Bankruptcy (Sequestration) Scotland Help

OhWhatAMessIAmIn

Hi

As the title says, I’m looking for advice with bankruptcy in Scotland.

Hugely embarrassed to say that I have debts of almost £54k.  I currently earn £34k and have a private pension of £9k.  I’ve been ill with work related stress since the end of last year and have now been told that my employment will be terminated at end June. Given my age, almost 61, and the fact that I don’t want to return to a similar high-pressured job because of the stress, it’s likely that the £9k will be my only income for the foreseeable future.

I live with my husband and we’re moving house at the end of the month.  He has a mortgage, - the current house is in his name only and the new one will be too.  He will be taking a mortgage on the new house, and it will be in his name only.  He has a car on PCP, I don’t.  I literally have no assets bar a few bits of jewellery. 

Our living situation was that husband paid the vast majority of the bills, and I paid for the council tax, groceries, treats, holidays, things for the house etc.  Unfortunately, due to the stress and needing cheered, up as I was working long hours, I totally overspent on weekends away, holidays etc and everything was put on the credit cards.  I then consolidated these with loans and then up spending on the cards again.  All the debt has been run up in the past 4 years but a significant amount in the last 6 months.  It’s been a vicious circle.

As I said, I’m hugely embarrassed, I’m older and I really should have known better.

I’ve now completed the form on stepchange to look at options and it has suggested I apply for bankruptcy. This is where I’m looking for your help.

As we’ve been married for almost 40 years, we have a joint bank account with both salaries and my pension paid into it.  From what I’ve read on here and other places, I know we will need to arrange for us to have separate accounts.  Would you advise that we do this immediately?

All my debts are currently up to date.  Should I work through the bankruptcy process now or wait until I default which will be next month as I won’t have a salary.?

Having said that, I’m expecting to get around £4k when my employment terminates (been with them for less than 2 years).  Should I use this to pay my debts for a further month or 2?

I read on here about getting a new sim and email address for the debts you currently have.  Is this something that you’d recommend for me?

Do you have any idea how they will calculate what my disposable income will be going forward?  Will they look at my £825 monthly payment and then work out what my food and personal costs are etc?  How will they calculate my contribution to the household, or will they simply expect my husband to pay for everything now?  My worry is that although I paid the council tax and groceries it all came from the joint account so difficult to prove.

Given the fact that I’ve spent quite a bit in the past few months (buying things for the new house) will they view this as reckless spending?  To be fair, when spending I had no idea that my employer would terminate my contract!

Any help or advice appreciated.

RAS

Definitely get a new bank account whatever you do, to help protect your husband's credit rating. And organise for your salary and pension to be paid into it pronto. Do you have enough time to meet this month's deadlines?

Others who know more about Scottish law can help better.

ManyWays

To be fair, when spending I had no idea that my employer would terminate my contract!
I don't know anything about sequestration in Scotland. In England, it is a reasonable argument that you were not reckless if you expected your job to continue and you could meet all the monthly payments. 

Can you talk about why the house (and the previous one?) were just in your partner's name? Did he inherit a deposit or something? Does he earn a lot more than you do?

Do you have any other pension provisions? 

OhWhatAMessIAmIn

RAS said:

Definitely get a new bank account whatever you do, to help protect your husband's credit rating. And organise for your salary and pension to be paid into it pronto. Do you have enough time to meet this month's deadlines?

Others who know more about Scottish law can help better.

Unfortunately it will probably need to be July for my pension payment and it's too late for my final salary payment.

OhWhatAMessIAmIn

ManyWays said:

To be fair, when spending I had no idea that my employer would terminate my contract!
I don't know anything about sequestration in Scotland. In England, it is a reasonable argument that you were not reckless if you expected your job to continue and you could meet all the monthly payments. 

Can you talk about why the house (and the previous one?) were just in your partner's name? Did he inherit a deposit or something? Does he earn a lot more than you do?

Do you have any other pension provisions? 

I was self employed previously so it was easier for him to take out the mortgage in his name.  He also inherited a fair bit so put a large deposit down when we bought 2020.  When deciding to move earlier in the year we just agreed it was simpler to keep it as it is.

Yes, he earns more than me (always has done).  Will that impact on me applying for bankruptcy - from what I had read it seemed to apply that he couldn't be held responsible for my debts.

As for pension provision I have around £4k with my current employer - the one where I'm being terminated at the end of the month.  I could withdraw that to help pay the debts for another month or two?

ManyWays

The concern about the house is whether the Official Receiver (or whatever they are called in Scotland) may be able to query if you have any "beneficial interest" in the house. If the deposit in 2020 all came from his inheritance and his savings, none from you, that helps argue the case that you dont have any beneficial interest. 

I think you need advice on this, I suggest you talk to National Debtline on 0808 808 4000. They have Scottish advisers. You cannot rely on advice from StepChange's online advice tool.

Does your partner have any savings? If they do, they could clear the overdraft on the joint account and close the account so you two have separate accounts, that is a good idea in any case as you cant pay the debts and your credit score will be harmed.