Ask a StepChange debt advisor a bankruptcy question

haylesx01x

Hi,
hope I’m posting in the right place! I declared bankruptcy in 2017 but on my credit profile amigo loans still says late payment!? (This was included in the bankruptcy)  is this right? And if not how do I get them to change it? I emailed them before but they said the account was still active and it will be updated every month. Please help 

StepChange_Patience

haylesx01x said:

Hi,
hope I’m posting in the right place! I declared bankruptcy in 2017 but on my credit profile amigo loans still says late payment!? (This was included in the bankruptcy)  is this right? And if not how do I get them to change it? I emailed them before but they said the account was still active and it will be updated every month. Please help 

Hi there

Thanks for your post, you're certainly in the right place. 

I'm sorry to hear that the Amigo loan is still showing as late payment on your credit file, any creditor which had not defaulted before the date of the bankruptcy must add a default date no later than the date of the bankruptcy order. Guarantor loans behave the same was as any other debt in insolvency, but they can still go to the guarantor for payment.

What may be worthwhile doing is getting a confirmation letter to send to them to confirm you've been discharged from your bankruptcy.

Discharge from bankruptcy will happen automatically, so you won't necessarily get proof sent to you. You can find more information about that here.

I hope this helps. 

Patience

backagain111

Hi. I'm considering a dro. But am due to get a £500 covid payment, will that interfer with it? Also I have read that you can't be seen to be paying back one person over another, I'm in arrears with my rent, council house, so have been making some payments to that, again will I still be able to get one? Thank you x

StepChange_Allen

backagain111 said:

Hi. I'm considering a dro. But am due to get a £500 covid payment, will that interfer with it? Also I have read that you can't be seen to be paying back one person over another, I'm in arrears with my rent, council house, so have been making some payments to that, again will I still be able to get one? Thank you x

Hi there

Thanks for posting.

There are potential issues around the two things you refer to here as lump sum payments received and 'preferring' one creditor over another can be issues with a DRO application. However, there's a lot of information that would be taken into account before ruling you out of a DRO on those grounds.

If you'd like to see whether you fit all the other DRO criteria first, you can use our free service by calling 0800 138 1111 or visiting our website: www.stepchange.org and completing a budget online.

I hope this is helpful.

Allen

JCS1

StepChange_Allen said:

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 up to the judge'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

Just to clarify, the Judge does not get involved as to what would happen to the taxi, that would be down to the OR.  

hmwhite72

Hi there,

Can anybody help me with a post-bankruptcy question?

I was discharged 15 years ago in 2006. I am a songwriter and the insolvency service took control of my royalty payments from the PRS as part of my bankruptcy. They still hold this asset today and continue to collect my royalties.

My main debtor was a high street bank. Last year I was contacted by a credit reference agency with a refund payment. The bank asked me to tell the insolvency service to stop sending them money. I got this in writing and sent it to the insolvency service but they will not accept it. They want a letter from the bank stating they are waiving their right to statutory interest, but the bank say they never write such a letter. I can't get the bank and the insolvency service to speak to each other, and as it stands any payments the insolvency service make to the bank will most likely be returned.

The reason I would like to get this resolved is to be in a position to own the rights to my music again. In 2014 the insolvency service contacted me and asked me to make them an offer to buy back my royalties. We agreed a sum of £1,000, but they stalled and then six months later increased the sum to £3,500 for no reason, which I couldn't afford. So they've had another eight years since then of collecting this money and I have no idea how much longer this will go on for.

I wanted to ask does this situation sound unusual, i.e. is it normal for money to still be collected and distributed fifteen years after being discharged from a bankruptcy? 

I would really love to speak to someone for some advice and help - is there anyone you can recommend?

Many thanks

StepChange_Allen

hmwhite72 said:

Hi there,

Can anybody help me with a post-bankruptcy question?

I was discharged 15 years ago in 2006. I am a songwriter and the insolvency service took control of my royalty payments from the PRS as part of my bankruptcy. They still hold this asset today and continue to collect my royalties.

My main debtor was a high street bank. Last year I was contacted by a credit reference agency with a refund payment. The bank asked me to tell the insolvency service to stop sending them money. I got this in writing and sent it to the insolvency service but they will not accept it. They want a letter from the bank stating they are waiving their right to statutory interest, but the bank say they never write such a letter. I can't get the bank and the insolvency service to speak to each other, and as it stands any payments the insolvency service make to the bank will most likely be returned.

The reason I would like to get this resolved is to be in a position to own the rights to my music again. In 2014 the insolvency service contacted me and asked me to make them an offer to buy back my royalties. We agreed a sum of £1,000, but they stalled and then six months later increased the sum to £3,500 for no reason, which I couldn't afford. So they've had another eight years since then of collecting this money and I have no idea how much longer this will go on for.

I wanted to ask does this situation sound unusual, i.e. is it normal for money to still be collected and distributed fifteen years after being discharged from a bankruptcy? 

I would really love to speak to someone for some advice and help - is there anyone you can recommend?

Many thanks

Hi there

Welcome to the forum and thanks for posting.

Having read through the above, I can appreciate that this is tricky and frustrating situation. To be completely honest, at StepChange we only really know what bankruptcy is, the main ways it works, when it's the best solution for someone and your standard aftermath scenarios; if that makes sense. I've never come across anything quite like the above, and I doubt anyone here has unfortunately.

I must admit it doesn't sound right that money is still being taken/withheld from you after so long and after the bank has said to stop sending them money now. However I can't say for certain that what's happening is wrong.

If it was me, I'd perhaps try a carefully written e-mail to both the Insolvency Service and the bank concerned explaining the predicament and make a clear request for the payments to stop; and if they can't, a clear explanation as to why not. Maybe ask for a statement to show how much money has been paid into the bankruptcy so far, to get an idea whether you've now paid more than the initial debt that was written off.

Failing this working, I'd guess that you may need to seek legal advice.

I hope you get it all sorted soon.

Allen

Lahlah1

I have debts of just over £30k owed to several credit cards, loans and banks.

Some of these are over ten years old and some are from just a few years ago.

My partner struggles with pain and prescription drug addiction. They do not work due to severe epilepsy and they are not British. Therefore, mine is the only salary. My partner had been taking money out of my account to pay for their drugs. At first, I didn’t know about it but I do now. I struggle with my mental health. We now live with family and give them a substantial amount of money for rent. I do not own a car but rent one in a all-in-one subscription. My work is over an hour away.

I would like to go bankrupt but I suspect the large amounts of regular money that my partner took for their addiction will be highlighted. I worry that the repercussions would be greater than my current level of stress and anxiety. My partner and I are working on their addiction issues.

Will this be an issue? What questions could I be asked and could I face any repercussions for my partner’s buying of prescription medication using my money, whether I was knowing or unknowing?

StepChange_Aidan

Lahlah1 said:

I have debts of just over £30k owed to several credit cards, loans and banks.

Some of these are over ten years old and some are from just a few years ago.

My partner struggles with pain and prescription drug addiction. They do not work due to severe epilepsy and they are not British. Therefore, mine is the only salary. My partner had been taking money out of my account to pay for their drugs. At first, I didn’t know about it but I do now. I struggle with my mental health. We now live with family and give them a substantial amount of money for rent. I do not own a car but rent one in a all-in-one subscription. My work is over an hour away.

I would like to go bankrupt but I suspect the large amounts of regular money that my partner took for their addiction will be highlighted. I worry that the repercussions would be greater than my current level of stress and anxiety. My partner and I are working on their addiction issues.

Will this be an issue? What questions could I be asked and could I face any repercussions for my partner’s buying of prescription medication using my money, whether I was knowing or unknowing?

Hi,

Thanks for your post and welcome to the forum. I’m sorry to hear that you and your partner are struggling, and I hope I can help.

After applying for bankruptcy your details would be passed to the Official Receiver (OR) who investigates your income, expenses, and assets. Their role is to make sure that everyone is being treated fairly in bankruptcy. If you live in Scotland your finances would normally be reviewed by the Accountant in Bankruptcy (AIB), although the process is similar.

Questions could be asked about drug costs, particularly if regular and large amounts of money were taken. You may be required to provide some more information about your partner’s addiction and what steps have been taken to overcome this.

You shouldn’t face any repercussions if the OR/AIB agrees that you were unaware that your partner was taking money from your account. However, as each bankruptcy is handled on a case-by-case basis I can’t guarantee this. If they did feel that you were responsible in some way you could receive a Bankruptcy Restriction Order which extends the amount of time that bankruptcy restrictions apply to you.

If you haven’t already, I would recommend getting debt advice to review all your options and make sure that bankruptcy is the right way forward before you apply. If you’d like to get some support from StepChange you can get advice online or give us a call.

It’s good to hear that you and your partner are working on their issues. If they need any additional help their GP is the best person to speak to, but if they would like some confidential advice about addiction, I recommend contacting the national drugs helpline Frank on 0300 123 6600.

I hope this helps.

Aidan

dtjones888

Hi

I have two questions here, I've just completed an online income and expenditure form with Business Debt Line. After all of my expenditure I'm actually left with a minus figure. Will this mean I don't qualify for a DRO? 

Also, I am a self employed sole trader but all of my debts are personal and not business related. Will stepchange be able to help me or will I need to go to BDL? 

Thanks in advance