on the day and the sheriff confirms the sequestration? As in the step by step guide + timescale.

Thanks btw!

You're welcome!

If the Sheriff awards the sequestration, there's a rough 'next steps guide' but a lot will depend on who has been nominated as trustee and your own circumstances.

Did you get a copy of the creditor petition along with the 'warrant to cite' (the document telling you when the sequestration hearing will be held)?

The petition will tell you who the council has nominated as trustee. If it is an individual insolvency practitioner, that is the person/company who will manage your sequestration.

It the council has nominated the Accountant in Bankruptcy (AiB) as trustee, they will pass your case to one of the companies who manage sequestration case for them.

Either way, the court will send the notice of Award of sequestration to AiB, and they will then notify the insolvency practitioner or the company who will be managing the case for them - depending on who is the trustee.

Whoever is managing the case will then get in touch with you. This should be done asap but some are quicker than others. They'll ask you to fill in various forms and send them back.

The bank might freeze your account in the meantime, just because that's what a lot of banks do. If this happens, contact the company who is managing the sequestration and 99 times out of a 100 they'll contact the bank to say that the account can be 'unfrozen'.

If you're likely to be the 1 in a 100 that doesn't happen with, you'd probably already have a good idea that it's a possibility - as you gaze upon a balance which is far in excess of a month or two's salary!

If that's not what your bank account looks like, you'll probably be OK.

All that said, if you go to the sequestration hearing, tell the Sheriff that you are keen to set up a DAS, and say what you have done to try to get things moving, there is a very good chance that you'll get a continuation. Sheriffs generally know that it can take time to set it all up.

The continuation would take you past Christmas - so you wouldn't have that stress. And you're not committed to doing a DAS. If you find out or decide that it's not the right thing for you, you can either go back to court after the continuation to tell the Sheriff that, or simply not turn up at that next hearing.