This page looks at how you go bankrupt: what you have to do beforehand, things to make decisions about, how to complete the online bankruptcy application and how your application will be considered by the Adjudicator. The old process of filling out forms in triplicate and taking them to court ended on 5 April 2016.
This is the second of three pages on bankruptcy: the previous page looked at the major worries you may have about bankruptcy and the next page will cover what happens after you go bankrupt.
This page is written as if you have already taken the decision to go bankrupt and need to know what to do – but one of its main aims is to let you see what will happen if you decide to go bankrupt, so it matters even if you are still thinking through your options. There is a Checklist of things to do when going bankrupt which summarises the points here.
Getting more advice about bankruptcy
Two groups of people should get professional advice on the implications of going bankrupt:
- People with unusual assets, including shares in unlisted companies, rights to a share of a trust fund, unvested stock options, being a member of a partnership.
- People whose assets or debts are in dispute, for example, because of divorce. You need to discuss the possibility of bankruptcy with your solicitor. Don’t just assume your ex can have the house and car because you will be going bankrupt.
For everyone else, you still need to look for more information and advice as this is such a huge decision. Debt Camel suggests that you do as much research on the internet as possible and then get face-to-face advice at a Citizens Advice Bureau or talk to National Debtline on the phone about what is most suitable for you. If you are self-employed or have a limited company, talk to Business Debtline.
Decide what bank account to use afterwards
Most banks will close your current account when you go bankrupt. Opening a new one after bankruptcy used to be a major headache for many people, but from the start of 2016 life has got much easier. Many major banks have introduced improved basic bank accounts, with no fees and proper online access, and made them available to someone who has gone bankrupt. See Bankruptcy – Your Bank Account Options for a complete list.
High bankruptcy fees
It may seem odd that when you have no money to pay your debtors, you have to pay hundreds of pounds to go bankrupt, but that’s the way it is. In England and Wales the bankruptcy fee is £680. When you have decided to go bankrupt, getting these fees should be your top priority:
- You can pay the bankruptcy fees in instalments and use a credit or debit card if yours aren’t maxed out, see How to pay your bankruptcy fees for details
- If you are currently making any payments to unsecured creditors, you should stop making these and put that money towards your bankruptcy fees.
- For more suggestions see getting help with the high bankruptcy fees.
When should I go bankrupt?
The simple answer is that you should go bankrupt as soon as possible after you have decided that it is the best solution for you. Not only is it best to get it over with, so that you can have a fresh start, but once you have realised that you are going to have to go bankrupt you should not borrow any more money because you know you won’t be able to repay it.
Don’t rush into bankruptcy. If everything might look different in a couple of years, for example when your children are at school and you can get a job, then you need a temporary solution to your debts such as a DMP. You can’t change your mind about bankruptcy. (Well technically you can – it can be annulled – but the costs of doing this are huge.) But don’t hang on for years hoping that things will get better if there is little chance of this happening.
Some things may delay your going bankrupt. You may need to save up the fees, see above. If both you and your partner intend to go bankrupt, it might make sense for the person with the largest debts or the most annoying creditors to go bankrupt first.
If you are paid monthly, you may prefer to time your bankruptcy so that it happens a few days after you get paid: this will let you withdraw cash for living expenses and also give time for your work to switch your next pay cheque into your new bank account.
Another good reason to delay is if you are just about to move into a rented property. Although going bankrupt will not prevent you from renting, if your move is imminent you may prefer to do it first rather than possibly complicate it.
You may not lose your house when you go bankrupt but sometimes you don’t want to keep it – perhaps there is a lot of negative equity or the house is wrong for your family. In this case, you want to hand back the keys to the mortgage lender, get the mortgage and any secured loans included in your bankruptcy, and rent somewhere. Because renting privately can be more difficult after you have gone bankrupt, a suggested order of events is:
- save up a deposit and first month’s rent. Do this by stopping all payments to unsecured debts (including your IVA or DMP). You could consider stopping payments to your mortgage and secured loans. This is scary, but it will take months before a lender can get a repossession order;
- rent somewhere, move and hand back the keys;
- save up the money for bankruptcy fees;
- go bankrupt.
Completing the online application
The Insolvency Service summarises the application post like this:
The online application is a lot more user-friendly than the old forms, but it is very long. There are 8 sections and they have to be completed in order, so it’s not easy to see what the whole application looks like or what information you will need. How to complete the online bankruptcy application looks at the process in detail, including where to get some of the information and what to do if you don’t have some details.
Get your paperwork in a bit of order
Whilst you are filling out the bankruptcy application, you may have to dig up a lot of information. It would be a good idea to get this neatly sorted because you will need it to hand for your interview with the OR. Ideally you will have just about everything relating to your finances: bank statements, pay slips, insurance policies, credit card statements, loan papers, hire purchase agreements, receipts for any major purchases, and, if you are self-employed, the last set of your accounts. Don’t worry if you haven’t got all of these, the OR will be used to it. But the better organised you are, the easier the whole process is on your nerves.
What happens next?
Once you have paid your fees and submitted the bankruptcy application, you have to wait for the Adjudicator to determine if your application will be approved or rejected. You may be contacted by the Adjudicator’s office asking something, so do check the email account you put on the application.
The Adjudicator aims to approve 95% of applications within two working days. You will receive an email informing you when a decision has been made and you can then see it by logging into the bankruptcy application. If your application has been approved you will see a copy of your Bankruptcy Order and you are now bankrupt. Time to go and open that new basic bank account!
The Adjudicator will assign your case to one of the Official Receivers around the country within 24 hours. This is no longer always your nearest OR office, it could be anywhere unless it is likely that you will require a face-to-face interview – these are rare for domestic bankruptcies, usually only being needed for people with an actively trading business.
You will be contacted by the Official Receiver in the next few days for an interview, see What happens after you go bankrupt.
The big questions people have about bankruptcy
After you go bankrupt: IPAs, discharge etc
A straightforward, no jargon, Guide
James says
i am planning to go bankrupt as a sole trader in england, 1st question
is that my parents gave me some money to help me out within the last
month but are not worried about having money back for a good few years
,can i exclude them from listing them as creditor and also if i owe a
builders merchants that i have credit with only a small amount can i
leave them off bankruptcy , i would tell them i was going bankrupt in
the hope i could still get materials from them during bankruptcy.
many Thanks
Sara (Debt Camel) says
If your parents are happy to view this money as gift, you can leave it off.
re the credit needed for your business, I suggest you call Business Debtline https://www.businessdebtline.org/ – they are very good at talking to self-employed and small limited companies about debts and bankruptcy, you need to know any other implications bankruptcy could have for your business. NB I am not saying you need to avoid bankruptcy, just you need to be aware of all the implications.
james says
Thankyou, do you know when filling in bankruptcy forms as a sole trader do i guess the last years tax owed to hmrc up to the date of bankruptcy and then adjust when my accountant has finished filing returns?
Sara (Debt Camel) says
do you mean the current tax year?
James says
Well my tax year finished in march and will probably go bankrupt end of this month so my books are in now up to mar 18 and will need to be done up to point of bankruptcy but until they are done they won’t be 100%accurate figures
Natalie Carson says
Hi Sara
My husband and I are considering bankruptcy as our debts have spiralled, however we’ve had things on credit from our parents, washing machine etc, they got a car on finance for us and a loan a few years back to clear our cards etc. What would happen with the money we pay to them for these items each month, would we have to stop? Thanks
Sara (Debt Camel) says
Legally the money you owe your parents is a debt which will be wiped out in bankruptcy so you should not carry on making these payments after you go bankrupt.
The Official Receiver after bankruptcy does not monitor what you do with your money, so you could still give some money to your parents. BUT these payments won’t be seen as legitimate expenses by the OR so it is possible that you may have to make monthly payments to the OR for three years at a level which would mean you couldn’t afford to be paying your parents much if anything.
One option would be for you to go bankrupt and then pay your parents back in a few years time, if they are well off enough to manage the debt repayments themselves until that time.
Another would be to postpone bankruptcy until these other debts have been repaid. Obviously the first thing is not to ask them to take out any more credit in your name! If you are repaying your parents and not your other creditors, when you do go bankrupt the OR may decide that you have been giving your parents “preference” so this could lead to a Bankruptcy Restriction Order, but you may not care about that in practice.
But I think you both need to take good debt advice at the moment. You are assuming you both need to go bankrupt, perhaps, but there may be other options. A couple don’t always have to have the same debt solution. And one of you may be able to go bankrupt sooner than the other, it doesn’t have to be at the same time.
I suggest you talk to National Debtline about the options for each of you. See https://www.nationaldebtline.org/ and phone 0808 808 4000.
Sarah says
Hi Sara, I have a few questions,
Most of the debt is in my name, even though some of the things paid for were solely for my husband. Do I have to include them?
Is it ok for me to go bankrupt & hubby to get a dro at the same time?
Some of my debt is still in my previous surname, will I have to change it before I can add it in?
My niece lent me the money to pay for the bankruptcy fee, will I be allowed to pay her back?
Thank you for any help you may offer
Sara (Debt Camel) says
1) yes you should include all debt you took out, including listing any joint debts such as council tax arrears and overdrafts on a joint account.
2) it’s fine for your husband to get a DRO. This is a common combination for a couple, see https://debtcamel.co.uk/couple-different-debt-solutions/. Re joint debts it is ESSENTIAL that your husband includes them all on his DRO application otherwise he will still be liable for them.
3) no you don’t need to change the name on your debts before going bankrupt.
4) technically this debt to your niece is wiped out by the bankruptcy so she couldn’t sue you for it but there is nothing to stop you giving your niece some money when you want to… you can’t list repayments to this “debt” on your income and expenditure statement though.
Luke says
Hi. I am being forced into bankruptcy by HMRC. I am a director of a company. Should I resign ad a director immediately before completing the bankruptcy?
Sara (Debt Camel) says
Do you have assets – house with equity, shares in company?
Luke says
No house. In rented. No car on finance. Shareholder in 2 companies. 1 with my fiance and 1 with my parents. Both unimpacted by this situation. Just trying to work out if I should step down before pulling the trigger on the bankruptcy
Sara (Debt Camel) says
I suggest you talk to Business Debtline about this.
Lyndsey says
Hi Sara
I messaged a few days ago on another post. My husband and I are on the verge of having to declare ourselves bankrupt.
We are so nervous about the whole process. Does the OR take control of our bank account-monitoring what comes in and goes out-what if we spend something they don’t like the look of?
How does the application process work, do we have to provide months and months worth of bank statements and wage slips (some of these might be hard to obtain)?
I can’t seem to find definitive answers anywhere.
If we were subject to an income payment arrangement, do they still monitor our bank account etc for the whole 3 years worth of payments or does this stop after 12 months..?
#soconfusedandstressed. :-(
Lyndsey says
Oh and I forgot to ask about student finance (maintenance loan) is this counted towards income in bankruptcy, again I read conflicting information on this.
Many thanks
Lyndsey
Sara (Debt Camel) says
Yes student maintenence loans are counted as income. the tuition fee loans aren’t.
Sara (Debt Camel) says
There is no monitoring of your bank account and what you actually spend your money on while you are undischarged.
After your bankruptcy is approved there is an interview with someone from your OR’s office. This is usually over the phone – only face-to-face if you are self-employed when your affairs tend to be more complicated. You may be asked to produce some bank statements or other paperwork, the OR will be used to people who don’t have it all organised. It’s usually pretty easy to get hold of all bank statements. See https://debtcamel.co.uk/debt-options/bankruptcy3/
Most people find the process a lot less intrusive that they expected.
Lyndsey says
Thanks for your replies, so what does it mean when it says that they ‘freeze’ your bank account and get control of your money and assets? I thought this meant they would only release money for bills etc? Why would I need a new account?
As for the maintenance loan, so even though it is a loan that has to be paid back it is still counted (these are the conflicting things I have read)? That’s quite significant really as it is about £9k/year, could make a huge difference to our financial picture overall.?
Thanks
Sara (Debt Camel) says
Where have you seen this written? “when it says that they ‘freeze’ your bank account and get control of your money and assets? ”
Before 2016 it used to be very hard to get a bank account when you were bankrupt – now it’s easy to get a basic bank account and these new accounts are very good – everything you would expect from a bank account except an overdraft and a cheque book. And they have no fees ever. See https://debtcamel.co.uk/bank-accounts-after-bankruptcy/.
If you currently have a “normal” bank account you will probably have to get a new basic bank account as your bank will close the old one. The “freeze” is usually only for 1 or 2 days unless there is a lot of money in your account! Everyone worries about this but it is very rarely a problem in practice.
“take control of your assets” – you should expect to lose money in savings accounts, premium bonds and investments. Most people going bankrupt don’t have any… Are you renting or buying? Do you own a car, if yes, how much is it worth? Apart from houses and cars very few people lose other “assets” – the Official Receiver is interested if you have a Picasso or expensive antique furniture, not a normal sofa.
Sara (Debt Camel) says
The maintenence loan – it is a substitute for income while you are a student. Most people need it to pay their essential bills, in which case although it counts as income, you will be able to keep it. Very few students are well off.
If you are well enough off not to need this loan to live on, then you don’t have to take the loan.
I think you and your partner should talk to National Debtline on 0808 808 4000 about whether bankruptcy is right for one or both of you. If they say it is, you can feel confident in going forward. You may also want to post on this forum: https://forums.moneysavingexpert.com/forumdisplay.php?f=136. There you can put details of your income and expenses and the experts 9which include some very good debt advisers) will be able to say if you are likely to have to make monthly payments to the OR when you are bankrupt. The large majority – 5 out of 6 people – don’t!
tasha says
Hi, i was made bankrupt in 2007 after my ex husband left me in debt. i am unfortunately in debt again due to a change in circumstances with my partner and my health. my health has deteriorated and my partner has had to leave work to care for me and the children and i am on pip. we have been using our income support and pip to pay creditors and its getting out of control. can you go bankrupt a second time? will they ask if i have been before? what does the official receiver ask when they phone? we are in a housing association property. i have anxiety aswell as physical disabilities and very worried over what questions they ask please can you advise on what sort of questions there will be. do you they want to know what we buy? will they want to see my bank accounts? thanks
Sara (Debt Camel) says
Hi Tasha,
Yes, you can go bankrupt for a second time. If it was soon after the first you would get asked a lot more questions, but 12 years later I don’t think you will.
BUT there is a new option now that may work for you. Have you heard of a Debt Relief Order? They only came in in 2009.
DROs are a form of simplified bankruptcy for people who are renting (like you), who are on benefits or who have very little spare income (like you) and who owe less than £20,000. The big plus is that the DRO fee is only £90! If your debts come to less than £20,000, read https://debtcamel.co.uk/debt-options/dro/ and talk to national Debtline on 0808 808 4000 about whether you will qualify.
paul says
Hi Sorry to comment on this thread, i just dont know what to do anymore. I am in a really dire situation, currently i am midway through my second year of an IVA (£30,000) debts. I do not own a home, or car or have any valubles. My Kids live with there mum who i pay etc etc. I have a huge gambling problem and mental health issues. In march i gambled all of my wages for that month and in a panic took out a pay day loan of £1500 which i know is a breach. I have been somehow paying off that loan ( 12months at £250 a month) alongside my bills and IVA (£240 a month) this month it came to a head and i had a mental breakdown and spent all of my money, cannot pay any bills, IVA or the Payday loan and knowing the IVA would find out in the end, i finally just owned up to everything breaking down in the process. They were really nice on the phone but will review this over the coming days and get back to me. I dont know what to do anymore. Would it be best to try and seek bankruptcy. I am getting help for the gambling and i just want to try and be a better person and a better father to my kids and not be so reckless. Any help would be much appreciated. Ive googled everything i could spoke online so far with the CAB but i dont know what will happen. I just want to try and get my life in order, get better, manage addiction and somehow in the future be more financially stable.
Sara (Debt Camel) says
I am sorry to hear the last 6 months have been so bad for you. Gambling is a horrible addiction and it makes it hard to stick to any debt repayment solution such as an IVA. I hope you can get some help to stop.
The payday lender should never have given you the loan. You could make an affordability complaint and get the interest removed from that debt. But that doesn’t sound like it’s going to be enough to get your IVA back on track so probably there isn’t much point in wasting time doing this.
Letting your IVA fail and going bankrupt may well be the best options for you. But why did you chose an IVA at the start rather than bankruptcy? With no assets to protect, bankruptcy would normally have been the better choice… if there was some reason why that wouldn’t work for you then, it could impact what your options are now.
It is likely if you go bankrupt you would get a bankruptcy restriction order because of your gambling. See https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/bankruptcy-restrictions-orders/. You may well decide that although it doesn’t sound good, in practice you don’t much care about the restrictions of having a BRO – you weren’t thinking of becoming an MP, were you!
I think it would help you to talk through bankruptcy with an independent adviser. It’s good your IVA firm was nice on the phone, but I’m not sure they gave you the best advice at the start about an IVA. I suggest you call National Debtline (https://www.nationaldebtline.org/). Ask them how much you would be likely to have to pay a month if you go bankrupt – that is an important figure for you to know.
If you do decide to let your IVA fail, then you need to stop making any payments to it and also stop paying the payday loan and save up the bankruptcy fees. It will only take a few months.
paul martin says
thanks for replying Sara, sorry it has taken so long to type back. I have decided that – following another conversation with my IVA company- I am going to take the plunge and opt for bankruptcy. I don’t think another option is suitable.
I should have chosen this route back in Jan 2018 , i guess at the time i thought an IVA as i was employed in another (better paying) role would allow me to complete it and i was managing my addiction much better then.
I have been going to gamblers anonymous and a close relative is managing my banking so i am putting a number of blocks in the way of temptation.
With regards to the bankruptcy, i feel it is inevitable that i get a restriction order, though i will accept a BRU which hopefully shortens it. Does it mean that i would still likely be discharged after 12 months from bankruptcy though even with a BRU in place?
Sorry for all the questions and my life story. Just in a bit of mess. I get in total £1765 a month after tax of which £360 goes to my children’s mum, £470 is on travel to work each month, i am putting my mobile contract and sky on the bankruptcy as i couldn’t afford those anymore and therefore would have a basic £20 pay and go sim, i pay £650 rent (including all household bills to the place of address) £200 on food each month (approx) and then circa £20 for clothing and £10 medical…which equates to £1755, so would i need to pay into an IPA? thank you again for your time
Sara (Debt Camel) says
You will still be discharged after 12 months if you have a BRU – but the BRU restrictions continue until their end date. See https://debtcamel.co.uk/discharged-from-bankruptcy/ for more about discharge.
I don’t like guessing about IPAs, but one doesn’t look likely on those figures. You would also be allowed a TV license, contents insurance, things like that.
If your IVA firm hasn’t actually recommended bankruptcy, I do suggest you talk to national debtline on the phone.
I hope that in a year you will look back on this as a sad decision but one which was the right one for you – and that you can keep away from gambling.
paul says
Thanks Sara, – My IVA company advised me in my recent calls with them that in my position and situation bankruptcy would be the most logical solution. I hope that if it is to be bankruptcy that i am able to move forward, and do things a day at a time.
Keith says
I have a question about filling in the bankruptcy application. I lost my job, can’t afford my debts, and need to go bankrupt. However, my wife works full time on near miming wage, and my 22 year old son who still lives with us is in receipt of Universal Credit. There is a part of the application that asks about household income… I’ll obviously include my wife’s wage, but do I need to include what my son receives in benefit too? And if I do, should I include how it all gets spent? For example, include the cost of his monthly bus pass etc, which he buys himself? We don’t charge him anything for living with us, and we cover all his meals in our own grocery budget.
Sara (Debt Camel) says
do you have any income at all? from benefits?
Keith says
Sorry, yes, I meant to say I receive fortnightly ESA benefit. I have a medical reason for not working anymore (basically we agreed to go our separate ways as I was taking too much time off sick with a muscle problem). So I get that benefit, my wife gets her minimum wage, and my 22 year old son gets his universal credit. We all live together in council rented house and can now only afford our groceries and rent and general living stuff, leaving nothing to pay off bank loans and credit card debts which we had taken out for home improvements while we were all working and could afford the repayments.
Sara (Debt Camel) says
ok, then in that case as your only income is benefits, you should not have to make any monthly payments after you go bankrupt.
Can I suggest you talk to National Debtline on 0808 808 4000 firstly about advice on bankruptcy. It may well be a good option for you but it is ALWAYS woth talking to a debt adviser about this. And they can also suggest how to complete the income and expenditures pages.
Can I also suggest that you son should be contributing to the household? He may only be getting UC but he can afford £30 a week towards his food and the utilities which will help your and your wife.
Bett says
Hello,
Is there any reason/problem with allowing a creditor to petition for your bankruptcy rather than initiating it yourself? I searched the website to see what the best course of action was. Would this be more frowned upon and work out a worse situation than if I did it myself, I am in an IVA and trying to avoid bankruptcy but issues with the HMRC means it may become inevitable…I just wondered if there were specific pros to doing it yourself? Thank you.
Sara (Debt Camel) says
So far as I know the only advantage for initiating bankruptcy yourself is that you are in control of the timing. Many other creditors will not petition for you bankruptcy, even ones that sometimes do such as HMRC may not do this speedily.
Why are you trying to avoid bankruptcy – do you have any assets to protect? Do you have debts outside your IVA?
Bett says
Thanks for your reply. It’s quite complex, but put simply the money which needed to be saved to pay my tax due in January has been used on our living expenses. There’s no excuse for it except issues and a complaint w/HMRC means my plans to immediately pay money to them each time someone invoiced me wasn’t possible, they have not supplied me with the details needed to setup the new tax record necessary to make the payments
I’m aware it’s a very poor excuse but it’s unfortunately the truth. I have no other debts outside of my IVA at all. I have a 7-seat car worth approx. £3000 (paid off in Jan 2024) and 5 children, Inc youngest with additional needs so can’t afford to lose it. I am trying to save the money for the tax owed in January but fear it’s an impossible task as everything has been so slow…
Sara (Debt Camel) says
Who is your IVA firm? How much are you paying a month?
Bett says
I pay around £330 a month to increase to £600 and something in February when the car payments are complete. It’s with Mccambridge Duffy and I have been discussing in depth with them too. I just want to try and avoid bankruptcy at all costs because I want my IVA to succeed but not paying tax in full by Jan 31st I believed triggers bankruptcy.
Sara (Debt Camel) says
MCD do a lot of IVAs for the self emplyed. They should be able to talk you through this. So far as I know you should be able to make a payment arrangement with HMRC and have your IVA payments reduced so you can afford it. But your IVA may need to be extended.
Bett says
Thank you for taking the time to reply it is very much appreciated
Bett says
The level of stress and fear the HMRC cause is becoming unbearable. I accept I should have tried harder to save but everything has increased from my rent to car insurance to food. ..I think I’m just hoping I can find the needed money but by January is so unlikely. If the speed of bankruptcy petitions by HMRC and others is slow, perhaps I’ll have beyond January to find it. It’s such a mess. I entered the IVA to avoid this yet I’ve failed again.
Gabriel says
Hi. I’m in the process of getting an IVA ( the meeting with the creditors is on 31 January 2024) but after some discussion with friends, they recommended me that I will be better with a bankruptcy. I’m still not sure what is best, I don’t have a house or assets or car… I will call tomorrow morning National Debtline. Any ideas ?can I stop the iva ( it didn’t started yet )I’m afraid also that because of my mental health I won’t be able to hold my job l and I will just do some food deliveries ( just eat, Uber Eats, deliveroo ) ( I use a friend car )
Sara (Debt Camel) says
Your friends may well be right as you don’t have any assets to protect.
Can you say which the IVA firm is? How large your debts are? And how much your monthly payments would be?
Gabriel says
It’s Bennett jones. The payment will be £120 but i will really struggle to even keep up with that regular payment for the next 5 years :( My debs are in total of £11500 . Would it be to late to cancel the Iva meeting with the creditors with less then 24 hours before ? Like I’m allowed to change my mind and do bankruptcy? I didn’t understand it at the beginning but I think it’s a better solution for myself and would help me more.
Sara (Debt Camel) says
ok, it would have been better to speak to a debt adviser about bankruptcy first, but as time is so tight to get this IVA approval meeting cancelled you have to do that now. In the event that an IVA does seem like your best options (nothing you have said makes that sound likely, but just in case…) you can always get a new IVA proposal set up.
You need to look at the IVA paperwork – it will have the name of your Insolvency Practitioner on it. It will probably be be either Gregory Mullarkey or Dean Smith. let me know if it is a different name. Their emails addresses are greg.mullarkey@bennettjonesinsolvency.co.uk and dean.smith.ip@gmail.com. You need to email the IP with the subject line “URGENT – I WANT YOU TO CANCEL TOMORROWS CREDITOR MEETING”
cc this email to help@office.bennett-jones.co.uk and info@bennett-jones.co.uk and any email address you have been using so far with them
Say you are concerned about your mental health and that you will not be able to continue in your job. Add that as you have no assets to protect in an IVA, you would rather look at bankruptcy or, if your income drops, a Debt Relief Order. Say you do not want to go ahead with the IVA and you would like the Creditors meeting to Approve the IVA on the 31 January cancelled.
You also need to phone up your contact and say the same thing.
This is a hassle so late but it can be done. BJ will not want an IVA to go ahead that will fail.
Gabriel says
Thank you ! I just canceled the Iva. Now i have given been another option that I don’t know much about : DRO … not sure what to choose between DRO and bankruptcy… with DRO are monthly checks ? What about bankruptcy? Are they doing monthly checks ? Sorry for all this questions
Sara (Debt Camel) says
this is why you need to speak to a proper debt adviser. Have you managed to get through to National Debtline? You have to persevere, they are always busy in late January.
If you are eligible fora DRO it is ALWAYS better than an IVA and in 99 cases out of a hundred it is better than bankruptcy. See https://debtcamel.co.uk/debt-options/dro/
Gabriel says
National debline is keep saying they are unable to take my call and their website is not working… from what i see a DRO is the best solution, just need to get in touch with a debt advisor. Which is the best place to go for the DRO ?
Many thanks 🙏
Gabriel
Sara (Debt Camel) says
So BJ thought you have £120 a month spare – if that is correct, you will not qualify for a DRO, it has to be under £75 a month. You can try your local Citizens Advice or try National Debtline again in a day or two when their systems problems have been sorted out.
Gabriel says
They haven’t took in consideration my medication and therapy for my disability and they kind of told me we have to make the budget to fit that £120 otherwise I wasn’t qualified. But i felt more push towards IVA without thinking it too much. I’m worried about work and future, now i have reduced hours at work because of my mental health (disability- ADHD).
The DRO sounds like is the best solution for me.
Sara (Debt Camel) says
it does indeed. You will get through to National Debtline in the end.
LucyC says
I hope you can help. I am about to go bankrupt, mostly due to business debts that were personally guaranteed (approx £30k). I have so many worries and it’s really affecting my mental health!
– I have just started studying full time and will soon receive a bursary (£1500 each month for 10 months). As I applied late, I will receive the first 2 instalments together at the end of November (£3000) – will this be seen as a lump sum that will be taken off me when my bank is frozen?
– I have also applied for a maintenance loan and am likely to be eligible for the full £10,227, I am still waiting for this to be approved by student finance. My husband is currently unemployed after being made redundant last year. We receive approx £1200 a month in Universal Credit. He has just received a letter stating he may be entitled to an additional £420 due to limited work capability. Will my husband’s limited work capability allowance be included in my income?
Sara (Debt Camel) says
I suggest you talk to Business Debtline https://www.businessdebtline.org/ about this – if the answer to your first point isnt clear, then postpoing bankruptcy for a few weeks may be a good idea.
LucyC says
Thank you. I have tried speaking with Business Debtline and Citizens Advice. I am still technically listed as a director of a company but it is under application to be struck off with Companies House. The company is no longer trading and has no assets.
To add to my previous message, in total we could be looking at an income of approx £4000 with everything but I spoke to someone at Citizens Advice yesterday and they said the PGCE bursary and maintenance loan will not be considered as income for an IPA so this would take our income to approx £2892 which would not leave us with any expendable income. I keep seeing conflicting advice about this online though and I really don’t want to end up stuck in a 3 year payment plan, particularly as I don’t know what will happen once I’m no longer studying. This is the only ‘income’ I will be receiving other that state benefits – is it likely that I will be entered into an IPA? I’m scared to go ahead with the bankruptcy and then not be able to get out of it if I’m hit with an IPA.
Sara (Debt Camel) says
Those debt advisers are the best placed to advise you. If you don’t think you will be left with any spare income , that reinforces what Citizens Advice have told you.