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DH's bankruptcy - please help!

(8 Posts)
heroinahalfshell Mon 15-Aug-11 20:09:03

This might be a bit complicated so please bear with me...

DH has to go bankrupt. His debts are over £1m. I won't go into the hows and whys but needless to say bankrutcy is his only option.

I earn quite a good salary £40k gross roughly. We have a 9m old son.

How will my income be taken into account for a repayment order? Am I going to be made to pay for more than half now even though this is nothing to do with me? (And I in fact knew NOTHING about a lot of the debts..... for another thread maybe...!!!)

Also - some of the debts might have been fraudulantly obtained (again, I knew nothing about this...). I understand this can lead to a restriction order. Can somebody tell me about them and how they work?????

He had been earning quite good money but as a company director which he now obviousl can't be. Basically his income has now dropped to a big fat £0. We've decided he will be primary full time child carer and I will go back to work full time (only P/T at the mo). Will this mean he wont have a repayment order? But let's say he gets an evening job and earns a little bit of money - will they just take this because I earn a lot??

God I have no idea how this works!! I've read so much online but learnt nothing! Please help!! sad sad

CogitoErgoSometimes Mon 15-Aug-11 20:15:54

If any of the debts were 'fraudulently obtained' there may be a police investigaion and therefore you'd both be well advised to seek proper legal advice.

heroinahalfshell Mon 15-Aug-11 20:19:38

Don't worry about that bit - that IS already being dealt with and bubbling along concurrently.

I just need someone who has gone bankrupt to tell me how they calculate the repayment order bit. And also anyone who has had a restriction order.

Lilyloo Mon 15-Aug-11 20:23:52

Have you looked at money saving expert site the forum section has loads of advice or you can ask your own questions.
Sorry things sound so tough sad

CogitoErgoSometimes Mon 15-Aug-11 21:11:09

Have you consulted CAB or one of the other free debt advice services? They're very good at giving specific information based on your circumstances.

claricestar Mon 15-Aug-11 21:19:19

Hi. They will work out what his share of the bills etc should be then if there is anything else left (over £100 per month or so) then they will take a proportion of that. They won't take your wages but they will use them when calculating the household income/his share of the bills etc. It's been 4 years since I went bankrupt so I can't remember the exact terminolgy etc but I do recommend visiting the bankruptcy board at money saving expert.com.

afishcalledmummy Wed 17-Aug-11 14:38:30

Hi heroinahalfshell - please try not to worry too much about what is going on, bankruptcy is supposed to be a way of reducing money worries and stress, although I know it doesn't feel like it at the time. I haven't been bankrupt or had a restrictions order made against me, but I spent a decade working in insolvency (before retiring and doing something more cheerful) and specialised in personal matters, so have some knowledge....

In response to your specific queries:

Your income will be taken into account as household income for the purposes of working out what your DH can afford (if he can afford anything) to pay as an income payments agreement. The standard way for this to be worked out is to look at how much you earn in relation to DH and apportion the household bills accordingly. For example, if you earn 1/2 what your DH does, they will assume that you are responsible for 1/3 of the household expenditure (as you bring in 1/3 of the household income) and the other 2/3 will be apportioned to your DH, thus working out if he has any surplus income from which to make a contribution. A contribution of 1/2 - 3/4 of his surplus will be requested.

Bankruptcy Restrictions Orders (or Undertakings) are applied for when the Insolvency Service consider that the bankrupt has been reckless, culpable or dishonest and his actions have brought about the insolvency. They extend the restrictions in bankruptcy (amount you can get in credit, trading restrictions, positions of office) for a period between 2 and 15 years depending on the severity of the transgression. If the Insolvency Service apply for one your DH has the opportunity to accept it, and will get a reduced period, or go to court and present his side of things. The application will have to be made before the discharge from bankruptcy, one year after the date he was made bankrupt. They are quite uncommon, and may not be applied for even with fraudulent activity as it has to be material to the bankruptcy.

Your DH is automatically disqualified from being a director following the bankruptcy order, but he can apply to the county court to be a director of a specific company if he wants to keep working. If it is granted by the court there may be some restrictions, but they are normally amenable to allowing specific directorships.

If he earns nothing, there will be no Income Payments Agreement sought from him - his money is for making payments to the bankruptcy, not yours. If he goes out and gets a part time role then he needs to declare the income to the Insolvency Service and they will work out whether he can afford a contribution once reasonable household expenses have been taken into account.

If you want me to be a bit more specific feel free to PM me and we can discuss things more privately.

heroinahalfshell Wed 17-Aug-11 19:20:08

Thank you SO much afishcalledmummy that is so helpful! I may very well pm you if that is ok smile Thanks!

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