A reader asked:
I am thinking of filing for bankruptcy. Some of my debts go back quite few years. I tried a DMP and an IVA that failed. I’m behind on my household Bills too.
I’m single mum and find hard to cope with all this stress. I finally plucked the courage to do the form. I have at least 13 creditors, some of these details I took off my IVA creditors list but some have passed the debts onto others and some of the names of companies I don’t even know.
I’ve put down an estimate on some of them of what I owe as don’t have the paperwork. Is this ok to do as I don’t want to get it wrong?
Filling out official forms and realising you don’t know some of the details is stressful. And if you have gone bankrupt then found out that you missed a debt off the list of your debts in your bankruptcy application, you may be panicking.
This normally isn’t a problem!
If the debt would have been included in your bankruptcy if you had listed it at the start, then the debt will still be wiped out. And it doesn’t matter if the amount of the debt you put on the bankruptcy application isn’t right, it is still all included.
In case you think this sounds unlikely, the relevant legislation is s382 of the Insolvency Act.
NB this only applies to bankruptcy. In a DRO or an IVA, only the debts listed on the application are included, so it’s important you get them right!
It’s still a good idea to try to list everything when you are completing the online bankruptcy application forms, because the Official Receiver will tell all the listed creditors. If you miss some off, they may still contact you and you will have to tell each of them when you went bankrupt.
Looking at some detailed questions from other readers:
Debts sold to a debt collector
I have had a couple of catalogue debts passed to debt collectors several times and have lost track. Do I have to phone the last one to try to find out?
Sometimes the original creditor is just asking a debt collector to collect the debt – then the original creditor still owns it. Sometimes they have sold your debt and the debt collector is now the creditor.
But you don’t have to track down who owns the debt now or find out if a debt collector is just acting for another creditor. Just put down the last details that you had and your best estimate of the amount owed.
I forgot to put some old utility debts on my bankruptcy application, will I still have to pay them?
No, you won’t have to pay these bills. This is a very common omission – provided the date of the debt was before your bankruptcy decision they will be included in your bankruptcy.
So write to the utility company and inform them that you went bankrupt on dd/mm/yy and your bankruptcy number is 12345678. If you have a pre-payment meter with the debt loaded on to it, ask them to stop deducting money for the debt from your payments.
Also tell your Official Receiver’s office about the debt you missed off. They won’t mind but they do need a complete list of your debts.
Tax credit overpayment
I was declared BR a year ago. I have since been to a tribunal concerning a tax credit debt. Although my appeal was not allowed the judge clearly write in the paperwork the debt was included in my bankruptcy and was not repayable. Today I received a letter from HMRC demanding this payment with no ref to my bankruptcy or the tribunal’s decision. Can I still be liable for this debt for some reason – I’m not getting tax credits anymore.
This tax credit debt should be included in your bankruptcy unless:
- it relates to a period after your bankruptcy application was approved. So if you went bankrupt in Jan 2013 a tax credits overpayment for 2014-15 wouldn’t be included; or
- it is considered that the overpayment occurred because you committed fraud. As the tribunal judge said the debt would be covered by bankruptcy, this seems unlikely.
I suggest you tell your Official Receiver’s office about the debt and ask if it is covered. If they confirm that it is covered (which would be the majority of cases), write to HMRC and say you went bankrupt on dd/mm/yy, bankruptcy number 12345678 and so you are not liable for this debt.
If you get more letters from them chasing this debt after you have told them about your bankruptcy, put in a written complaint.
Child Support arrears
The CMS have said they will be taking money from my earnings. Can I stop this because I went bankrupt last year?
Child maintenance arrears are one of the few types of debts that can’t be included in bankruptcy, so having gone bankrupt won’t stop these deductions.
Obviously, this will reduce your income, so inform your Official Receiver’s office about this. If you are paying an IPA (most people who go bankrupt don’t) your monthly payments will be reduced as your income is now lower.
Tell your OR about any debts you have missed off
You should tell your Official Receiver’s office if you find you have missed a debt off. They won’t mind, you haven’t done anything wrong. But they need to know in case they have to make a distribution to your creditors.
If you are trying to fill out your bankruptcy application, it’s always good to talk to a debt adviser about this. they can check you don’t have a better option than bankruptcy and they will be able to talk about which debts can be included.