StepChange advice

Galsy1001

Hi, I’ve had two advice options from StepChange:
1 - payment suspension (recommended)
2 - bankruptcy 

I owe 66k. I am due a lump sum from a divorce but this will not cover my debt.

Do I wait until the divorce is finalised and then go back to my creditors and negotiate payback? 

Or proceed with bankruptcy? 

I have just acquired a part time job (13.5 hours to start in two weeks time) on minimum wage and should be able to eligible for further Universal Credit support. 

Thank you in advance for your thoughts 😌

Galsy1001

RAS

Please do take advice on deprivation of assets, as you could find that you have to use the divorce settlement to cover your living costs.

If you've over £16k in savings/capital, you'll be ineligible for UC. You'd probably not be penalised for paying down priority debts like Council tax but need to take specialist advice on the situation. Otherwise, you could end up with just your part-time income to live on.

Meantime, stop paying anything towards the debts and let them default.

StepChange_Aidan

Galsy1001 said:

Hi, I’ve had two advice options from StepChange:
1 - payment suspension (recommended)
2 - bankruptcy 

I owe 66k. I am due a lump sum from a divorce but this will not cover my debt.

Do I wait until the divorce is finalised and then go back to my creditors and negotiate payback? 

Or proceed with bankruptcy? 

I have just acquired a part time job (13.5 hours to start in two weeks time) on minimum wage and should be able to eligible for further Universal Credit support. 

Thank you in advance for your thoughts 😌

Galsy1001

Hi,

We tend to recommend Payment Suspension in situations where there’s little or no money currently available to offer towards your debts. This isn’t a long-term solution but more of a holding position until things change.

Bankruptcy could be suitable if you don’t think that you’ll be able to repay the debts over a reasonable period, but please be aware that a lump sum payment received while bankrupt could be treated as an 'after-acquired asset' and have to be paid to the Official Receiver.

I’d need some more details to be able to say which is the best way forward for you. If you’re uncertain about the recommended solutions, please give us a call so we can review the budget and your options in more detail.

I hope this helps,

Aidan