Following an Appeal Court ruling on Horton vs Henry, published in October 2016, pensions are once again safe if you go bankrupt. The full judgment is here. The background to this case was: before 2000, pensions formed part of a bankrupt's estate and would be taken once the bankrupt reached pension age; the Welfare Reform and Pensions Act changed this. For people going bankrupt after … [Read more...]
Is my house safe if my new partner goes bankrupt
Ms P asked "I want my partner to move in with me but he may have to go bankrupt so we need advice on the timing. He has got a lot of debt trying to keep his business going but it doesn't seem to be working. I have a house with a lot of equity and we don't want this to be at risk at all. The question is if he moves in now and goes bankrupt in a few months, will that cause a problem? Or is it … [Read more...]
IVA lead generators – the case for regulation
IVAs are now the most common form of personal insolvency in England. Clear Debt has recently stated: Individual Voluntary Arrangements) (IVAs) have become the procedure of choice for those people who have debts they can’t pay and a regular income to enable them to make contributions to their debts. But how often is the choice of an IVA based on accurate information about the alternatives and … [Read more...]
Can you have too little income to go bankrupt?
A reader asked: I was told bankruptcy is not recommended to me as I do not have an income. Not sure what that means really as that is why I have debt problems as I have no income :( Any possible future employment is not near enough to pay the monthly payments told to me of a debt management plan. So confused I need to get richer to be bankrupt or get even richer to pay debt management or get … [Read more...]
IVA early exit loans – Perinta/Creditfix and Sprout/Aperture
Early IVA exit loans from Perinta offered in 2016 to Creditfix customers Some people have been told they can end their IVA by taking an "early exit loan" from Perinta Finance Ltd, via a broker called Just Lending. Creditfix is sending these emails, but the loan may be available to people in IVAs with other firms. Pearse Flynn, the CEO of Creditfix, used to be a director of Perinta, but no longer … [Read more...]
Paying BadDebtor won’t help your credit record
A reader who had gone bankrupt recently was surprised to get a letter from "The Register of Bad Debtors". This offered to remove her name from their records if she pays them £49.95. She asked if BadDebtor can really do this? There are also reports that people with IVAs are receiving similar letters. In 2017 the Bad Debtor website was taken down. Before that, some people I had contacted - none … [Read more...]
Re-thinking Insolvency Practitioner Regulation
This is a guest post by Peter Sargent, an Insolvency Practitioner and Consultant at BHP Clough Corporate Solutions. He is a member of the IPA’s Membership & Authorisation Committee and former president of R3. The failure of Varden Nuttall (and its holding company), a middle ground IVA bulk provider has brought into sharp relief the current system of Insolvency Practitioner (IP) … [Read more...]
“I borrowed 20k in two weeks” – a bipolar spending spree
Manic spending, during a high or period of mania, is one of the six triggers for increased spending identified in the Money and Mental Health Policy Institute's report, In Control: A consultation on regulating spending during periods of poor mental health. I was contacted by a reader who has suffered from bipolar disorder for many years - this is Miss D's story. I was diagnosed with … [Read more...]
Do you need help to escape from unaffordable debt?
My articles on How to ask for refunds looks at how to make affordability complaints about different sorts of debt - overdafts, loans, credit cards, catalogues, even car finance. It also applies if you have repaid the credit already or if you are still repaying a balance. But what do you do about this month's repayments if you can't manage them? You can't put in a complaint and then carry on … [Read more...]
The 2016 IVA Protocol – what has changed?
In June the new 2016 IVA Protocol was published. It would have be helpful if the Standing Committee had issued a guide to the changes from the 2014 Protocol, but they haven't, so this article looks at the significant changes, ignoring routine updating (such as replacing OFT by FCA) and some which seem to me to be very minor. My thanks to Michelle Butler who wrote about the changes earlier this … [Read more...]
Interest only mortgages and debt advice
The Financial Conduct Authority (FCA), who regulates the mortgage lenders, issued an update in 2018 saying they are still concerned about the number of interest-only mortgages customers will not be able to repay at the end. It said: Since 2013 good progress has been made in reducing the number of people with interest-only mortgages. However, we are very concerned that a significant number of … [Read more...]
Wonga refunds – what happened before administration
This page covered the complaints and refunds process before Wonga went under on 30 August. Events in August 2018 August 4 - Wonga forced to ask investors for £10million in funding as the cost of affordability complaints increases. 26 August - news reports that Wonga was in trouble. Sky News reported that: Directors of the payday lender Wonga could appoint Grant Thornton as the … [Read more...]
Calculate the 8% extra interest on refunds – not easy
When the Financial Ombudsman upholds a complaint about an affordability complaint, the typical award is a refund of interest and charges on the unaffordable credit plus 8% simple interest. This interest can add up to a lot of money if the loans were repaid a few years ago. If you want to find out more about affordability refunds, and how people are winning these cases even when they never … [Read more...]
Varden Nuttall – what happened
Varden Nuttall, a mid-size Individual Voluntary Arrangement (IVA) firm, was placed into administration on 24 March 2016. The administrators discovered that £9million was missing from the client account and evidence of fraudulent practices by Philip Nuttall, one of the insolvency practitioners and a director of Varden Nuttall Limited, In October 2018, Philip Nuttall was found to be in … [Read more...]
Misleading & aggressive debt recovery
A reader asked: My previous electrician has hired a debt collector, Guardian Recovery, to chase me for money for additional works never carried out. He refuses to engage with any meaningful discussion. I have now received an email from Guard Rec saying a notice of default may now be applied to my credit file. Can I actually receive a NOTICE OF DEFAULT on my credit report via a private dispute … [Read more...]
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