Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Crowlikethebird · 24 April 2018 at 8:40AM

Hi
I am currently in 36k worth of debt. I am struggling to decide whether to go down the IVA route or bankruptcy.
I do not have any assets. I live in a private rental. I work in a sector where I would not be impacted by bankruptcy.
I have been in touch with a charity who have referred me to an IVA company but they seem very keen to get me started on an IVA when I need to check all my options.
I do have more than £50 left after essential bills but not enough to meet min repayments anymore.
I have a 9yo and my main priority is to get out of this situation ASAP.
Any advice would be gratefully received.

StepChange_Allen · 24 April 2018 at 8:57AM

Crowlikethebird wrote: »

Hi
I am currently in 36k worth of debt. I am struggling to decide whether to go down the IVA route or bankruptcy.
I do not have any assets. I live in a private rental. I work in a sector where I would not be impacted by bankruptcy.
I have been in touch with a charity who have referred me to an IVA company but they seem very keen to get me started on an IVA when I need to check all my options.
I do have more than £50 left after essential bills but not enough to meet min repayments anymore.
I have a 9yo and my main priority is to get out of this situation ASAP.
Any advice would be gratefully received.

Hi there

Welcome to the forum and thanks for posting.

We can certainly assess your finances and see which debt solutions are available to you; and then assist you with that solution. You can register via our telephone service (please see www.stepchange.org/Contactus) or by using our online Debt Remedy tool: www.stepchange.org/DebtRemedy

I hope this helpful, we look forward to speaking with you.

Allen

Crowlikethebird · 24 April 2018 at 2:45PM

Thanks Allen.

I have been in touch already with Step Change. I think what I am asking is as I do not have any assets, is there much difference in going bankrupt compared with getting an IVA?
Other than the upfront cost of the bankruptcy there do not seem to be any massive drawbacks when compared with IVA as both wreck credit rating, etc.
An IVA is a much longer haul. Whilst I am keen to repay my debts I am more keen to get back on an even keel sooner.

Yvettedondo · 24 April 2018 at 6:42PM

My partner is due to get inheritance money, not a lot but we are concerned we will not get this due to our das. We need new things like freezer cooker and new dishwasher as all on their way out. Can we use this money or do we not even receive it does it go straight to the DAS people

StepChange_Rachael · 27 April 2018 at 10:59AM

Hi

Thanks for your reply.

If you’ve been in touch with StepChange I would suggest getting back in contact to discuss your options further, the reason is that it’s difficult to give accurate advice on your specific situation without being able to see it fully.

In general the benefits of bankruptcy to an IVA for someone might be that they don’t have any assets that would be impacted, it won’t affect their work or housing situation and it’s a quicker way of becoming debt free. The fee for some might not be an issue if they can get help through family/friends, trust funds etc.

For one person an IVA may be the preferable solution and for another bankruptcy. If both solutions have been recommended because they have a good chance of success then it’s usually up to personal preference, but I would encourage you to discuss it further with a free advisory service where they can see your budget and financial situation.

If you'd like to get back in contact with us you can find out contact details here.

Thanks
Rachael

Crowlikethebird wrote: »

Thanks Allen.

I have been in touch already with Step Change. I think what I am asking is as I do not have any assets, is there much difference in going bankrupt compared with getting an IVA?
Other than the upfront cost of the bankruptcy there do not seem to be any massive drawbacks when compared with IVA as both wreck credit rating, etc.
An IVA is a much longer haul. Whilst I am keen to repay my debts I am more keen to get back on an even keel sooner.

StepChange_Rachael · 27 April 2018 at 11:15AM

Hi

Welcome to the forum and thanks for posting.

You don't need to worry, inheritance or any other type of windfall won't need to be included in to your debt payment program (DPP). You can use this money however you wish for example home repairs.

Hope this helps.

Thanks
Rachael

Yvettedondo wrote: »

My partner is due to get inheritance money, not a lot but we are concerned we will not get this due to our das. We need new things like freezer cooker and new dishwasher as all on their way out. Can we use this money or do we not even receive it does it go straight to the DAS people

K3rrii3 · 9 May 2018 at 12:51PM

Hi, quick question !!!128522;
What happens to my accounts (catalogues) when my DMP finishes? They aren't defaulted, just show on my CF that they're being paid through a PP.
Do I get the accounts back or can they still default them once they're settled?
Thanks in advance!

StepChange_Kirsty · 9 May 2018 at 5:39PM

Hi there,

Thanks for your post and welcome to the forum.

It would be up to your catalogue companies if they want to keep you on as a customer when you have finished your debt management plan (DMP). The companies should not wait to default you once the debt is fully repaid, if you’ve missed payments or are paying less than the contractual payments to your creditors then they would normally send you a default notice within 3 to 6 months of first missing your contractual payments.

If the DMP is with us at StepChange, you cannot continue to use or take out any new credit whilst in your DMP as this would be a breach of your DMP agreement. Even if you can use the accounts again once the DMP ends I would advise against doing so unless you were to pay for the items in full each time. Instead I would recommend that you start setting aside the money you were using for the DMP into a savings account and when something does come up that you need to buy you’ll have already budgeted for it. This would avoid you running into difficulty again in the future.

All the best.

Kirsty

K3rrii3 wrote: »

Hi, quick question !!!128522;
What happens to my accounts (catalogues) when my DMP finishes? They aren't defaulted, just show on my CF that they're being paid through a PP.
Do I get the accounts back or can they still default them once they're settled?
Thanks in advance!

Standbystomach · 16 May 2018 at 6:26PM

Hi

I declared bankruptcy in 2012.
I believe the bankruptcy stays active on my credit report for 7 years. Fair enough.
I've just seen my credit report and the items that were declared on my bankruptcy are on it and have recently been updated.

The question is: is this normal?

My credit rating is 537 which doesn't appear to be much lower than the average in my area. Fingers crossed and role on next year!

Thanks in advance

StepChange_Rachael · 17 May 2018 at 3:16PM

Hi

Thanks for posting and welcome to the forum.

Notices on your credit file normally stay active for 6 years and are then automatically removed. However, in certain circumstances they may stay on a credit file longer for example if you have a bankruptcy restriction arrangement or order in place, in these cases the notice of bankruptcy can stay on your credit file for as long as this is in place, potentially up to 15 years.

As you’ve not mentioned what the creditors have updated on your credit file it’s difficult to say if this is normal process. It might be worth checking with a credit file reference agency to find out what creditors are able to update on your credit file under certain circumstances such as bankruptcy. The three reference agencies in the UK are Equifax, Experian and Call Credit (Noddle).

Hopefully the notice will fall off your credit file soon as it’s been 6 years since the bankruptcy petition.

Take care
Rachael

Standbystomach wrote: »

Hi

I declared bankruptcy in 2012.
I believe the bankruptcy stays active on my credit report for 7 years. Fair enough.
I've just seen my credit report and the items that were declared on my bankruptcy are on it and have recently been updated.

The question is: is this normal?

My credit rating is 537 which doesn't appear to be much lower than the average in my area. Fingers crossed and role on next year!

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