Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Jen · 20 March 2015 at 11:45AM

storm35 wrote: »

I am working with Stepchange just now, i have been told since its near April where the rules for bankruptcy are changing, ive to leave it until they know the new rules, but this has been made clear to me, bankruptcy is the only way i can go. In meantime to send letters to my debtors which i have done, my question is, what do i do if they start sending me letters or start calling me up?
I could only write one letter, the other 2 debtors i could not find an address on their site, so i sent them an email?
TIA x

Hi Tia,

Thanks for posting.

Well done on taking the steps towards dealing with your debts. Bankruptcy is a big decision, so we’re pleased to hear you’ve been in touch with us for advice about this.

As philnicandevan mentioned, if your creditors get in touch with you before you’ve declared bankruptcy, we’d recommend you tell them you’re talking with us and will be in touch shortly.

I hope this helps and if you’ve got any more questions feel free to get in touch.

Jen

StepChange_Jen · 20 March 2015 at 11:47AM

goldenoldiegirl wrote: »

Hi, this is my first post andI feel very nervous but things are really bad for me at the moment and I thinkI’m nearly ready to make the decision to go bankrupt. I haven’t spoken to any family or friendsabout this except for my daughter but she is young and I am very scared aboutdoing this on my own.

I have about £20K owing on 2credit cards and £1K on a store account. I have been making monthly minimum payments and I have no spare cashafter paying these debts and household bills.

I’ve had car maintenance billthis month and this is the first month I won’t be able to pay one of the creditcards. I’ve been stressed and strugglingfor so long now and the payments I make are going on the interest hardlyanything is coming off the balance. Ijust can’t see any respite from this, I’ve been reading the information aboutDMP and IVA but I’m 54 and I think bankruptcy would enable me to have a freshstart and sort myself out financially before retirement creeps up but I am soashamed and scared to do it. I rent myhome and don’t own a property.

My question today is, if I doapply for bankruptcy I understand I will be asked if I have taken advice about debtrepayment options. I’ve spent hours onthe Internet reading about options, and I’ve completed the debt management toolon Step Change – would this be enough advice or do I need to do anything else?

[FONT=&quot]Hi there,[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Thanks for posting.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Well done on taking the steps towards dealing with your debts. I understand you’re feeling stressed and nervous right now but you’ve come to the right place for help. You don’t have to deal with this alone and we’re here to help you every step of the way.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Our Debt Remedy tool is designed to replicate the debt advice you’d receive if you called our Helpline. If our Debt Remedy tool has recommended bankruptcy as a solution for you, it’s because it’s a solution that best fits your situation. However as bankruptcy is a form of insolvency, you may like to have a chat with one of our advisors if you have any concerns or would like some guidance on filling in the bankruptcy forms. As you’ve already been through Debt Remedy, I’d recommend giving our web Helpline a call on[/FONT]
[FONT=&quot]0800 197 1704. The opening hours for this number are Mon-Fri 8am-8pm and Saturday 9am-2pm, and it would help the advisor if you could have your web reference number (beginning with W) to hand when you call.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I hope this helps and if you’ve got any more questions you know where we are.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Jen [/FONT]

StepChange_Jen · 20 March 2015 at 12:29PM

77_whitebear77 wrote: »

On the bankruptcy guidelines in section 3 - Assets, its says you must disclose following items to official receiver :
. tools etc of your trade
.clothing etc and basic items..
does clothing etc go in the fixtures and fittings section of assets ?
i am confused as the CAB example does not list these items in its example of form filling.

One more question - i have a long term regular bank account also which i expect to be stopped. But what about the Barcleys basic account i recently set up( in preparation ) and have not used yet
Should this be listed in section 5 , and will it be closed. Is it an idea to explain in the back notes. ?

Thankyou for your help.

Hi there,

Clothing tends to be exempt from bankruptcy unless you own any designer clothing with a retail value. So if you don’t own any clothing items along these lines, you don’t usually have to include it on your bankruptcy forms.

You should list your Barclays basic account on your forms. If it’s not associated with any debts, you should be allowed to keep it open however you should move into this account as soon as possible. The official receiver (OR) will still freeze the account so they can have a look at your transaction history. Once this is done, if the OR and Barclays are happy for you to continue using it then you will be allowed access again.

I hope this helps to answer your questions.

If you’ve got any more queries you know where we are.

Jen

WG0608 · 20 March 2015 at 5:23PM

Is there anything you can do when you are in debt can not pay your mortgage, but have equity in your house, which you are trying to sell.

tigerfeet2006 · 22 March 2015 at 12:26PM

StepChange_Jen wrote: »

Hi there,

The official receiver (OR) will still freeze the account so they can have a look at your transaction history. Once this is done, if the OR and Barclays are happy for you to continue using it then you will be allowed access again.

I hope this helps to answer your questions.

If you’ve got any more queries you know where we are.

Jen

NO! NO! NO! The OR will NOT freeze the bank account. OR's do NOT freeze accounts, banks do if they know you are BR.

What will happen is you list the account on the forms (before you go BR get all your money going in to this account and a DD's/SO's set up and running smoothly) and when the OR contacts you by phone , usually on the day of BR for a quick chat you tell them this is the account you have set up for your BR. He should write to Barclays declaring no interest in the account as it is your everyday account. Barclays will leave the account running as normal and you will carry on. I cannot remember when I last heard a Barclays account got frozen, it's like hens teeth. If by a weird chance they do freeze it a quick call by you to your OR will get it sorted.

The OR will ask for statements from your bank accounts which you send them, they usually ask for anything between a year or 5 years but can ask for what they like. If you don't have anything then let them know and they will get them from the organisations concerned themselves, though obviously it is easier and quicker if you do have the statements to send.

Hope that helps and makes sense.

fermi · 22 March 2015 at 12:40PM

Totally agree tigerfeet. With all respect to StepChanege for the great job they do, that is still 'shocking' advice.

StepChange_Jen · 24 March 2015 at 11:51AM

77_whitebear77 wrote: »

On the bankruptcy guidelines in section 3 - Assets, its says you must disclose following items to official receiver :
. tools etc of your trade
.clothing etc and basic items..
does clothing etc go in the fixtures and fittings section of assets ?
i am confused as the CAB example does not list these items in its example of form filling.

One more question - i have a long term regular bank account also which i expect to be stopped. But what about the Barcleys basic account i recently set up( in preparation ) and have not used yet
Should this be listed in section 5 , and will it be closed. Is it an idea to explain in the back notes. ?

Thankyou for your help.

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

[FONT=&quot]I’d just like to clarify that no, contrary to my last reply, it’s true that bank accounts aren’t always frozen during bankruptcy. Apologies for the incorrect information previously.[/FONT]

[FONT=&quot]The majority of the time[/FONT][FONT=&quot] accounts that are to be looked into will be frozen, however there may be some exceptions to this, such as basic accounts and Barclays Cash Card accounts.[/FONT]

[FONT=&quot]I hope this prevents any further confusion. [/FONT]

[FONT=&quot]Our charity’s general advice is this: expect that some or all accounts may be frozen. You might need to withdraw enough money to cover basic living costs ahead of temporarily losing access to all accounts.[/FONT]

[FONT=&quot]Thanks for raising the issue tigerfeet and fermi, you’re just too quick for us, and sorry again for the confusion![/FONT]

[FONT=&quot]Jen[/FONT]

StepChange_Jen · 24 March 2015 at 12:06PM

WG0608 wrote: »

Is there anything you can do when you are in debt can not pay your mortgage, but have equity in your house, which you are trying to sell.

Hi there,

Thanks for posting.

It’s important that you make steps to deal with the debt or arrears as your mortgage is always an important payment that should be prioritised. It’s also a good idea to speak with the mortgage lender at the first opportunity as there could be options that your lender can discuss with you.

Without knowing more about your situation it’d be hard to offer any more specific advice about your options.

You might find it useful to give our Helpline a call to have a chat with one of our advisors about your situation.
They’ll be able to talk though your budget, debts and income to help find a debt solution that’s right for you.

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

I hope this helps and if you’ve got any more questions please let us know.

Jen

fermi · 24 March 2015 at 12:13PM

StepChange_Jen wrote: »

[FONT=&quot]The majority of the time[/FONT][FONT=&quot] accounts that are to be looked into will be frozen, however there may be some exceptions to this, such as basic accounts and Barclays Cash Card accounts.[/FONT][FONT=&quot][/FONT]

That 'majority' of accounts will not just be frozen by the banks, but will be closed. That applies even with basic accounts sadly.

As said, only main exception is the Barclays Basic account and to some degree the Co-op.

I don't recall many, or perhaps even any, examples of Barclays closing down or freezing the basic account due to a bankruptcy where there are no other factors.

littlerock · 25 March 2015 at 12:33AM

My B-i-l has always been a pain in the proverbial and was constantly in debt so we were all very relieved when around 25 years ago he took himself off to live overseas. He showed up again here about ten years with a nice younger foreign wife (he is in his mid 60s, she is around 50) who did not speak much english. (This is relevant.) She does not do any paid work, had difficulty due to her poor english as much as anything. She also had a dodgy brother hanging back home overseas who seemed to show up periodically and embroil B-i-L in some dubious business scheme.

We kept away as it all seemed to be heading for disaster and B-i-L is the ultimate blagger who never listens to advice. The B-i-L seems to have spun his wife and her brother some yarn about inheriting a large sum, which, possibly due a limited grasp of english (as she is well educated), she bought into. His dodgy brother in law moved here to the UK two years ago with a growing family in tow and began hanging around them even more. B-i-L continued to live beyond his means, fancy foreign holidays the lot.

Reading behind the lines we think the wife's dodgy brother has been borrowing from B-i-L for his dodgy business schemes as well and we have been told he is now out of work. Result is B-i-L has also been borrowing to keep them all afloat and spending well beyond his means. He says his wife has no idea of the state of things. We have avoided contact as much as possible but a letter turned up the other day saying he was around £40,000 in debt and had no means of paying it off. (His wife does not earn anything; he gets £1000 month state pension and has a small part time job of £400 month plus they get housing benefit of around £1000 month. Their rented flat costs £1200. He is officially retired.)

He has written to ask us to financial help and legal advice. We can give neither but assume he probably needs to go bankrupt as he has no real assets or regular income with which to pay his debts which he says are all really interest on credit cards and accounts. Where should he start for advice?

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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