Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

lighto45 wrote: »

good evening at the moment my husband and myself are waiting to see whether our property is going to repossession as we cannot afford to pay this plus a secured loan with what we found out about today have been charging us extortionate rates of interest on our account with i.e one payment we made for £60 they charged us £200 in interest ,another for a really small amount charged us another £160 in interest and because we were a month or so behind had charged us nearly £700 in interest,the rate of interest on this is nearly 22%,we also have an iva for nearly £16,000 which is due to fail ,i have recently lost my job due to stress with all of the debt ,we have had an income and expenditure done which has a deficit of £300,we have tried to negotiate with our mortgage company ,but unfortunately we cannot do anything because of the deficit plus they want the arrears paid before they can help which we just cannot do ,we were just wondering whether it would be a better option to declare ourselves bankrupt because it looks as though it is going to lead to repossession anyway,thankyou.

Hi there,

Thanks for posting.

I’m sorry to hear you have to deal with the at the moment, it must be very stressful.

This sounds like quite a complex situation and it’d be hard to offer specific advice without knowing more about your situation.
Due to this I’d suggest you get in touch with our Helpline for some free debt advice.

One of our advisors will be able to talk with your properly about your budget, income and debts. They’ll use this information to let you know about any debt solutions available to you and what your next steps could be.

You can find out how to get in touch with us here: http://www.stepchange.org/Contactus.aspx

I hope this helps,

Jen

dilvj88 wrote: »

Please help me save our home. My mum owes a credit card company and she has failed to make payments for a long period of time so the debt was transferred to debt collectors. The debt collectors recently have applied for my mum to be made bankrupt. However as my mum was on holiday, visiting her ill father, she was not able to attend court and she didn't even know about the letters regarding the court hearing. So now the case was heard at her absence and she has now been made bankrupt. She has been asked to attend an interview at the end of next month with the Official Receiver.

I have a few questions in my mind that I cannot a find a clear answer to, so I'm really hoping you can help:

1. If we contact the debt recovery agency/bank and agree to make payments towards the arrears, could they cancel the bankruptcy order through court?

2. If not, how can we apply for bankruptcy order to be cancelled, before we attend the interview with the Insolvency Practitioner?

3. My mum also has some other debts worth up to about £15k, can the Official Receiver take over all of her other debts and then sell our house (as it's under my mum's name) in order to pay for all of the debts?

Could you please advise me, because I really want to avoid going through the interview process because my mum is so sensitive and she would be very worried if she's going to lose her home? I'm really worried about the impact it would have on my mum's health if she had to go through the hassle of interview etc.

Thank you so much,

Dilip

[FONT=&quot]Hi Dilip,[/FONT]

[FONT=&quot]I’m really sorry to hear about this situation, it’s understandable that you and your mother are feeling worried about this at the moment.[/FONT]

[FONT=&quot]Firstly, I think it’s important to note that when a court sends out paperwork, they work on the assumption that the person they’re sending it to has received it. If for whatever reason, the recipient doesn’t get the paperwork, it’s not usually seen as the court’s fault. [/FONT]

[FONT=&quot]To answer your questions:[/FONT]

[FONT=&quot]1. [/FONT][FONT=&quot]Making an agreement with the creditor now wouldn’t mean the bankruptcy order can be cancelled.
[/FONT]
[FONT=&quot]2. [/FONT][FONT=&quot]Your mum could apply for the bankruptcy to be cancelled (this is also known as being annulled) however there are usually very limited grounds for doing this. These are:
[/FONT]
[FONT=&quot]a. [/FONT][FONT=&quot]If your mum can get her creditor to agree to an IVA as an alternative to bankruptcy. This would usually depend on how much money she has leftover in her budget each month and what assets she has.
[/FONT]
[FONT=&quot]b. [/FONT][FONT=&quot]The bankruptcy shouldn’t have happened based on procedural grounds. So for example, if the debt she has with her creditor is less than £750.00.
[/FONT]
[FONT=&quot]c. [/FONT][FONT=&quot]If your mum can repay or secure all of her debts and the bankruptcy fees in full. Although this can only be done if someone else gave her the money and not through further lending or using any savings of her own.
[/FONT]
[FONT=&quot]If your mother wanted to annul the bankruptcy, she could start to do so before or after the interview with the official receiver (OR). Although, the person who holds the interview could give you some useful advice about annulling the bankruptcy. It’s important to note that there’s likely to be another court hearing for the annulment.

There’s more information about annulment of bankruptcy that you might find useful to read here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/429587/Can-my-bankruptcy-be-cancelled-May2015.pdf

3. All of your mum’s debt will be included in the bankruptcy however there are some types of debt that aren’t included in bankruptcy and you can find out about these here.[/FONT]
[FONT=&quot]
In terms of the house, it’ll usually depend on how much equity there is in the property. If she has no equity in the house, it’s unlikely the OR will make her sell it. If there is equity in the house, the OR will want to sell it and they can do this now or in 27 months’ time. There will however be the option for a family member to buy her share in the house though.

This is quite a complicated topic and we’d urge you to get advice before going ahead with anything. Even if your mother does qualify for an annulment of the bankruptcy, the process to do this isn’t straightforward.

It’s also quite likely that the debt collection agency dealing with the debt have probably done some research into your mother’s assets and whether making her bankrupt is worth it to them. This is because they’d need to justify paying for all the fees they’ll have to pay for the bankruptcy itself.

If you do go ahead with the annulment, it might be worth getting proper legal advice. Your mum might qualify for legal aid and you can call the Civil Legal Advice helpline to see if she’s entitled to this. You can find out more about this here:

https://www.gov.uk/civil-legal-advice

I hope this has been of some help,[/FONT]

[FONT=&quot]Jen [/FONT]

paddy777 wrote: »

hi there, im new to this thread, here goes, I applied and was made bankrupt in 2007 due to me having a gambling problem, I couldn't apply for credit during a long period, until this year my bank offered me a loan which I was shocked at, and may I add, had myself sorted out with gambling, but this done something inside my head and I just went crazy back on gambling over a period of 5 months, I mustve blew around £15,000, I got bank loans, overdrafts to the max, then in the last fortnight, I said I am going all out to try and get all my money back, applied for numerous credit cards and loans and placed them all on a bet and as you know it lost, so I couldn't get any more credit cards or loans, so I managed to get few store cards and bought things for people and took the money of them and gambled it, now im at a loss, lossed all my money, my wages, my credits wiped and done in and now I don't know what I can do or who I can turn to, I must owe out £15,000 now on top of the £15,000 I lost and im worried I could lose my job out of it, ive also seen that it could be deemed as fraud what I done, I need help please, I don't know what I can do, thanks in advance

Hi paddy777,

Thanks for posting,

As you'll know, gambling problems often make debt problems worse, and vice versa. For many people, borrowing more money to pay for gambling can make your debts increase, while struggling to keep on top of your increasing debts can be a trigger for more gambling.

We'd be happy to help offer our help and advice to help you deal with the debts that you've accumulated. We'd recommend getting in touch with us for our advice either by using our online Debt Remedy tool or speaking to our Helpline.

As well as our help dealing with your debt problems, we'd recommend you get expert help to deal with your gambling. There’s isn’t a one-size-fits-all solution to gambling problems, and different approaches work for different people. We've got more information about this on our gambling and debts page.

I hope this helps, please get in touch with us if you need our help.

Rory

paddy777 wrote: »

Thanks for getting back to me rory, can i be jailed for what ive done, im worried i could lose my jobjob, i dont know what to do and am embarrassedand ashamed of what ive done, i feel dirty with gambling, and just want to escape it all.

Hi paddy777,

I can understand your situation, as a debt advisor I've spoken to many people in your situation who feel ashamed about the reasons why they're in debt. You'll also find lots of people on the MSE threads who can offer support and who will know exactly what you're going through.

The important thing now is to look at what your options are and start to take practical steps to deal with your debts.

Gamblers often come under closer scrutiny when going through insolvency proceedings such as bankruptcy. If this happens, the official receiver will look at the reasons for going bankrupt and if they find that there has been dishonesty or reckless behaviour they can impose certain restrictions. It's extremely unlikely you'd ever be sent to prison for gambling debts.

Your situation will always be dealt with on an individual basis, so it's important to get expert advice and look at all of your options before making any decisions. In terms of jobs, being an undischarged bankrupt definitely restricts certain types of jobs such as directors of limited companies or insolvency practitioners, but you should also check with your employer (if possible) to see if it could also impact your job - sometimes certain employers might have this in their contracts.

We'd recommend speaking to us for more advice, so we can look at your situation and recommend the best way to deal with your debts. It may be that bankruptcy is the best option for you, but we'll also look at other debt solutions that may suit you better. We'll also answer any other concerns you have, and remember this is about you and we're not here to judge.

You can contact us, or us our Debt Remedy tool for free, impartial and confidential advice.

I hope this helps,

Rory

I should say that we are in Scotland - I'm not sure if the rules are significantly different here.