Ask a StepChange debt advisor a bankruptcy question

Former_MSE_Laura

September 2021: We have started a new thread as the previous thread was becoming quite long.

If you’re struggling with debt and have a question around bankruptcy, this thread is here to help.

 

There are many trained advisors from the debt charity StepChange here on our Forum ready to answer your questions. They’re incredibly friendly and want to help where they can.

 There are three ways you can contact them:

1. You can ask them a bankruptcy question by posting in this thread. One of the advisors will then post a reply here for you. (If you have a debt-related question, head over to our debt-free wannabe thread.)
2. If you would prefer to ask a question in private you can send a private message to StepChange Private Messages and one of the advisors will get back to you.
3. StepChange also has a free and confidential online tool. You can put a budget together at your own pace, and you can also talk it over with an advisor through online chat.

 

This thread continues from the previous StepChange threads: one and two.

maxmycardagain

Good day Mr/Mrs/Miss Step Change

What info do you want to hear and what info do you want to see for a DRO applicant?

What are your standard questions?

Thanks

StepChange_Aidan

maxmycardagain said:

Good day Mr/Mrs/Miss Step Change

What info do you want to hear and what info do you want to see for a DRO applicant?

What are your standard questions?

Thanks

Hi,

Thanks for your post.

Before we can give any recommendations, we would first need to take details of a person’s income, expenses, debts and assets, creating a budget so we understand their financial situation. We may be able to recommend a DRO if they fulfil these criteria:

• They live in England, Wales or Northern Ireland

• They owe less than £30,000 (£20,000 in NI)

• They have less than £2,000 in assets (£1,000 in NI) and their car is worth no more than £2,000 (£1,000 in NI)

• They have less than £75 remaining in their monthly budget after covering their priority expenses and living costs (£50 in NI)

There’s some more information about DROs here.

If a DRO is a recommended solution, we can send an agreement form for the applicant to complete and return. They would also need to provide proof of income and details of all creditors.

I can see from your other thread that you have been asking for information about DROs on behalf of someone who may be self-employed. If they still are, I’d recommend referring them to Business Debtline for specialist advice.

If they are no longer self-employed, they can complete a budget and get advice online using the StepChange website or give us a call to speak with an advisor.

I hope this helps.

Aidan

Katielou14

Hi, I am considering bankruptcy. I am a single parent to two children, and due to my marriage breakdown & then an abusive relationship I have ended up with just over £30k of debt that I cannot pay.

Its causing a massive effect on my mental health, and have been at the point of feeling suicidal.. I am moving in with my parents soon and will be paying them almost the same amount of rent / utility bills as I would if I was privately renting, How do I show this when declaring myself bankrupt, will rent / bill payments to my parents be an allowable expense? 

Many thanks

StepChange_Aidan

Katielou14 said:

Hi, I am considering bankruptcy. I am a single parent to two children, and due to my marriage breakdown & then an abusive relationship I have ended up with just over £30k of debt that I cannot pay.

Its causing a massive effect on my mental health, and have been at the point of feeling suicidal.. I am moving in with my parents soon and will be paying them almost the same amount of rent / utility bills as I would if I was privately renting, How do I show this when declaring myself bankrupt, will rent / bill payments to my parents be an allowable expense? 

Many thanks

Hi Katie,

Thanks for your post. I’m very sorry to hear about your situation and I hope we can help.

Board/rent and the bill payments would be an allowable expense in Bankruptcy, you would just need to include your contribution to them under the Income and Expenses section of your application.

If you haven’t already, I’d recommend getting debt advice to review your budget and options before applying for bankruptcy. If you’d like to get help from StepChange you could use our online tool or give us a call to speak with an advisor.

Please remember that your family and your health are more important than the debts. Have you spoken to your doctor about how you’re feeling? If you’re having suicidal thoughts I would definitely suggest speaking with the Samaritans, or contacting a specialist organisation such as Mind for further support and advice.

I hope this helps,

Aidan

Foomoo

Hi, 
I was made bankrupt in April 2021, my circumstances have changed and I have moved in with my partner.
I have contacted Advantis who are in charge of my IPA but I am awaiting them contacting me back.
I am just wondering how I detail my new "Incomings and Outgoings", obviously my partner is paying towards rent and bills but do I put all his incomings too etc as he has his own outgoings like child maintenance and car payment mobile phone etc.
Its myself and 2 children and then my partner so do I split everything 50/50?
I hope that makes sense. Thank you

StepChange_Patience

Foomoo said:

Hi, 
I was made bankrupt in April 2021, my circumstances have changed and I have moved in with my partner.
I have contacted Advantis who are in charge of my IPA but I am awaiting them contacting me back.
I am just wondering how I detail my new "Incomings and Outgoings", obviously my partner is paying towards rent and bills but do I put all his incomings too etc as he has his own outgoings like child maintenance and car payment mobile phone etc.
Its myself and 2 children and then my partner so do I split everything 50/50?
I hope that makes sense. Thank you

Hi there

Thanks for your post. 

I'll help as much as I can, but you may need to wait for a definitive answer from Advantis. Where there are other members of the household the Official Receiver may ask for their income to be declared too, but they have no power to force you to do this. 

If they aren't able to get details of your partners income, similar to what you mentioned they may then assume that you each pay 50% of the household expenditure when working out the IPA arrangement. 

I would just try to be as accurate as possible with them, show them your new share of your expenditure now your circumstances have changed.

I hope this helps.

Patience

[Deleted User]

Hi.
In respect of a DRO, my monthly wages are likely to vary slightly each month (maybe within £200) due to bonus payments that i'm now eligible for - they are team related performance bonuses not sales related but it seems i am likely to get them each month.  With my flat wage, i have less than 75 disposable a month so qualify to apply for the DRO, would my potential increasing wages pose any issues and if so how can i address them ?
Thanks

StepChange_Allen

[Deleted User] said:

Hi.
In respect of a DRO, my monthly wages are likely to vary slightly each month (maybe within £200) due to bonus payments that i'm now eligible for - they are team related performance bonuses not sales related but it seems i am likely to get them each month.  With my flat wage, i have less than 75 disposable a month so qualify to apply for the DRO, would my potential increasing wages pose any issues and if so how can i address them ?
Thanks

Hi Tom

Thanks for your post.

If you're already in the process of seeking debt advice or going through a DRO application, you need to get in touch with the organisation that's doing that for you to let them know about this change. If you already have an amount of disposable income, even if small, and are set to average around £200/month more in wages, then it seems that you're going be quite some way over the maximum allowance for a DRO, and therefore may have to look at alternative debt solutions.

I hope this makes sense.

Allen

MadMat

Hi,

The pandemic has done a pretty good number on me financially,  I'm considering bankruptcy as a way of dealing with my problems

I live in private rented accommodation

My main question - I'm a self employed taxi driver, I own my Taxi outright (no finance) and it's worth around £4000 (according to we buy any car)  -  Would I be allowed to keep this as "Tools of the trade" or would it be taken?
My only other significant financial assets are two pensions, which I'm pretty sure are protected from bankruptcy ?

TIA

Mat

StepChange_Allen

Hi there

Thanks for your message.

There is no minimum value that the official receiver (OR) will order a car to be sold to pay the proceeds into a bankruptcy order, however typically the risk is higher once you get over £1500. If this was a personal vehicle only, I'd expect that the vehicle would have to be sold. 

The fact it's a taxi and is your livelihood may change this, but there are no guarantees; you'd be risking the taxi if you declared bankruptcy, it'd be down to the OR's discretion. If they ordered it to be sold, you may be allowed to keep an amount of the proceeds to buy a cheaper taxi, perhaps around £1000. I can appreciate this may not be ideal given the heavy use a taxi gets, but like I say, I can't predict how the OR would see it. You'd have to try and give a compelling case to be able to keep the vehicle.

The pensions would be fine as long as you haven't drawn down on them. If you draw a lump sum or buy an annuity before you're discharged from bankruptcy, or during an income payment arrangement period (where you pay any surplus money each month into the bankruptcy), the money could be taken by the OR. I hope that makes sense.

If you have any other questions, please let us know.

Allen