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  • FIRST POST
    • FutureFreedom1
    • By FutureFreedom1 3rd Aug 19, 9:23 PM
    • 20Posts
    • 4Thanks
    FutureFreedom1
    Bankruptcy for Mum and SOA Help Please
    • #1
    • 3rd Aug 19, 9:23 PM
    Bankruptcy for Mum and SOA Help Please 3rd Aug 19 at 9:23 PM
    Hi Guys,

    Your help would be much appreciated please. I called the national debt line regarding my mum's debts and the person I spoke to advised bankruptcy as she has no assets, rents and is not planning to buy a house, her debts are high and her income is low. I have completed a SOA below, but I am not sure if this is done correctly. This is a very worrying situation

    My mum's income is low, as she has to be home for when my brother returns home from school, as he is suffering from trauma based mental health issues.

    The electricity is dual fuel, I have told my mum this is high, but I think she is repaying some she owes, as this is her direct debit amount.

    The medical is £12 towards optician and dentist, and £30 towards my bother's acne treatment.

    The "other child related expenses" are my brother's hobbies etc, this does seem high, but with his mental health at the moment, I wonder if that is justified to keep those?

    The "holiday" is to visit her elderly parents abroad once per year.

    The school uniform is high, but that is what she pays compulsory and has receipts etc.

    The school dinners are compulsory and that is the set price.

    My mum also smokes, but I have not put this on here, as I read that it is not allowed, or has to be justified, I am not sure how that would be justified though? I read that you are allowed £30 for dry cleaning and £20 for newspapers/magazines, but I didn't see anyone else using this, so wasn't sure if it normally get approved?

    I read in another thread that another mother and 1 child had £460 accepted for groceries, so I am not sure if I am estimating low?

    Should I be increasing or decreasing anything on my list please and do you think that bankruptcy will be best?

    Many thanks.

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household......... 1
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 940
    Partners monthly income after tax....... 0
    Benefits................................ 415
    Other income............................ 360
    Total monthly income.................... 1715


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 300
    Management charge (leasehold property).. 0
    Council tax............................. 85
    Electricity and Gas............................. 133
    Water rates............................. 25
    Telephone (land line)................... 20
    Mobile phone............................ 60 (Mum and Brother)
    TV Licence.............................. 12.83
    Satellite/Cable TV...................... 8
    Internet Services....................... 20
    Groceries etc. ......................... 350
    Clothing................................ 50
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 80
    Childcare/nursery....................... 0
    Other child related expenses............ 60
    Medical (prescriptions, dentist etc).... 42
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 26
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 30
    Entertainment........................... 30
    Holiday................................. 43.33
    Emergency fund.......................... 30
    School Trips............................ 5
    Child's Pocket Money.................... 22
    School Uniform.......................... 21.67
    School Dinners.......................... 59.25
    Meals at Work........................... 33
    Total monthly expenses.................. 1566.08



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit Card 1..................13376.....310.......0
    Credit Card 2..................6664......190.......0
    Store Card.....................650.......40........0
    Overdraft......................1800......78....... .0
    Total unsecured debts..........22490.....618.......-



    Monthly Budget Summary

    Total monthly income.................... 1,715
    Expenses (including HP & secured debts). 1,566.08
    Available for debt repayments........... 148.92
    Monthly UNsecured debt repayments....... 618
    Amount short for making debt repayments. -469.08


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -22,490
    Net Assets.............................. -22,490


    Created using the SOA calculator at stoozing
    Reproduced on Moneysavingexpert with permission, using other browser.
    Last edited by FutureFreedom1; 03-08-2019 at 9:27 PM.
Page 2
    • FutureFreedom1
    • By FutureFreedom1 1st Oct 19, 3:21 AM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    I managed to upload the images, as I have made 10 posts so I’m allowed images above of expenses soa submitted. Thanks
    • debt doctor
    • By debt doctor 2nd Oct 19, 7:29 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    Hi,

    I have managed to open your 'links'.
    I will check them against the latest SFS allowances at work tomorrow. Will post tomorrow night.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • debt doctor
    • By debt doctor 2nd Oct 19, 8:03 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    How did the income go from £1715 to £2139.50?

    Also, Council Tax reduction benefit would not be available on an income of £1750. How did they explain this?

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • FutureFreedom1
    • By FutureFreedom1 3rd Oct 19, 6:58 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Hi DD,

    Thanks for taking the time to reply and being able to open my attachments

    The income went up, as the real online SOA for the Bankruptcy actually included council tax reduction/benefit within ďincomeĒ. Whereas, when we completed the SOA on here, we didnít put that as an income, we just put the reduced council tax rate directly in the expenses. However, that money isnít an income for my mum, it just goes straight to the council to reduce the council tax. Thatís the single person discount, plus benefit, and thus, my mumís income isnít actually £2139.50 itís the original lower amount.

    It turns out that we probably werenít supposed to put the council tax reduction within the ďincomeĒ, even though that was the title (it actually asked for this), as the OR had forgotten to remove that when calculating repayments, as the council tax has to be paid directly to the OR, and thus, my mum wonít be receiving that reduction as an actual income. So the OR has now removed that from the income section.

    They have also allowed the holiday fund, but have kept the reductions as I stated before.

    So now they have asked my mum to make repayments of £38 per month. Mum hasnít included anything for her own hobbies, just 1 coffee/yoga per month at £10, the rest was for an activity each week with my brother, thus they said that she could have the holiday fund, as it didnít need to come out of the hobbies fund, as that was activities with my brother for his mental health.
    • debt doctor
    • By debt doctor 4th Oct 19, 6:54 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    Hi,

    Sorry for my delay, as per my PM to you, I shall post on here by the end of the weekend.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • debt doctor
    • By debt doctor 6th Oct 19, 4:50 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    How old is your brother who lives in the property?
    Please confirm that the only adult in the property is your mum, you don't live there?

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • debt doctor
    • By debt doctor 7th Oct 19, 6:23 PM
    • 4,541 Posts
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    debt doctor
    I think the Insolvency Service may have made an error regarding allowances, but need you to confirm the answers to my questions above to be sure.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • FutureFreedom1
    • By FutureFreedom1 8th Oct 19, 2:30 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    So sorry DD I have only just seen your reply.

    Yes my mum is the only adult at the property, I donít live there. My brother is 13, thanks
    • vixg66
    • By vixg66 8th Oct 19, 4:42 PM
    • 33 Posts
    • 15 Thanks
    vixg66
    Hi FF, as someone has mentioned up-thread, does your mum have a pension? if not she could start paying into one which would probably leave her with £0 to pay to OR, plus it would benefit her in the future and her employer will also contribute.
    • FutureFreedom1
    • By FutureFreedom1 8th Oct 19, 9:00 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Hi Vix,

    Thank you for your reply. Yes she has a pension, it comes directly out of her wages before she gets paid.
    • debt doctor
    • By debt doctor 9th Oct 19, 8:00 AM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    So sorry DD I have only just seen your reply.

    Yes my mum is the only adult at the property, I donít live there. My brother is 13, thanks
    Originally posted by FutureFreedom1
    Hi, thanks for the info, I'll Pm you later today / tonight.
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • FutureFreedom1
    • By FutureFreedom1 8th Nov 19, 1:48 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Hi everyone,

    So the OR decided there wasn’t enough money left, so they have said there will not be an IPA. However, my mum just received one through the post asking her to sign the IPA for 3 years for a sum of £0.00 per month. Is the usual please?

    Thanks
    • debt doctor
    • By debt doctor 8th Nov 19, 8:27 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    Hi,

    I have not seen such a request before, and I suggest that you don't sign it. You do not need to confirm that there is no surplus for an IPA, and the 3 year bit concerns me.

    I'd like to see the letter if you could post it (after removing all personal information).

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • Lacemaker
    • By Lacemaker 9th Nov 19, 7:53 AM
    • 45 Posts
    • 146 Thanks
    Lacemaker
    Hi,

    I hope that things are getting more settled for you all.

    As DD says, a nil amount IPA is unusual.

    However, I think there is a function to it.

    As you know an IPA may only be presented during the period of Bankruptcy, so it gives the OR, or supervisor, a relatively short time frame in which to act .

    Whilst they accept now that there is no justification for payment, they may believe that your DM's income or outgoings may be subject to change which could give rise to surplus in the future.

    A signed nil amount IPA now means that the onus would be upon your DM to advise them of any such change for its duration.

    L
    • FutureFreedom1
    • By FutureFreedom1 12th Nov 19, 9:59 AM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Thanks DD and Lacemaker,

    I have attached the letter and IPA here.

    In case itís relevant, my mum thinks the Local Authority havenít granted a council tax holiday, as she is still paying CT to them, and so not to the OR.

    If we donít need to sign to confirm no surplus for IPA, what do we do with the IPA thatís been sent to my mum, what should we say to the OR please?

    Yes, I was thinking maybe they are doing this, with the foresight to collect an IPA in the future if my Mumís circumstances change. Makes it more stressful as it feels the BR is lasting 3 years rather than 1.

    Thanks for your advice.







    • debt doctor
    • By debt doctor 13th Nov 19, 10:08 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    Hi,

    Attached??

    In my view you should simply keep the IPA proposal until they contact you further, at which point you say " I don't need to confirm that I owe you nothing towards an IPA"

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • FutureFreedom1
    • By FutureFreedom1 14th Nov 19, 6:12 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Sorry let me try again







    • Minkym00
    • By Minkym00 14th Nov 19, 7:31 PM
    • 241 Posts
    • 99 Thanks
    Minkym00
    This makes more sense. This IPA is for claiming council tax only. You mention above that your mum has still been paying her CT. Why? The OR should have included your Mum’s remaining CT liability in her debts so the balance should have been written off and she need not have made any further payments. You need to check they have done this.

    My advice would be to go back the OR and say that, as they are only claiming CT on this IPA, they should reduce the term in the IPA to 4 months (December to March) and not 36. Otherwise with a nil value surplus IPA they are leaving her open to a potential surplus IPA in the future. This is NOT normal practise.
    • FutureFreedom1
    • By FutureFreedom1 14th Nov 19, 11:30 PM
    • 20 Posts
    • 4 Thanks
    FutureFreedom1
    Hi Minky,

    Thank you. Well, the OR said that she may be offered a tax holiday by the local authority and, if so, she has to pay it to the OR. They said to continue paying tax to the local authority until the local authority tells her not to. So thatís why sheís still paying council tax.

    I didnít think it seemed usually from what Iíve read on here.

    Thanks
    • debt doctor
    • By debt doctor 27th Nov 19, 7:53 PM
    • 4,541 Posts
    • 6,232 Thanks
    debt doctor
    Hi,

    I have never seen the Insolvency Service do this before - and I most certainly do not like it.

    They suggest that 'if' the council allow a payment holiday then the money should be paid to the OR instead. I think your mum might actually be better off paying the council.

    It's very odd and Minky is quite right, this is a bankruptcy debt and the balance has been written off for the year.

    The Insolvency Service have always had a 'hands off' approach as to whether BRs continue to pay their ongoing c/tax and rates based water - Whats next - A rates based water IPA?

    My view remains not to sign the IPA. Minkys view on signing a new 4 month IPA is interesting and certainly far more protective.

    Suggest to the OR that they can claim the monies back from the council if they feel able - doubt they will. There is no way in my view that the OR would push for an IPO via the court for this money.

    It needs to be stated that the IPA is not agreed and so won't be signed so to avoid 'ignoring the OR' and potential suspension of discharge.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
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