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  • FIRST POST
    • thevdm
    • By thevdm 13th Oct 18, 6:52 PM
    • 13Posts
    • 0Thanks
    thevdm
    Bankruptcy - Only income benefits - Partner works
    • #1
    • 13th Oct 18, 6:52 PM
    Bankruptcy - Only income benefits - Partner works 13th Oct 18 at 6:52 PM
    Hi all,
    I am considering bankruptcy as a serious option as an IVA doesn't appear to be working.
    My income comprises solely of benefits (PIP, Housing Benefit/Council Tax Credit and Working Tax Credit), the WTC is still in my name from a few years back when I was working, I was in receipt of ESA which is no longer paid as my partner works over 24 hours per week. My situation is highly unlikely to change any time soon.

    As my entire income is based on benefits would this mean that an IPA/IPO wouldn't be sought or do I become exempt from this as my partner works? Is the exemption of an IPA/IPO for benefits based on the income of the person going bankrupt or the household including partner?

    Also, if a person who's only income is from benefits is exempt from an IPA/IPO does this mean that a SOA or budget is not required.

    My debts are over £20,000 so unfortunately I would't be eligible to apply for a DRO.

    The information I have used here is from insolvencydirect on bis.gov.uk (as a new user I am not allowed to provide a link)

    Section (b) State benefits


    31.7.40 IPA or IPO should not be sought where bankruptís sole income comprises state benefits

    (Amended March 2014)

    An IPA or IPO should not be sought where the bankrupt's only source of income is state benefits. In the context of this chapter "state benefitsĒ refers to all forms of income supplement and support provided by central or local government including, but not limited to: income support, job seekers allowance, disability living allowances, incapacity benefit, industrial injuries disablement, council tax benefit, housing benefit, state retirement benefit (state pension), child benefit and all forms of tax credit (child, working and pension). Payments of a War Disability Pension (Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 2006), the bankrupt having been injured on active service, should be regarded as a state benefit. There is no requirement to undertake an assessment of real disposable income where the only source of the bankrupt's income is state benefits. In all other cases an assessment should be made even if part of the household income is derived from state benefits.
    Last edited by thevdm; 13-10-2018 at 7:28 PM.
Page 1
    • maxmycardagain
    • By maxmycardagain 13th Oct 18, 9:25 PM
    • 4,677 Posts
    • 3,740 Thanks
    maxmycardagain
    • #2
    • 13th Oct 18, 9:25 PM
    • #2
    • 13th Oct 18, 9:25 PM
    I thought WFTC was always in the wifes name?
    Dont worry, be happy
    • thevdm
    • By thevdm 13th Oct 18, 9:59 PM
    • 13 Posts
    • 0 Thanks
    thevdm
    • #3
    • 13th Oct 18, 9:59 PM
    • #3
    • 13th Oct 18, 9:59 PM
    I thought WFTC was always in the wifes name?
    Originally posted by maxmycardagain
    I thought WTC went to the main worker and CTC to second worker or stay at home parent (not that it's that way round these days with me being the stay at home dad)
    Better go find a some size 14 heels and a dress that'll fit someone who's 6'3"
    • debt doctor
    • By debt doctor 14th Oct 18, 9:08 AM
    • 4,344 Posts
    • 6,011 Thanks
    debt doctor
    • #4
    • 14th Oct 18, 9:08 AM
    • #4
    • 14th Oct 18, 9:08 AM
    Hi,

    You are correct, an IPA can only be sought from a BANKRUPTS earned or pension income. You will still have to fill out the SOA, but it has no practical effect.

    As for Working Tax Credit (WTC), if you are a couple, it must be a joint claim.

    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 ***
    • thevdm
    • By thevdm 14th Oct 18, 10:27 AM
    • 13 Posts
    • 0 Thanks
    thevdm
    • #5
    • 14th Oct 18, 10:27 AM
    • #5
    • 14th Oct 18, 10:27 AM
    Thank you for clarifying that debt doctor, that takes some of the worry out of the process.

    You are correct, the tax credits are a joint claim, on the same letter it states the working tax credit is paid to myself and the child tax credit to my partner.
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