Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Hi

My partner is seriously considering bankruptcy but has a few concerns/questions:

1. Would the bankruptcy affect a small pension he currently receives, would this be considered as income?

2. Also, he 'may' have the option to take a pension lump some in the future, again, how would this be affected by bankruptcy?

3. Finally, in relation to an income payment order, if he is clearing his debts so to speak, would the surplus income all be sucked up on an income payment order. For example, if he currently pays £300 a month on a personal loan repayment which is part of his bankruptcy, would that £300 then be automatically used as disposable income? which in effect would just leave him back at square one with no excess income to live on?

The debt has accrued over the past 3 years following the tragic death of his son, leaving him with thousands of pounds on funeral expenses etc on credit cards, followed by a long period of time off work due to the bereavement which was unpaid, although he did receive a very small amount of SSP. Then the past 3 years of stress has caused him to have further unpaid sick leave from work. He is not getting any younger, has a manual job which he is now struggling to carry out and would be looking to find a less strenuous job with less pay if and when he petitions for bankruptcy.

Any help would be appreciated.

Many thanks in advance.

I hope that all makes sense!

Many thanks in advance.

Hi
I was bankrupt in April 2009 and discharged in September of the same year. I've already discovered that a PPI reclaim payment (from a loan I repaid in 2005) will be going to the receiver, I just want to make sure that if I was to inherit (or win) any money now that I would be entitled to it. Would I have to inform the receiver of any windfall I receive now?

MW13 wrote: »

Hi
I was bankrupt in April 2009 and discharged in September of the same year. I've already discovered that a PPI reclaim payment (from a loan I repaid in 2005) will be going to the receiver, I just want to make sure that if I was to inherit (or win) any money now that I would be entitled to it. Would I have to inform the receiver of any windfall I receive now?

Hi MW13,

Thanks for posting.

Any PPI refunds due that were taken out before your bankruptcy would become the property of the Official Receiver.

Assets which you acquire or money you receive after you are discharged doesn't form part of the bankruptcy and you should be able to keep them.

Hope this helps,

Rory

I'm considering declaring myself bankrupt due to my level of debt. It totally goes against my grain - I've worked in finance for 23 years - but walking away with virtually nothing from the sale of my house with my ex-partner, setting up a new home plus continuing ill health with no sick pay has led to this situation which feels insurmountable.

I have two loans which both finish next year and five credit cards. All are in my sole name but the balances far outweigh my income. I have tried to get a new credit card to do a balance transfer but keep being declined (unsurprising) so now the interest free periods are going to start expiring and I have nowhere to move the balances to.

I work part time due to a disability but have hardly been at work this year due to ill health. I only receive SSP which is due to run out soon. I'm considering finishing work on medical retirement grounds. I work for a small company so there is no kind of official procedure. They have mentioned a potential settlement if I cannot return to work but I think it would only be a couple of thousand.

I have no pension or life insurance. No assets whatsoever actually.

I'm jointly named on a tenancy with my partner. We also have a joint bank account. He has a civil service pension but no other assets. He really did walk away with nothing from his previous relationship.

I'm really not bothered about taking out any more credit in the future or being named on a mortgage but I need to know what implications my bankruptcy would have on my partner. We're not married.

Any help greatly appreciated.

Raspberry_Ripley wrote: »

I'm considering declaring myself bankrupt due to my level of debt. It totally goes against my grain - I've worked in finance for 23 years - but walking away with virtually nothing from the sale of my house with my ex-partner, setting up a new home plus continuing ill health with no sick pay has led to this situation which feels insurmountable.

I have two loans which both finish next year and five credit cards. All are in my sole name but the balances far outweigh my income. I have tried to get a new credit card to do a balance transfer but keep being declined (unsurprising) so now the interest free periods are going to start expiring and I have nowhere to move the balances to.

I work part time due to a disability but have hardly been at work this year due to ill health. I only receive SSP which is due to run out soon. I'm considering finishing work on medical retirement grounds. I work for a small company so there is no kind of official procedure. They have mentioned a potential settlement if I cannot return to work but I think it would only be a couple of thousand.

I have no pension or life insurance. No assets whatsoever actually.

I'm jointly named on a tenancy with my partner. We also have a joint bank account. He has a civil service pension but no other assets. He really did walk away with nothing from his previous relationship.

I'm really not bothered about taking out any more credit in the future or being named on a mortgage but I need to know what implications my bankruptcy would have on my partner. We're not married.

Any help greatly appreciated.

Hi Raspberry Ripley

Welcome to the forum,

It sounds like you've had a really difficult time and I can understand your need to get your finances back on track and move forward.

Bankruptcy would only affect your partner if you have any joint finances such as your joint bank account and being married doesn't automatically link you financially. If there is an overdraft on the joint account then this will be written off in your name, however your partner would then be liable to pay any remaining balance.

The joint account is also likely to be closed if you declare bankruptcy and there is an outstanding overdraft. If the account is in credit then a simple way to resolve this is to separate the account and remove you or your partner’s name. Some banks may not let you separate the account if there is an overdraft but each lender is different so it’s worth asking them.

With your tenancy, it depends on the tenancy agreement and whether the terms and conditions state that bankruptcy would impact you. This is always something to check with your landlord or agency to see how they can help.

Bankruptcy is just one of many debt solutions to help you regain control over your finances and we can help look at the whole situation and offer you impartial and tailored advice in this situation.

We can put together a budget with you to see if we feel that bankruptcy is your best way forward. We can also offer support and answer any questions you have.

You can contact us by visiting our website or using our anonymous Debt Remedy tool available here.

All of our advice is free, confidential and always based on what’s right for you. Try not to feel like you have to deal with this alone and get in touch with us if you need help.
I hope this helps
Rory