Bankruptcy - Salary, Bank account, and property rent

Asbentos

Good Morning Everyone,

Apologies if such topic already exists (I tried to search however was not able to find exact answer)

I am about to declare a bankruptcy, and as far as I know all my bank account will be frozen.
I am still full time employed, and as I understood, for the first year my salary will be taken, and only minimum living costs will be given to me.

I wanted to get advice, what is the best way to manage my salary and deal with an employer? (and what is exact procedure) I assume my payments should be redirected somewhere. will it be new basic account which I should create, and then pay to the insolvent agent or court will take over my salary completely? 

And my second question is regarding the living costs: Does property rent is included to it? And if I am renting something for a reasonable price, can I be asked to move somewhere cheaper? (for example from 1 bed flat to a room) 

Many Thanks in advance.

JCS1

Morning   -have you taken any free debt advice? There are a few things you state which are incorrect, hence asking.

luvchocolate

Second this contact stepchange, national debtline or any free debt advice charity 

Asbentos

JCS1 said:

Morning   -have you taken any free debt advice? There are a few things you state which are incorrect, hence asking.

No I haven't yet. I started my research recently. Thanks for the advice, I will contact them now.
On another note, would you mind to correct me on my previous topic if you have time

luvchocolate

Start by reading the Insolvency service website also 

Mart7379

As someone who has personally declared bankrupt and discharged as of today. I feel I could probably offer some advice on your questions. 

Firstly, in terms of your bank account, if the account your using now is a current account and is your main account, that will be frozen by the trustee, the bank are highly likely to also stop you from using it. Any accounts you hold which are deemed as a basic account is unlikely to be of any interest to the trustee. And they will probably advise you they have no interest in that account. 

When I first declared bankruptcy last year, I had an existing account with Monzo (as basic as basic can get)  and moved all of my finances to that account, i.e. my rent, income, bills. So my advice, make sure your income and bills are going in and coming out of a basic account. Before you hit the submit button on your Bankruptcy. But obviously you need to make them aware of ALL bank accounts you have. I did, and they had no interest in the Monzo basic account. 

In terms of where you live, make sure your landlord doesn’t have any clause in your contract in terms of your financial well-Being. 99% of housing associations, councils aren’t that bothered. In terms of the amount of rent you pay, having a roof over your head is number 1 priority and can’t be expected to be taken from you. Unless your living an extravagant lifestyle on the south bank of London. Employment wide, I think unless you work within a financial institution you can continue to work for your employer. But something else you would need to confirm with your boss, or check your employee handbook. 

Going forward, once your Bankruptcy has been accepted and a Bankruptcy order is issued, a couple of weeks after you will notice you no longer pay tax on your income, and placed onto an NT tax code. This is because the Trustee take all the tax you have paid since the start of the last tax year. DO NOT spend any of the extra cash you get in your pay packet, it’s nice to have but it’s not yours and the trustee will claim it back and will expect you to pay it direct to them. 

Again once your bankruptcy order is issued you effectively are debt free, you do not really need to do anything further, if you are deemed to have surplus income you will be required to pay into an IPA for 3 years. But they will contact you at a later date to discuss this with you, it was 3 months after my bankruptcy order was issued when I was contacted. Don’t let it worry you, they are human as well, they understand and they deal with Bankruptcy day in day out. Basically an interview to quickly go over anything in your income and expenditure that they want to clarify. Following that interview a collection agency will contact you. Probably a company called Advantis, they are just there to take the payments, set up weekly or monthly payments with you at the agreed amount. 

Finally, it goes without saying be honest when dealing with the Trustee, and Collection agent. 

Bankruptcy isn’t Scary, you will hardly notice you are Bankrupt and no one will know you are unless you physically tell them. 

Any more questions, the guys here should be able to offer advice. Although I think I may have covered everything here. 

Asbentos

Thanks a lot for the detailed reply. You completely covered my question. Meanwhile I am getting advice from other free services as advices by others. 

Mart7379

Asbentos said:

Thanks a lot for the detailed reply. You completely covered my question. Meanwhile I am getting advice from other free services as advices by others. 

Your Welcome and good luck.