Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Littlealfiesmum · 23 January 2018 at 8:45AM

Hi my partner is about to declare bankruptcy because of a failed IVA he has debts from a period of ill health

His current employment contract has ended & due to a period of unstable MH he is now reviewing PIP & focusing on recovery before attempting Work again
He has 2 children he pays CM for.

My question is how long do the payment plans after bankruptcy last?

We’re getting married & I would like to move house (house is mine) & in the next year or 2 would like a baby meaning household expenses would be paid more by him as I’d be on maternity. I guess I am anxious about moving & struggling to pay because of all the extra money going on the payment plan.

He’s signed off work for the next month & will be signed off again due to having surgery & his MHso will this effect any payment plans?

StepChange_Rachael · 23 January 2018 at 10:06AM

Hi

Thanks for your post and welcome to the forum.

I’m sorry to hear your partner is going through a difficult time at the moment.

Once a bankruptcy petition is made the Official Receiver (OR) can set an income payment arrangement (IPA) for up to 3 years. This will usually happen when the household budget shows there is more than £20 a month available at the end of the month. This would be set as a monthly payment towards the bankruptcy.

If there are changes in your partner’s financial situation and an IPA is set then your partner would need to contact the OR and discuss these changes.

If your partner hasn’t already then I’d suggest getting free and impartial third party advice before submitting the petition. Especially as you’ve mentioned you own a property. It’s possible the OR may want to check for any beneficial interest that your partner may have if you live together.

You or your partner could also contact the Insolvency Service. They should be able to answer questions about bankruptcy in more detail so you’ll have a good idea of how changes would affect an IPA based on your partners situation.

Take care
Rachael

Littlealfiesmum wrote: »

Hi my partner is about to declare bankruptcy because of a failed IVA he has debts from a period of ill health

His current employment contract has ended & due to a period of unstable MH he is now reviewing PIP & focusing on recovery before attempting Work again
He has 2 children he pays CM for.

My question is how long do the payment plans after bankruptcy last?

We’re getting married & I would like to move house (house is mine) & in the next year or 2 would like a baby meaning household expenses would be paid more by him as I’d be on maternity. I guess I am anxious about moving & struggling to pay because of all the extra money going on the payment plan.

He’s signed off work for the next month & will be signed off again due to having surgery & his MHso will this effect any payment plans?

Littlealfiesmum · 23 January 2018 at 10:13AM

Thank you, we don't currently live together and wont until the wedding in March 2018. Hoping to get this all sorted before then, we're running out of time I know but the house is mine and i've owned it since 2006. He will move in with me after the wedding.

pinkmum3 · 23 January 2018 at 7:05PM

Hi I'm looking for some support and advice please. I'm a single mum in approximately £25000 debt on credit cards. Atleast £10000 of this is due to me being stupid and letting an ex boyfriend put credit in my name. The rest is probably down to me trying to juggle things on my own without any maintenance from the kids father. I've tried until now to stay on top of things and am not in any arrears as yet, but I'm thinking I can't do this much longer. If I'd done it way back when I first looked into it I'd be discharged by now, but I keep trying to give it another go and keep plodding on. I first and foremost am scared about people knocking on my door, etc and keeping a roof over our heads. Second to that I've been trying to maintain a good credit rating as I rent privately, but to be perfectly honest that hasn't helped me at all anyway as the minute agents find out I get top up benefits and have pets they don't want to know anyway. Btw I am working. My rent at the moment is quite steep and as I said I've been unable to find anywhere cheaper, but if I was to take this step I'd be ok to stay on here. I'm just so scared of the prospect of doing this and feel like such a failure. If I was to go ahead I'd have to send token payments until I'd managed to save up the fee. I'm so mad that without the ex's debt I'd be able to do a DRO instead, but not sure that's any better at the end of the day. StepChange tool thingy has advised that bankruptcy is the way to go.

Former_StepChange_Linsi · 24 January 2018 at 4:41PM

Hello

Thanks for your post and welcome to the forum.

I’m sorry you’re feeling so worried about your debts and going bankrupt. You’re certainly not a failure and it sounds like you’ve done everything you can to manage these debts.

It looks like bankruptcy would give you a fresh start and you wouldn’t need to worry about your credit card providers taking any further action or coming to your home.

As you’ve already used our Debt Remedy tool I’d recommend giving us a call so we can look over your budget and answer any questions or concerns you may have about bankruptcy. Our number is on the first page of your personal action plan.

We’ll also be able to give some more advice about managing your debts during the interim period and suggest a few organisations you may be able to contact to get help towards the fees.

The Insolvency Service also has a helpline you can call for further guidance. Their number is 0300 678 0015.

We look forward to hearing from you soon.

Linsi

pinkmum3 wrote: »

Hi I'm looking for some support and advice please. I'm a single mum in approximately £25000 debt on credit cards. Atleast £10000 of this is due to me being stupid and letting an ex boyfriend put credit in my name. The rest is probably down to me trying to juggle things on my own without any maintenance from the kids father. I've tried until now to stay on top of things and am not in any arrears as yet, but I'm thinking I can't do this much longer. If I'd done it way back when I first looked into it I'd be discharged by now, but I keep trying to give it another go and keep plodding on. I first and foremost am scared about people knocking on my door, etc and keeping a roof over our heads. Second to that I've been trying to maintain a good credit rating as I rent privately, but to be perfectly honest that hasn't helped me at all anyway as the minute agents find out I get top up benefits and have pets they don't want to know anyway. Btw I am working. My rent at the moment is quite steep and as I said I've been unable to find anywhere cheaper, but if I was to take this step I'd be ok to stay on here. I'm just so scared of the prospect of doing this and feel like such a failure. If I was to go ahead I'd have to send token payments until I'd managed to save up the fee. I'm so mad that without the ex's debt I'd be able to do a DRO instead, but not sure that's any better at the end of the day. StepChange tool thingy has advised that bankruptcy is the way to go.

Former_StepChange_Linsi · 24 January 2018 at 5:01PM

Hi

Thanks for coming back to us.

I would still recommend speaking to the Insolvency Service or seeking some legal advice before your partner goes bankrupt.

Even though the house is yours and has been since 2006 your partner may have a legal claim on the property once you’re married or once he moves in with you.

I hope this helps.

Linsi

Littlealfiesmum wrote: »

Thank you, we don't currently live together and wont until the wedding in March 2018. Hoping to get this all sorted before then, we're running out of time I know but the house is mine and i've owned it since 2006. He will move in with me after the wedding.

davidsonsl · 25 January 2018 at 10:02AM

Hi all

My husband has owed a business for 6 years, just under 2 years ago there was a change that affected the business & he took out loans to keep it going.

It was ticking along fine & then something changed beyond his control & the business went bust. It is currently going though insolvency. Unfortunately as he PG'd the loans he now owed around £180,000.

We have 2 options IVA or Bankruptcy. He is keen to go bankrupt as it is the cheaper option & I can afford to purchase his share of equity.

My question is: my husband claims he will be treated the same wether he goes bankrupt or goes IVA. Is this true? & what other impacts may it have on us as family if he goes bankrupt?

StepChange_Private_Messages · 25 January 2018 at 2:37PM

Hi there,

Thanks for your post.

Individual Voluntary Arrangements (IVA’s) and Bankruptcy are both forms of insolvency which involve full or partial debt write off. As a result they do have a similar impact on things like credit files and the ability to take out further credit. Bankruptcy however does carry more restrictions, for example your husband wouldn't be able to be a director of a limited company whilst an undischarged bankrupt.

You husband is right in that Bankruptcy tends to be the quickest and cheapest option for dealing with debts but I would strongly suggest he seeks professional advice before proceeding with either route.

As your husband has owned a business and that business is still going through insolvency I would recommend he contacts an organisation called Business Debtline. Like StepChange they are a charity that offer free and impartial debt advice but they specialise in helping people who are self-employed or directors of limited companies. They can offer advice for both business and personal debts and you can find their contact details here.

In terms of the effects Bankruptcy can have on your husband you and your family there is a very useful fact sheet on the Business Debtline website which explains all about how Bankruptcy works. You can find this here.

I hope this helps and all the best.

Kirsty

davidsonsl wrote: »

Hi all

My husband has owed a business for 6 years, just under 2 years ago there was a change that affected the business & he took out loans to keep it going.

It was ticking along fine & then something changed beyond his control & the business went bust. It is currently going though insolvency. Unfortunately as he PG'd the loans he now owed around £180,000.

We have 2 options IVA or Bankruptcy. He is keen to go bankrupt as it is the cheaper option & I can afford to purchase his share of equity.

My question is: my husband claims he will be treated the same wether he goes bankrupt or goes IVA. Is this true? & what other impacts may it have on us as family if he goes bankrupt?

HarmonyDragon · 26 January 2018 at 9:15PM

Hi

I'm a volunteer with a small charity and have been asked to become a signatory on the bank account. I have a very poor credit rating, with several credit card debts and I have recently had a default posted.I am in the process of making arrangements to clear these debts.

Will this be a barrier to becoming a signatory? Is it likely that the bank would run a credit check and disclose this to the trustees or other signatories?

menageamoi · 27 January 2018 at 2:08PM

Hi - When I was in a similar position I decided not to as they do run a credit check on all signatories and it would have been embarassing for me and the other trustees. Of course I've had to stand down as a trustee now I'm bankrupt anyway....

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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