Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Hitmanandher · 17 July 2018 at 12:19AM

I am having sleepless nights working about a creditor bankrupting us. We are in a DMP (self managed) and they have accepted very small payments for last 3 years. However they have not sold the debt on. The amount we are owe is over 50k, roughly the equity in our home.
All the info I find on bankruptcy is about people making themselves bankrupt. What is like to know is, do creditors do it to people with unsecured debts? With thanks

StepChange_Allen · 17 July 2018 at 8:42AM

Hitmanandher wrote: »

I am having sleepless nights working about a creditor bankrupting us. We are in a DMP (self managed) and they have accepted very small payments for last 3 years. However they have not sold the debt on. The amount we are owe is over 50k, roughly the equity in our home.
All the info I find on bankruptcy is about people making themselves bankrupt. What is like to know is, do creditors do it to people with unsecured debts? With thanks

Hi there

Thanks for posting.

It's possible for a creditor to try and bankrupt someone, but in the majority of cases it would only be considered if they would gain something as a result. For example, if someone owned a valuable property but had no cash flow each month, and wouldn't consider releasing equity, a creditor may try and make them bankrupt to force sale of the property and get paid out.

However, this isn't common and in the scenario you explain with your debt and equity, it's unlikely though not impossible. By the time bankruptcy costs and fees were considered, and the property probably selling undervalue at auction, there's no guarantee that they would get their money back.

Has something led you to worry about the possibility, has a creditor mentioned something?

Best wishes

Allen

Megmeg · 18 July 2018 at 7:38AM

I went bankrupt in 2017 but wanting to a degree will this effect me getting a student loan or do y Y think I should look into getting my bankruptcy lifted???

Former_StepChange_Joe · 18 July 2018 at 11:04AM

Hello

Thanks for posting.

A bankruptcy can’t be reversed or lifted, as such. It can be ‘annulled’, which is when the court cancels a bankruptcy order. This can only happen in the following circumstances:

The bankruptcy order should not have been made, for example because of an error in the process
You can pay or secure all of their debts and the Insolvency Service's and any trustee's fees.
An IVA can be agreed with the creditors as an alternative.

However, bankruptcy won’t impact your ability to apply for a place at university, or your eligibility for a student loan. According to the GOV.uk website, whether you qualify for student finance depends on:

your university or college
your course
if you’ve studied a higher education course before
your age
your nationality or residency status

I hope you’ve found this helpful.

Thanks

Joe

Megmeg wrote: »

I went bankrupt in 2017 but wanting to a degree will this effect me getting a student loan or do y Y think I should look into getting my bankruptcy lifted???

TopsyMum · 24 July 2018 at 9:24AM

Stepchange debt remedy tool suggests bankruptcy but I'm not sure, seems so big!! And also What do you actually have to do/supply to become bankrupt when you apply?? What reasons do they ask??
Worried they'll pick apart all bank statements etc and scrutinise everything then refuse? I know I've been stupid. And there are personal circumstances but I do t want to be effectively selling a sob story

Mark_Myx · 24 July 2018 at 2:57PM

Hello .. I've I'm going through a bankruptcy process being brought against me from HMRC. The petition date is for Mon 31 July 2018, in a few days time. I've owed them back taxes for a number of years which I failed to deal with at the time. My partner was diagnosed with cancer a few years back, this is when the mess started. Her illness lasted three years and she died in Nov 2012, we have daughter who was 12 at the time. I now know I was suffering from depression during and after this period, which resulted in my debt, currently £ 45,000. My main concern is keeping positive for my daughter.

My question is on the date of the petition hearing is this when my bankruptcy will begin ?
Do I have to be there ?

StepChange_Kirsty · 25 July 2018 at 9:43AM

Hi there,

Thanks for your message.

In order to apply for Bankruptcy you will need to complete the online application at https://www.gov.uk/apply-for-bankruptcy. When you apply for Bankruptcy you'll need to make sure you have any wage slips, benefit or pension statements, bills and letters from any bailiffs or enforcement agents to hand.

If you’re looking at Bankruptcy you can start the online form and see which questions you’ll need to answer that apply to your circumstances. You don’t actually need to submit the form until you feel ready and you'll also have needed to pay the fee of £680.

As you’ve completed our online Debt Remedy tool, if you’re not sure if Bankruptcy is right for you I would recommend giving us a call on 0800 197 1704 in order to speak to a Debt Advisor. We’re available Monday to Friday 8am to 8pm and Saturday 9am to 2pm.

You can also speak to the Insolvency Service who may be able to tell you more about what they would be looking out for on your bank statements. They’re available Monday to Friday 9am to 5pm on 0300 678 0015.

All the best

Kirsty

TopsyMum wrote: »

Stepchange debt remedy tool suggests bankruptcy but I'm not sure, seems so big!! And also What do you actually have to do/supply to become bankrupt when you apply?? What reasons do they ask??
Worried they'll pick apart all bank statements etc and scrutinise everything then refuse? I know I've been stupid. And there are personal circumstances but I do t want to be effectively selling a sob story

StepChange_Kirsty · 25 July 2018 at 10:08AM

Hi Mark,

Thanks for your post and welcome to the forum.

I’m sorry to hear about your partner’s illness, it sounds like this will have been a very difficult time for you and your family.

If the creditor’s petition is successful then yes the date of the hearing is when the Bankruptcy period will begin. We would always recommend you attend the hearing whether or not you plan to oppose the Bankruptcy. If you do intend to oppose the Bankruptcy then attending the hearing is essential.

I would recommend you look into whether or not Bankruptcy would be right for your circumstances by speaking to a Debt Advisor. You’ve mentioned the petition has been made by HMRC due to unpaid taxes. If you’re self-employed I would recommend speaking to Business Debtline who can let you know if allowing the Bankruptcy would be best taking into consideration the effects it would have on your business.

If you’re not self-employed you can speak to ourselves at StepChange and we can offer you help and advice on your best solutions for dealing with the outstanding debt.

I hope this helps,

Kirsty

Mark_Myx wrote: »

Hello .. I've I'm going through a bankruptcy process being brought against me from HMRC. The petition date is for Mon 31 July 2018, in a few days time. I've owed them back taxes for a number of years which I failed to deal with at the time. My partner was diagnosed with cancer a few years back, this is when the mess started. Her illness lasted three years and she died in Nov 2012, we have daughter who was 12 at the time. I now know I was suffering from depression during and after this period, which resulted in my debt, currently £ 45,000. My main concern is keeping positive for my daughter.

My question is on the date of the petition hearing is this when my bankruptcy will begin ?
Do I have to be there ?

stevieatlas · 26 July 2018 at 1:04AM

Can i take out a high interest payday loan of £700 to pay for the bankruptcy? (if I pass their credit check) - I feel the answer will be no, but if there's a way that would be great!

My debt level is 21,000 , it's over the DRO level by 1000 as I share a £2000 estate agent fee debt with my silly ex wife, Is there any way I can get a DRO?

:beer:

Former_StepChange_Patience · 26 July 2018 at 2:02PM

Hi there

Thanks for getting in touch.

I understand your concerns with paying for the bankruptcy fee and as you mentioned taking out additional credit to cover this such as a high interest pay day loan may not be the best way to cover this.

Taking out additional credit to cover the fee may be considered an ‘offence’ by the Official Receiver (OR).

It may be the case they would look into your financial history in closer detail if there are any ‘offences’ they believe have taken place, you can find out further information about this here: https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/bankruptcy-offences/

If however you already have available credit, you may be able to use this to pay for the bankruptcy.

Another option, instead of using credit to cover this could be to save for the fee. You can pay it in instalments but the full amount will need to be paid before it can be submitted or you could consider looking into a trust fund or grant.

You can do a grant search here: https://www.turn2us.org.uk/

The Insolvency Service do have a set criteria for a debt relief order (DRO), but if you would like to get an idea of the alternative options you could look at, StepChange have an anonymous online tool you could try and you can find it here: https://www.stepchange.org/Debtremedy.aspx

I hope this helps.

Patience

stevieatlas wrote: »

Can i take out a high interest payday loan of £700 to pay for the bankruptcy? (if I pass their credit check) - I feel the answer will be no, but if there's a way that would be great!

My debt level is 21,000 , it's over the DRO level by 1000 as I share a £2000 estate agent fee debt with my silly ex wife, Is there any way I can get a DRO?

:beer:

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free