Bankruptcy questions

[Maisiesaves]

Hello fellow Mumsnetters!

Right. After a year on a DMP with Step Change Debt Charity, and a worsening financial situation, I have now been advised to declare bankruptcy. EEK.

I have already started the process. I have contacted some charitable trusts to see if they can help with the costs of bankruptcy fees. Step Change are supporting me. However, I am still a little bit confused about a few things:

1. One of my creditors is HSBC. I had an overdraft and a personal loan with them. They were part of my DMP. My accounts were closed and the repayment goes to their repayment services. I have a joint account with my husband with HSBC. Is the best course of action to move the joint account to a different bank, or to just take my name off it? Will that keep it safe during my bankruptcy, as all the DDs come out of that account, and all monies (apart from husband's wages and CA) go into that account?

2. Do I open a basic bank account before or after declaring bankruptcy? Do I ask the bank if I can still have a basic bank account with them if I go bankrupt? Is it the bank accounts with my name on that will be frozen and possibly closed?

3. Do I include tax credit and housing benefit overpayments in my bankruptcy if I am planning on appealing the decisions? Either they'll be overturned, and I'll no longer owe - would I then take them off the bankruptcy - or I keep them off the bankruptcy and risk them not being overturned and having to pay them back?

Any help or advice would be greatly appreciated!!

Hi,

Sorry to hear you are going through this, once the initial stress is over then it does make you feel 100x lighter though, no more letters or phone calls, and any threatening letters you just forward straight to your official receiver to deal with! I went through this at the end of May.

Regarding your questions, your accounts will be frozen but I m not sure if this applies to a joint account, I would probably take your name off just in case, the main issue I had was accessing money when my account was closed. I would set up a new account afterwards as any accounts will be frozen, so if you have a new one before the bankruptcy it will initially be frozen. Just make sure you have some money to get by in between your accounts being frozen and setting up the new one. I have a Halifax basic account. I have heard of some banks letting you keep your account but downgrading to a basic but it depends on the bank, I was with NatWest and they are not BR friendly.

With the overpayments, we had a tax credit overpayment but I was told I could not include this as it was a joint name overpayment being repaid as me and my husband are both on the tax credits claim, so if it is just your overpayment in your name it will go into the bankruptcy, if it is joint it will not, it will fall to your husband.

This is just based on my experiences, if I m wrong hopefully someone will out me right! Good luck and enjoy being debt free!

Hi OP, are you taking advice from step change with your bankruptcy?

I can only speak from our experience but I would recommend you and your DH open a new account either separately or joint. Any joint debts will be passed to the other person so your DH needs to be aware of this.

In regards to the benefits/tax credits overpayment I would include everything in your bankruptcy. I'm not even sure there is an option to omit a debt. The only snag may be if the DWP consider the overpayment as fraud. This cannot go through a bankruptcy. You will need to check this.

DH went through bankruptcy after having a mental breakdown last year and losing his job. I used CAP (Christians Against Poverty). They were very helpful basically doing everything for us in regards to filling out the forms and telling us about the process and what to expect.

I am happy to answer questions by pm if you wish.

Hey,

Sorry to hear your going through such a rubbish time. You will feel so much better when it’s all gone through and your not being hassled anymore.

I went through a similar thing to yourself, I was with Stepchange (they were brilliant!)doing a dmp and repaying back what I could afford to my creditors per month then when I couldn’t manage any longer I ended up phoning CAB and they advised me to go bankrupt and put an application forward to British Gas who paid the fees for me to go bankrupt. The CAB helped me with the forms and were so supportive. I was so grateful for all they did.

I opened a basic account with Co-op as I had to close my account with Barclays because I had a large personal loan out with them.

My best advice would be to be completely honest on the application form and when they call you from the office for the follow up, make sure you write it all down what you have put and then you have it infront of you. They ask you how the debt was acquired and what you spent the money on etc.

If you would like any information on the forms or anything like that or just want to talk (because I know it’s stressful!) feel free to message me and I will try and help 🙂

I’m sorry you are going through this.

I can add anything other than to say that my DSis really felt a weight had been lifted after her bankruptcy.

You’ve been good advice here. I hope things improve for you very soon.