Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Former_StepChange_Linsi · 22 August 2019 at 4:59PM

Hi

Welcome to the forum.

I’m sorry you couldn’t speak to an advisor when you called, we have been very busy over the past few weeks so please bear with us.

We understand how difficult dealing with debt and money worries can be, so it’s important to take care of your personal wellbeing as well as your debt. You can find more information about useful tools to help manage debt related stress here.

In your post you mentioned working sporadically as a hairdresser. Is this self-employed work or are you employed by a salon/company?

If you’re registered as self-employed then we’d recommend you speak to Business Debtline instead. They offer specialist help to the self-employed, including advice on tax implications, court proceedings and business liabilities. They will also be able to help with any debts you’re personally liable for. They’re a charity so their advice is free, impartial and confidential.

You can call them directly on 0800 197 6026, they’re open 9am to 8pm Monday to Friday. You’ll also find lots of useful information on their website.

If you’re not self-employed, you’ll need to call us (0800 138 1111) for further advice on your options. We tend to be quieter in the mornings during the week and we’re also open Saturdays, 8am to 4pm.

I hope this helps,

Linsi

Nics39 wrote: »

Hi, I’m desperate for some help. I rang you guys earlier today but with two young children I couldn’t wait any longer as one child started to cry.

I lost my business last year, my (ex)business partner told me the business was struggling, when I was 6 months pregnant. We had a massive fall out as it turned out she had hidden a multitude of things from me. So we closed the business last August, when my second baby was just 7 weeks old. At the time I wasn’t in a place mentally to deal with it all, it made me so ill with the stress and dealing with a newborn and a toddler.
The issue I have is we are 50/50 personal guarantors on the lease. The landlord is now taking us to court for over £50k. I am not on our house mortgage and I don’t have any assets like a car etc. I can’t afford a solicitor to advise me so I am representing myself.
I’m a hairdresser and work sporadically when I can around my children and when my mum can help me, but that is sometimes only 2 days per week. While the business was operating I was only earning £200 per week, even when I worked full time. I have got myself into such a financial mess, I have used credit to afford my children’s birthdays and Christmas, to clothe us and generally live. I was managing this with a set income but now some weeks I’m only earning £150, my outgoings are far exceeding my income and I now have the added stress of the court case. I am also 14 weeks pregnant again meaning come January I won’t be able to work again for some months.

My husbands wages cover all the household bills and cars, insurance etc. I pay for food, petrol for the car I drive, nursery fees for my eldest, clothes, haircuts for myself, dentist bills, my phone, as well as my debts but I’m not covering a lot of this now, my mum has been buying me petrol, food, kids clothes and giving me money towards some of my bills when I’m short and my husband helps where he can but he has absolutely nothing surplus once all the household bills have come out. My mum can’t afford to keep this up, she has no pension and is due to retire in less than 10 years time. I don’t know how we are going to manage going forward and especially with the court case. I’ve been advised by several people to go bankrupt (citizens advice and a solicitor) and I’m open to this but I just don’t know how it’ll work, how fast does it all take place? Do I carry on trying to make payments to my debts in the meantime? I’ll have to borrow the fee money from my mum to even be able to go bankrupt in the first place. My outgoings amount to around £1170 each months and my earnings around £700.

Please help me 😔 I’m so overwhelmed by it all.

Tillyjack3 · 24 August 2019 at 4:48PM

I know bankruptcy is my only option at this moment I can’t afford an IVA and my debts are too high for a DRO. But how much does it cost my situation is that stretched that even this is a problem.

Tillyjack3 · 24 August 2019 at 6:07PM

Hi can you pls help. I can’t afford the debt and I’m swimming in debt. I can’t afford the fees. I’ve looked at the charities and my previous employer was retail and most recent recruitment. I can’t find anything and by the time I pay off 700 pounds I can’t imagin the state I will be in.

Fazkhan92 · 26 August 2019 at 10:02PM

Hi all,

I'm filing for bankruptcy this Friday after having considered other options and eventually being persuaded by PayPlan to file for bankruptcy as that's my best debt solution plan.

Once I've paid the 680 this Friday and hit submit, can someone tell me what the process if after that? What I can expect etc

Would really appreciate this.

Thanks,

Faz

Former_StepChange_Linsi · 29 August 2019 at 5:20PM

Hello

Thanks for getting in touch.

The application fee in England and Wales is £680 to go bankrupt. This fee can be paid in instalments and there may be trust funds you can apply to for help paying the fee.

Turn2Us have a search tool on their website you can use to look for trust funds and grants.

I'd always recommend getting debt advice before proceeding with a solution, just to make sure you're aware of all your options and bankruptcy is the best way forward.

You can use Debt Remedy, our free online tool to create a budget and get advice. It takes about 20 minutes to complete and you’ll receive a personal action plan at the end that explains all your options. Here’s the link.

I hope this helps,

Linsi

Tillyjack3 wrote: »

I know bankruptcy is my only option at this moment I can’t afford an IVA and my debts are too high for a DRO. But how much does it cost my situation is that stretched that even this is a problem.

StepChange_Kirsty · 29 August 2019 at 5:48PM

Hi Faz,

Thanks for your post and apologies for the delay in responding.

Once your application is submitted your form will go to an adjudicator at the Insolvency Service to declare you Bankrupt.

Your case is then passed to an Official Receiver who’s job it is to investigate your situation, dispose of any assets (where applicable) and make payments to creditors (where applicable). Once they receive your file, they will request that your bank accounts are frozen temporarily in order to investigate your bank account. The Official Receiver will also arrange an appointment with you to discuss the Bankruptcy, this would normally be done over the telephone.

You would usually be discharged from Bankruptcy after 12 months but it’s important that whilst you’re declared Bankrupt that you cooperate with the Official Receiver to avoid the discharge being suspended.

I hope this gives you an idea of what to expect in the early stages. There is also some information about Bankruptcy available on our website which is available here.

Kirsty

Fazkhan92 wrote: »

Hi all,

I'm filing for bankruptcy this Friday after having considered other options and eventually being persuaded by PayPlan to file for bankruptcy as that's my best debt solution plan.

Once I've paid the 680 this Friday and hit submit, can someone tell me what the process if after that? What I can expect etc

Would really appreciate this.

Thanks,

Faz

Lynnyr3 · 31 August 2019 at 12:45AM

Hi looking for some advice please. My soon to be husband is still a joint mortgage holder with his ex wife. She stays in the house with her son (not his). She’s been advising that she’s been in discussion with the mortgage company about taking it on in her own right (he’s been trying to get some resolution) and we thought we were going to get positive news.

Today a bombshell has been dropped and she’s told him she has been made bankrupt, (apparently in February just after he told her he wanted to either sell or get it in her name). He had no idea of any issue.

She’s said the house is in negative equity. And also said her trustee won’t allow it to be sold.

Anyone any idea of where he might stand? Who he should go to for advice?

We live in Scotland.

Thanks in advance.

pendramoon · 2 September 2019 at 2:59PM

Hi all

Thank you for taking the time to read my post. I am in 40k debt with two credit cards + a personal loan. I have been working over 50 - 70 hours a week to pay everyone out but in the end of the day I always have to use what I pay back on my credit cards. I getting very tired and emotionally drained out as this has been going on for 4-5 years now. I can feel that this put a huge risk on my health now.I can feel that I can't do too much over time now.

SO I came to the conclusion I have to file for bankruptcy. Just want to know what is the process, what step it will take place? I have to complete an online form. upon submitting the for I have to pay the fee or after, before? what happens next? would people come to my rented property to take away my stuff? Don't have too much stuff. Also my Grandmother is very old and recently become more sick. She still manages OK but I think very soon she would need even more help from me. She lives abroad and just worried that they would take my passport away from me, I wouldn't be able to see her. Also my wife has a nice car what is in her name but she worries that they might take it away from us. (all my debt is in my name and I don't even drive). Also my wife is sceptical about me applying for bankruptcy as she say it has hidden issues. can you explain to me the possible negative impact on me please?

Thank you for your answer

freyaella · 2 September 2019 at 3:28PM

Hi,
I have had my IVA refused by one creditor. My debts are about £65,000.
I don't have any assests, but I do have a car on Finance which is is one year in to a 3 year option, I need the car to work and to take my daughter to school etc. If I go down the bankruptcy route, is it likely I can keep the car? I have never missed a payment on it because I need it.

Thank you

StepChange_Kirsty · 5 September 2019 at 3:06PM

Hi Lynn,

Thanks for your post and apologies for the delay in responding.

I can appreciate that’s quite a bombshell to be dropped especially when you thought you were close to a resolution.

When a person is made bankrupt in Scotland the trustee will normally obtain an Inhibition against the property to stop the bankrupt from selling or transferring the ownership or taking out any further secured lending against the property. The intention is to prevent the bankrupt from using the proceeds or sale of the property for anything else other than the bankruptcy. Unfortunately, this then has an impact on your fiance because he is not allowed to sell the property without permission of the trustee.

The inhibition last for 3 years from the date of the bankruptcy order to give the trustee enough time to sell the property. However, as you’ve mentioned the property is in negative equity so the trustee might not want to sell the it and as such may look to reach an agreement with the bankrupt party and any co-owners instead. If the trustee agrees to formally abandon their interest in the property to allow you to sell it, this would usually carry a nominal fee.

Given the ex-partner is bankrupt, it’s now very unlikely she will be able to transfer the mortgage into her own name solely which leaves the option of sale. It’s important to bear in mind that if the property was to be sold now whilst it’s in negative equity, your fiance would be solely liable for any shortfall on the mortgage.

I would recommend your fiance starts by contacting the Accountant in Bankruptcy who can put him in touch with the trustee of his ex-partner’s bankruptcy to find out what the current position is. Following this is might be worth seeking independent legal advice from a solicitor.

I hope this helps.

Kirsty

Lynnyr3 wrote: »

Hi looking for some advice please. My soon to be husband is still a joint mortgage holder with his ex wife. She stays in the house with her son (not his). She’s been advising that she’s been in discussion with the mortgage company about taking it on in her own right (he’s been trying to get some resolution) and we thought we were going to get positive news.

Today a bombshell has been dropped and she’s told him she has been made bankrupt, (apparently in February just after he told her he wanted to either sell or get it in her name). He had no idea of any issue.

She’s said the house is in negative equity. And also said her trustee won’t allow it to be sold.

Anyone any idea of where he might stand? Who he should go to for advice?

We live in Scotland.

Thanks in advance.

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