Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Alias1984 wrote: »

Hi,

I'm currently going through BR it ends in August, my bills or rent etc are about 600 that doesn't include food, fuel etc.
I want to know what I can earn and how much will be taken off of me
to pay creditors, I've been looking at jobs that get me £1000 take home a month obviously my outgoings are around 600, so how much can I keep for myself as I understand I have to pay creditors if have money left over? Just wondering if it's worth going back to work.

Many thanks

Hi there,

The Official Receiver (OR) works out payment arrangements based on what you've got left over from your income after you've covered your reasonable living costs. So there isn't a set amount, it's worked out on an individual basis.

So your bills of £600 plus your extra costs like food and travel may well swallow up the whole amount of any income you receive from a new job. Particularly as your expenses are likely to rise if you've got to get to and from your new place fo employment.

It can be hard to know if going back to work will leave you better off or not but generally speaking it's better to be working than not. If you're not sure you could contact your OR and explain the situation.

Kind regards

James

Want_to_save_money wrote: »

Hi,


Unfortunately I have debts which I am not able to pay. One of the companies I owe money to has applied to the courts to declare me bankrupt. Although scary it is also a relief as I have been struggling with the debts for around 4 years and this will save me the court costs involved in declaring myself bankrupt. My question is should I contact the other companies I owe money to and tell them that I am being declared bankrupt?

Hi there,

Thanks for posting.

If you have broken the terms and conditions of a credit agreement your creditors can petition for your bankruptcy. This is usually only if you owe £750 or more to them.

When a creditor makes you bankrupt it works the same way as if you were to petition for bankruptcy yourself. The main difference, as you mentioned, is that the creditor pays the court fees.

Due to this, there’s no real need to inform your creditors that you’re going bankrupt as the Official Receiver (OR) will let them know after the bankruptcy hearing.

It’s worth adding that companies often say they intend to petition for their client’s bankruptcy but in practice this doesn’t always happen.

If they do apply for your bankruptcy then it’s a good idea to attend the hearing, even if you don’t intend to try to stop it going ahead.

I hope this helps and if you need any advice about the bankruptcy please feel free to give our helpline a call.

Our number is 0800 138 1111 and is Freephone from most major mobile networks and landlines. Our opening hours are Mon-Fri 8am-8pm and Saturday 8am-4pm.

Jen

Hello,

Please can you help.

I was declared bankrupt July 2014 whilst on maternity leave. I am now returning to work and have informed the OR who is sending me out a form to fill in regarding my pay (I'm assuming to look at wether or not I will need to enter into an IPA). If at all possible I would like to avoid an IPA as I would like to move on with my life at the end of the bankruptcy as best as possible.

1. Are there any guidelines to reasonable living expenses that I can refer to?
2. I am living with my ex partner (this information was put in my bankruptcy order), it is his house and I pay half of everything. We are not linked financially. Will this make any difference?

Thank you very much.

Flower2014 wrote: »

Hello,

Please can you help.

I was declared bankrupt July 2014 whilst on maternity leave. I am now returning to work and have informed the OR who is sending me out a form to fill in regarding my pay (I'm assuming to look at wether or not I will need to enter into an IPA). If at all possible I would like to avoid an IPA as I would like to move on with my life at the end of the bankruptcy as best as possible.

1. Are there any guidelines to reasonable living expenses that I can refer to?
2. I am living with my ex partner (this information was put in my bankruptcy order), it is his house and I pay half of everything. We are not linked financially. Will this make any difference?

Thank you very much.

Hello,

It's usually best to just put down what you actually spend. That way you know that the budget you're putting down is realistic and workable.

I can't see any reason why living with yoru ex-partner would cause any issues. The imporant thing is to make sure that the OR can understand how the bills are worked out and what your money is being used to pay for.

An IPA is worked out based on deducting your living costs from your income, so doing some quick sums with the figures you put on the forms should give you a rough idea of what the OR is likely to think.

Kind regards

James

Theseemstress wrote: »

hi there. Newbie here. My wife and I declared bankruptcy 2 weeks ago and it was accepted by the judge. We have our interviews with the OR next week. We owe 120k in unsecured personal debt between us and own a property worth 150k that we have walked away from. I am scared as this is a hard time.

I wanted to know if it is usual for the OR to look in real detail as to our spending habits from bank statements or credit card statements?

Nothing in particular to hide but last few months we have resorted to taking cash out via credit cards as couldn't afford day to day living costs as we were drowning but I'm denial.

Would they usually request to see printed full statements and go through with a fine tooth comb? Nowadays everything is online so don't really have much in the way of paper statements. Would we be judged improper if we had resorted to taking cash from credit cards?

Any experiences appreciated.

Thank you.

Hi there,

Thanks for getting in touch and welcome to the forum. It’s common for the official receiver to look at your spending habits in detail – although this isn’t always pleasant, it’s a normal part of the bankruptcy process.

I’d recommend you provide as much information as the official receiver asks for. If you use online banking you can often download your bank statements, or you can get in touch with your bank to ask them to send you a paper copy in the post.

In terms of taking cash out via your credit cards, this is something I’d suggest you discuss with the official receiver. We always recommend being open and honest with your official receiver about your situation.

I hope this helps.

Kind regards,
Laura