A reader has asked if my recent article on redundancy payments and bankruptcy also applies to inheriting money or assets when you are bankrupt. The answer is "Yes", but there are a few extra points to consider. The date of death is the key date You become entitled to an inheritance as soon as the person has died, so it legally forms one of your assets from this point. There are three cases … [Read more...]
Will the OR take my redundancy money?
A reader has asked: I have been offered redundancy. I would like to retrain for a more interesting job, but I still have nearly a year of IPA payments to make, so will the Official Receiver take all my redundancy pay? It depends on your discharge date The answer to the question depends on whether the last day of employment is before or after the date of discharge from bankruptcy. There are … [Read more...]
Should you accept DFD’s proposed IVA variation?
A reader has sent me copies of the documentation that Debt Free Direct (DFD) are asking him to sign to change the terms of his IVA. It includes: a Deed of Assignment, which relates to PPI reclaims, and a Variation in IVA conditions to adopt the 2014 Protocol. DFD has over 24,000 IVAs outstanding so this could be a common problem. *** UPDATE - DFD have replied with detailed comments … [Read more...]
Keep a spending diary – or get an app to do it for you!
If you feel your money just vanishes or you are worried your budget isn't realistic, tracking your spending will give you the facts you need to take control. Without knowing what you actually spend, all too often plans to cut back are just good intentions that don't work in practice. Why you need a spending diary Many people have little idea about what they spend - it feels as though their … [Read more...]
Will my bankruptcy application be refused?
"Can I go bankrupt?" is a very common question. People worry that their bankruptcy application will be rejected because their debts aren't large enough or the Official Receiver will say they should repay the money or that they don't meet the legal criteria. Some firms prey on these sorts of worries, see Making Bankruptcy sound scary. The helpful sounding box below is an example of this. If you … [Read more...]
Should you tell creditors you are going bankrupt?
People often ask if they should tell their creditors that they are going to go bankrupt. It is normally a good idea to tell your creditors if you are in financial difficulties, not ignore them. But in this situation it won't help you much and, if you own a house, it could be dangerous. You won't gain from telling your creditors Few creditors will feel sorry for you and stop pestering you if … [Read more...]
2014 – change to IVA protocol
A few words have been changed in the 2014 IVA Protocol. This post looks at the addition of secured loans in the equity release section - what are its implications and do you need to be concerned about it? For a more general overview of IVAs and their advantages and disadvantages, see this page. Update - July 2016 - there are a lot of changes in the new version which has just been published - … [Read more...]
Can you stop using a credit card? There’s only one way to find out!
If you are serious about paying off your debt, stopping using your credit cards and catalogues is the key first step to take. Until your debt stops increasing, you can't make a realistic plan to clear your current debt. As the saying goes, if you want to get out of a hole, then stop digging. But how hard will it be? Four common excuses for not giving it a go Do you recognise any of … [Read more...]
Informal or formal arrangement with my creditors?
What is the difference between a formal and an informal arrangement with my creditors? a reader asked. This post looks at what the alternatives are and how to decide which is better for you. If you pull on a pair of jeans and a T-shirt, then it's easy enough to add a jumper if it gets chilly or switch to old trainers if your new shoes are rubbing. But you need to plan formal dress more … [Read more...]
Should I use DLA / PIP money to pay debts?
Disability benefits such as Disability Living Allowance (DLA), Personal Independence payment (PIP) and Attendance Allowance (AA) are meant to cover the extra costs you get because of the disability. So is it right to use this extra money to pay off debts? Can your creditors make you do this? That may sound a bit abstract, but it leads to a very practical question - if you need a Debt Management … [Read more...]
When to send a Prove It letter about a debt
If you get a letter saying you owe money on a debt you don’t recognise, or which you thought you had paid off, you need to challenge the creditor to prove that you do owe the money. Sometimes debt collectors have simply got the wrong person. This is sometimes called a mis-trace. This is what the Financial Ombudsman says about mis-traces: We would ask a debt collector to provide evidence to … [Read more...]
What to do if Full & Final settlement offer is rejected?
A reader asked what she should do as her reasonable Full & Final settlement offer had been rejected. It's going to seem obvious, but the creditor rejected the offer because it didn't seem reasonable to them. You may be thinking "I paid off the amount I borrowed ages ago, their interest is too high" or "They probably bought this debt for pennies, so they should be happy to accept 10%" but … [Read more...]
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