Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

StepChange_Allen · 13 August 2018 at 9:33AM

SFROSTY wrote: »

just a quick question re BR.
I earn at present £359 per week after stoppages,I can boost this pay weekly by overtime usually around an extra £30-£35.Also I can earn a lot extra if I wish to work my rest week.What %of overtime does a OR consider taking ?In short is it going to be worth it?

Hi there

Thanks for posting.

All overtime and bonuses are treated as income by the OR and all would be taken if you have an income payment arrangement (IPA) in place.

I can't say much more without knowing anything about your financial situation; if you'd like some debt advice, please have a look on our website at how to get started: www.stepchange.org/Contactus

I hope this helps.

Allen

DebtFreeWannabe31 · 15 August 2018 at 12:06PM

Hi

I'm hoping someone can help me as I think I have been given a default on my credit report unfairly.
In 2009 I was struggling to pay my debts so instructed a debt management company called Money Tailor - I believe they no longer exist.
They took over managing my debts and I paid the same monthly payments to them for the entire time of the debt management programme and never missed a payment - all of my lenders then contacted Money Tailor directly and no letters got sent to myself - Money Tailor agreed all monthly payments with the lenders.
However one lender - Arrow Global Limited agreed with the debt management programme an amount and this was paid every month directly from Money Tailor, then in 2016 a default was put on my credit report as it turned out money tailor were not paying them the set amount agreed with Arrow Global but i had no idea about this as they contacted each other directly.
Upon discovering the default and the issue I cancelled my debt management programme with Money Tailor having nearly done 5 years with them and agreed the amounts with lenders myself as their wasn't much left to pay by this time. - all accounts were settled in full in 2016.

So basically for a debt that was being dealt with from 2009 with a debt management company and a lender, i got a default in 2016 for it and wondered if their would be anyway this could be removed as I don't believe i should have had it. - if i was to be defaulted then i believe it should have been in 2009 when i couldn't afford to pay them and started the process with the debt management company not in 2016 - 7 years later when my credit report was just starting to pick up!
Any help would be greatly appreciated.

Many thanks
Gemma

StepChange_Kirsty · 15 August 2018 at 3:35PM

Hi Gemma,

Thanks for your post and welcome to the forum.

Generally speaking a creditor would usually issue a default notice around 3 to 6 months after you first start reducing or missing payments. Some creditors will hold off on a default if you have made an agreement with them and have stuck to it which appears to be what has happened here. If Money Tailor changed the amount they were paying this may explain why the default has been registered so long after the debt management plan started.

As Arrow Global are a debt purchaser, if the debt it relates to was regulated by the Consumer Credit Act then the original creditor should have registered the default before they sold the debt. Also as the debt can only default once, Arrow Global should not have been the ones to register the default. It may be worth finding out when Arrow Global took over the debt and as a minimum the default should be backdated to before the debt was sold.

If you feel there was an unreasonable delay in registering the default you can make a complaint. First of all to the company who registered the default and then if necessary (if you are unhappy with the response or you haven’t received a response after 8 weeks) you can escalate the complaint to the Financial Ombudsman Service who will be able to investigate this further.

I hope this helps.

Kirsty

DebtFreeWannabe31 wrote: »

Hi

I'm hoping someone can help me as I think I have been given a default on my credit report unfairly.
In 2009 I was struggling to pay my debts so instructed a debt management company called Money Tailor - I believe they no longer exist.
They took over managing my debts and I paid the same monthly payments to them for the entire time of the debt management programme and never missed a payment - all of my lenders then contacted Money Tailor directly and no letters got sent to myself - Money Tailor agreed all monthly payments with the lenders.
However one lender - Arrow Global Limited agreed with the debt management programme an amount and this was paid every month directly from Money Tailor, then in 2016 a default was put on my credit report as it turned out money tailor were not paying them the set amount agreed with Arrow Global but i had no idea about this as they contacted each other directly.
Upon discovering the default and the issue I cancelled my debt management programme with Money Tailor having nearly done 5 years with them and agreed the amounts with lenders myself as their wasn't much left to pay by this time. - all accounts were settled in full in 2016.

So basically for a debt that was being dealt with from 2009 with a debt management company and a lender, i got a default in 2016 for it and wondered if their would be anyway this could be removed as I don't believe i should have had it. - if i was to be defaulted then i believe it should have been in 2009 when i couldn't afford to pay them and started the process with the debt management company not in 2016 - 7 years later when my credit report was just starting to pick up!
Any help would be greatly appreciated.

Many thanks
Gemma

Fifiwench17 · 17 August 2018 at 5:03PM

I am thinking of filing for bankruptcy but was wondering if the OR accepts payments to family in your budget. I owe my mum and brother in law around £6000.
We have joint tax credit,council tax and rent arrears. Husband's name is on tax credit,council tax bill and rent account. Will all those debts become my husband's if i go BR ?

Thanks

StepChange_Rachael · 21 August 2018 at 8:26AM

Hi

Welcome to the forum and thanks for posting.

Once you apply for bankruptcy the OR will look into the financial position and decide how the bankruptcy will be formed. The OR can set an income payment arrangement (IPA) into the bankruptcy if there's money left over after general living costs and household bills have been paid. The OR is highly unlikely to allow money to be paid to family and friends during bankruptcy and this debt would be legally written off through the bankruptcy. Any money you set aside in your budget for family and friends is likely to form part of the IPA to all your creditors, this means your family would receive some payment but this is likely to be much smaller than the amount you’d agreed.

Any debts that are in joint name including household bills will become the full responsibility of the other party. So yes your husband would become responsible for paying them back if he wasn’t also going ahead with insolvency.

Bankruptcy can be a great solution for some people, however there are many different types of debt solutions, and different types of insolvency.

If you haven’t already, I’d recommend getting tailored debt advice to explore all your options. You can find a link to Stepchange self-help tool Debt Remedy here.

Thanks
Rachael

Fifiwench17 wrote: »

I am thinking of filing for bankruptcy but was wondering if the OR accepts payments to family in your budget. I owe my mum and brother in law around £6000.
We have joint tax credit,council tax and rent arrears. Husband's name is on tax credit,council tax bill and rent account. Will all those debts become my husband's if i go BR ?

Thanks

realgonekid_2 · 25 August 2018 at 12:53PM

Step change,

What damages are excluded from bankcrupty( only personal injury ( mental and physical) and what damages can be included in bankruptcy?

joeyhawks · 28 August 2018 at 9:57AM

Hi
I am a single parent, no maintenance or child support, employed full time but have about 26k of credit card debts which means my outgoings exceed my income and therefore I rely on using credit to pay for essentials such as food and petrol. Despite my best efforts, I have come to the realisation that the debt is affecting my mental health and have decided to get help. I have looked into IVA and bankruptcy which looks like the best option, but I was wondering what is the longer term impact if I go down the bankruptcy route - what restrictions would I be under and for how long?

Thanks for lending an ear .....

StepChange_Rachael · 28 August 2018 at 10:35AM

Hi

Thanks for posting.

There are different types of debt that aren’t included in insolvency solutions like bankruptcy, but in terms of damages then yes debts from personal injury claims aren’t included. So for example if a car wasn’t insured and in an accident there was a personal injury claim this wouldn’t be written off with insolvency. If the claim was for damages to the vehicle then they would be included.

Also all financial penalties made by a magistrate’s court or by a higher criminal court also aren’t written off. This includes fines, costs orders, compensation orders and victim surcharges.

Hope this helps.

Thanks
Rachael

realgonekid wrote: »

Step change,

What damages are excluded from bankcrupty( only personal injury ( mental and physical) and what damages can be included in bankruptcy?

StepChange_Rachael · 28 August 2018 at 10:43AM

Hi

Welcome to the forum.

You’ll find a message answering your query in your inbox, I’ve just responded to the private message you’d sent earlier.

Thanks
Rachael

joeyhawks wrote: »

Hi
I am a single parent, no maintenance or child support, employed full time but have about 26k of credit card debts which means my outgoings exceed my income and therefore I rely on using credit to pay for essentials such as food and petrol. Despite my best efforts, I have come to the realisation that the debt is affecting my mental health and have decided to get help. I have looked into IVA and bankruptcy which looks like the best option, but I was wondering what is the longer term impact if I go down the bankruptcy route - what restrictions would I be under and for how long?

Thanks for lending an ear .....

realgonekid_2 · 28 August 2018 at 9:16PM

Thank you for the previous answer

Would you be able to advise if Damages for Distress could be included in a bankruptcy order?

Thanks

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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