If you expect to go bankrupt soon you may be worried about whether your pension will be safe.
The Insolvency Service published a summary of its new guidance on pensions and bankruptcy in England and Wales in 2015 after the “Pension Freedom” changes that year made it possible for many people to take money out of their pension from age 55, even if they are still working.
There was some legal uncertainty at that point, but that was resolved after an Appeal Court judgment in the Horton v Henry case in October 2016, and the IS guidance was not changed
There are five main situations to consider. At the bottom of the article, I look at where to get further advice and gives some links with further information.
Contents
Background – what is an IPA?
The Official Receiver calculates whether someone who goes bankrupt has enough “spare income” after meeting the reasonable domestic needs of their family to be able to make monthly payments. A large majority of people who go bankrupt do not have to make any monthly payments.
These monthly payments are known as an Income Payments Arrangement (IPA). Pensions affect how much money you have and so they can impact on IPAs.
IPAs last for three years. they can’t be extended. They can only be imposed before you are discharged. They are flexible, so you have to report extra income and if your circumstances get worse they can be reduced, to zero if necessary.
Case 1) Already getting a regular pension income
If you are getting a monthly pension, from a final salary scheme or an annuity or the state pension, this is treated the same as any other income for the OR’s IPA calculations.
Case 2) Bankrupt before 2000
If you went bankrupt before 29 May 2000, a Trustee in Bankruptcy, appointed by your OR, will have taken control of your assets, including your rights to future pensions, and will use them to pay off your creditors.
On 29 May 2000, new bankruptcy rules gave much greater protection to pensions for people that went bankrupt after that date.
Case 3) Bankrupt after 2000 and discharged
When you are not in an IPA
If no IPA was set before you were discharged, you can take your pension, including any lump sum, and the OR will have no claim on it. An IPA cannot be started after you are discharged because you have drawn a pension.
This also applies if an IPA was set and it has ended – the OR can have no further claim on any pension money.
During an IPA
If you are paying an IPA, money you take from your pension is taken into account for the IPA. A regular income from your pension forms part of the IPA calculations.
A lump sum from your pension is seen by the OR as a form of income. Some of it is likely to be claimed as a single payment by the OR as part of your IPA. The amount depends on the number of months remaining on the IPA:
- 24-36 months remaining – 75% of the lump sum
- 12-24 months remaining – 50% of the lump sum
- 1-12 months remaining – 25% of the lump sum.
Can you delay taking your pension?
If you have a choice about when you take your pension, it may be sensible to delay taking any money until your IPA has ended.
The Official Receiver will not tell you to take any money out of your pension – you can delay taking your pension for as long as you want.
If you have no choice about when to take your pension and it has to be started while you are paying an IPA, ask your pension provider what your options are for the amount of the tax-free lump sum you take. You may be able to exchange part of the tax-free lump sum most people take for a larger monthly pension – this may be a good idea if a lot of the tax-free lump sum would otherwise be claimed by the OR.
Case 4) Bankrupt after 2000 and undischarged
Starting to take a pension
If you start to take a monthly income from your pension, this will be taken into account in IPA calculations.
Taking a lump sum
If you take a lump sum from your pension before you are discharged, this is treated as an “after acquired” asset and you may have to pay all of it to the OR.
The OR will take into account the needs of you and your family. If your income is low, the OR may decide not to claim all or any of the lump sum. But if you are likely to have to pay an IPA, then it is probable that all the lump sum would be claimed by the OR
Can you delay taking your pension?
If you have a choice about when you take your pension, it may be sensible to delay taking any money until you are discharged and until after any IPA has ended.
The Official Receiver will not tell you to take any money out of your pension – you can delay taking your pension for as long as you want.
If you have no choice about when to take your pension and it has to be started before you are discharged, ask your pension provider what your options are for the amount of the tax-free lump sum you take. You may be able to exchange part of the tax-free lump sum most people take for a larger monthly pension, before discharge this may prevent the whole of the tax-free lump sum being claimed by the OR.
Case 5) Considering bankruptcy – the “insolvency check”
What is the insolvency check?
When you submit your bankruptcy application online, the Adjudicator looks at whether you are insolvent and will reject your application if you aren’t.
In 2015, when the “pensions freedoms” began and people started to be able to draw pensions from age 55, the insolvency check was extended to cover access to pensions for some people. The Insolvency Service’s guidelines state:
“Where the debtor is over 55 and has access to an undrawn personal pension fund … the official receivers are asked to consider whether the insolvency test has been met and, at the date of the petition the debtor is unable to meet their debts. In bankruptcy the official receiver will consider whether it would be appropriate to seek an annulment of the order.”
This is saying if you could have taken money out of your pension and that would have been enough to repay the debts that were included in your bankruptcy, then you are not actually “insolvent” and so should not have your bankruptcy application approved.
This check won’t apply to you in any of the following situations:
- you were under 55 when you go bankrupt, or
- a creditor is making you bankrupt, or
- your pensions are already in payment through an annuity, or
- your only undrawn pension is a “defined benefit” scheme, sometimes known as a “final salary” scheme. The Official Receiver is only interested in personal pensions, sometimes known as “defined contribution” or “money purchase” pensions.
This guidance doesn’t spell out the exact calculation that the Adjudicator will do but it will take into account the tax and charges you would pay if you took money out of your pension. Both the tax and the charges could be more than you expect, see the Links at bottom of this article.
Recent court case (2021)
A 64-year-old had their bankruptcy application refused by an adjudicator due to them having access to their pension of £440,000 which would allow them to settle their debts of £170,000. This decision went to court, the judge reversed the adjudicator’s decision was reversed and Shaw was declared bankrupt. However, the Insolvency Service appealed this decision and it was reversed in the High Court.
If you think your bankruptcy may be refused because of your pension, you should talk to a debt adviser about your options.
Alternative debt options if your pension means you may fail the insolvency check
If your undrawn pension is too large for you to be able to go bankrupt your possible alternatives will depend on how large your debts are, how large your pension is and your general financial situation. These could include:
- taking some money out of your pension to clear some or all of your debts;
- consider making full and final settlement offers. You may not need to repay the full amount of your debts and can leave more of your pension untouched. Full and Final offers are most likely to be accepted on consumer debts (credit cards, bank loans, payday loans etc) that you have already defaulted on;
- if taking your pension early would involve a lot of extra tax and charges, it may be better to postpone this for a while, possibly having a debt management plan in the interim. You may be able to minimise tax by spreading your withdrawals across different tax years;
- you could look at the alternative of an IVA, but this isn’t an easy option, see this overview. It may be much simpler to take some money out of your pension and get full and final settlements with it. This would mean not having to make IVA payments for 5 years and you would avoid having an IVA insolvency marker on your credit file. Also read Is your pension safe in an IVA?
Where to get advice & useful links
If you live in Scotland, this article is not relevant for you and you need to talk to a Scottish debt adviser.
On taking money from a pension
If you are thinking of taking money out of your pension, get a Pension Wise appointment. This will make sure you are aware of all the different options for using your pension – there are a lot of them! The appointments are free and can be over the phone or face-to-face.
Pension Wise will not give you advice on your debt problems. If you are getting any means-tested benefits, you may also need advice on whether these will be affected by taking money out of your pension. Citizens Advice is a good place to go to for advice on both debts and benefits.
On deciding whether to go bankrupt
It is always a good idea to take debt advice before applying for bankruptcy. You may think it is your only, or your best, option but it is worth the time to check with an expert. This is especially important if you are worried about whether you might be classified as “not insolvent” because of your pension.
Citizens Advice can give face-to-face advice or, for telephone advice, call National Debtline.
Challenging any decisions when you are bankrupt
If you are unhappy about the decision of an Official Receiver (or a Trustee in Bankruptcy if one has been appointed), you need legal advice on whether you can challenge it.
Your local Citizens Advice may be able to help or to refer you to a local Law Centre that can give you free advice. Otherwise you need to look for a solicitor who has experience with personal insolvency.
Useful links
- The full Insolvency Service guidance is here: Guidance issued to official receivers.
- For a general article on taking money early from a pension: Should you use your pension to clear your debts?
- How much tax you would pay if you take money from your pension: Which? calculator.
peter g says
Hi I was declared bankrupt 25 years ago and am trying to cash my pension in which was not protected can the official reciver take my pension even though theytook my car and van at the time thankyou
Sara (Debt Camel) says
Hi Peter, this comes into Case 2 in this article. It’s important you don’t actually withdraw any money before getting it clarified what will happen.
S.Wright says
I was discharged from Bankruptcy July 2015 after I was made bankrupt. I have a final salary pension pot of approximately £89,000 which was not taken into account on my bankruptcy. As I am single and have no intention of remarrying I wish to do a drawdown so I can hopefully leave money to my son on my death. Can the Official Receiver take any of my pension
Sara (Debt Camel) says
Hi, it sounds as though you may come into the “case 3” described in this article. However I think you might need to take some advice on your pension so you are clear about your options – some of the wording you use makes it sound as though you have a money purchase pension, not a final salary one. I strongly suggest talking to Pension Wise about your options as this article suggests.
terry says
hi i was declared bankrupt march 2006 discharged march 2007 can the trustee still take my pension
Sara (Debt Camel) says
Hi Terry – no, you should be fine. Your Official Receivers office should be able to confirm this to you, or the Insolvency Helpline 0300 678 0015.
Desmond says
Hi i am drawing my works pension and my state pension how would Bankruptcy affect these pensions
Sara (Debt Camel) says
Hi Desmond, if you are already drawing these pensions, then bankruptcy won’t affect them directly. However they will count as “income” when the Official Receiver looks at whether you can afford to make monthly monthly payments (these are called an Income Payments Agreement) for three years.
Mike says
Good afternoon
I was declared bankrupt on 23 March 2015 and anticipate being discharged on 23 March 2016, having fulfilled all the terms of the bankruptcy order including returning a tax rebate to the OR as required.
I currently draw a small pension, which the OR is aware of, but have a couple of (v. small max £3000<) old personal/company pensions which I could now cash in when the next tax year starts due to the change in pension legislation in April 2015. I could not do this at the time I was declared bankrupt as the legislation had not been introduced and I could, therefore. not access the funds. (These pensions were detailed on my bankruptcy petition – I did not attempt to hide them.)
If I were to cash in these small pots, post-discharge, would they be considered assets by the OR, which should be passed to my creditors?
Reading your article, it would appear that I would be OK to do so, but would appreciate your view.
Thank you
Sara (Debt Camel) says
HI Mike, I suggest you check this with your Official Receiver’s office.
Karen says
Hi we went bankrupt in 2010 can you tell me that if my husband takes his lump sum pension can we keep it also a friend has left some inheritance can we keep that too we are discharged but recently got ppi refund went to receivers also I got tax refund and that went to them too
Sara (Debt Camel) says
Hi Karen,
your husband’s pension is safe if he takes a lump sum now.
And providing the friend who left the inheritance died after your husband was discharged, that will be safe too – see https://debtcamel.co.uk/inherit-money-bankrupt/ for details.
Peter says
I was bankrupt in July 2009 and discharged in July 2010
I am 55 and intend to cash in my pension valued at around £29000 (£7500 tax free and remainder taxed at source)
Will my previous bankruptcy prevent me from doing this?
Thanks Peter
Sara (Debt Camel) says
Your previous bankruptcy should not stop you doing this.
Paul says
I went bankrupt in 1992. For £7200
I have an annuity worth £6500 Tax free lump sum and £20000 that I can Draw now as I am 63
I expect the receiver to take the whole thing is that right ?
Sara (Debt Camel) says
Hi Paul, it sounds as if you will be in “Case 2” in this post. I’m sorry but I can’t help further than that.
Paul says
Thanks for your reply Sara
Just waiting for OR and Abbey Life to come to a decision
I will let you all know what that is.
Paul says
I was granted my pension after a waiting period of just over a month.
I have since had a letter saying the Official Receiver has an interest in my pension dated 7th of July.
Just have to wait.
David says
I am in a similar position, being made bankrupt in 1992 and the Trustees still are claiming an interest in it. I was told at the time of my bankruptcy however that my pension was “Approved” and they couldn’t touch it. If it had not been approved then they would have taken it at the time as they did with my Life policies
Paul Graville says
Full value has been realized and sent to the Insolvency Service in Cardiff I( am not sure if I will hear from them or not.
Like I said this is all pretty complicated.
Paul Graville says
At the end of this I did manage to keep part of my pension as I had not personally paid anything towards it.
Marilyn Carr says
Hi I was made bankrupt in 1999, although I haven’t made any payment into my pension fund since that time, I have received notification that what I had paid in was now payable to myself. Today I received a copy of a letter from the agent for the official receiver requesting payment goes to them ??
Sara (Debt Camel) says
It sounds as though you will be in Case 2 in this article.
John Doran says
Hi, having more debts than I can ever repay (I have been making monthly payments for 6 years via a debt management company), I am now 69, draw my state pension plus a small occupational pension of £500/month.. I also draw an even smaller amount from a non-UK pension.. I am now considering filing for bankruptcy as I wish to move near my children who live overseas.. will my creditors be able to have access to either my pensions or bank account??
Sara (Debt Camel) says
As your pensions are in payment, they will be used to calculate if you have “spare income” each month, which you would have to pay to the official Receiver for 3 years, Whether you have any spare will depend on what your rent and living expenses are.
Kev says
I have just been discharged from bankruptcy .will my pension be protected either as regular income or taken as a lump sum .im under 55
Sara (Debt Camel) says
If you went bankrupt a year ago and you have just been discharged your pension is “safe”. If you are currently paying an IPA and you start drawing an income from your pension, then the amount of your IPA is likely to be increased.
But if you are under 55 I would hope that you won’t need to touch your pension at all for many years!
John says
I have unfortunately been bankrupt twice
First time was in 1993 when my Parent Franchise company went bust and took me with it. I had started my pension plan then.
2nd time was 2007 when I was in crisis, and I made my pensions known at that time , discharged a year later – though they forgot to let me know.
I have recently at the age of 61 started to claim my pension benefits , and The Insolvency agency took the 25% and advertised in the papers for creditors to come forward- telling me that if it was not all claimed then I would receive the balance back. This has all taken place, and no-one came forward. Now however they are saying that as they had converted it into a cash asset in their keeping they are going to repay my creditors from 2007 – even though this was all settled, and that bankruptcy was after the 2000 changes.
surely this cant be right, is it worth contacting a solicitor or will I be losing more money?
Sara (Debt Camel) says
I haven’t heard of a case such as this, but you really do need to talk to a solicitor that specialises in insolvency about this. Let me know (https://debtcamel.co.uk/about/contact/) if you don’t know who to speak to.
Will says
Hi i was discharged from my bankruptcy in feb 2015 but the OR can still claim any equity in my house up till feb 2017, it is currently in negative equity. As i am now 55 if i take a lump sum from my pension can the OR take this in lieu of house equity please?
Sara (Debt Camel) says
No. But don’t use the money to pay off the mortgage so the house no longer has negative equity!
Jo says
I declared bankruptcy on 8/3/16. I have a small personal pension pot of 70,000.
The Trustee in B says he cannot touch this and that I could draw down a lump sum to buy back my assets and use rest to pay my family living expenses as we have no other income.
This was not my understanding of the rules pre discharge.
Can you clarify please?
Sara (Debt Camel) says
If you have it clearly set out in writing that you can do this then I wouldn’t be concerned that the TiB will later change his mind.
In one way it seems quite a sensible thing for the TiB to say – he can’t touch your pension, but if you choose to buy back some assets well he is getting some money back early and with very little hassle.
Of course that doesn’t mean it is sensible for you to do this… presumably you are getting some welfare benefits at the moment – i think you need to talk to Citizens Advice about whether taking this money from your pension could affect your benefit situation.
Malcolm says
Hi
I went bankrupt to the value of £74,000 on 4/02/2008 At the time of my bankruptcy I sent a copy of my corporate pension illustration to the official receiver it had a transfer value of £31,000. On 29/2/2008 I received a letter from the insolvency service stating that the my pension ‘did not form part of the bankruptcy estate and dose not vest in the trustee in bankruptcy “. I was not subject to an income payments order.
The pension was frozen in March 2000 and no further payments were made to the pension pot after that date.
I was automatically discharged on 4/2/2009 and over the last 8 years have build my credit rating back up and am not in debt i.e I have learnt to live within my means !!!
I was 55 earlier this year and am currently unemployed claiming JSA & housing benefit, I have started the process to draw down my pension which now has a transfer vale of £171,000. I am intending to use part of the pot to start up as a self emplyed taxi driver and am aware that once I get the money I will have to come off benefits and that I will pay a significant amount of tax.
On my application pack to draw down the lump some there is a claus stating that I must declare by bankruptcy to the pension provider and
Provide a copy of the Bankruptcy order which I have. I also have a copy of the letter from the insolvency service dated 29/02/08 declaring they have no interest in my policy but I do not have a discharge certificate do I need to get one from the court where the bankruptcy order was made as I was automatically discharged?
As the pension provider will declare my situation to the relevant authorities and due to the significant increase in the value of the pension pot can the insolvency service retrospectively claim back the £74,000 from my lump sum.
I will of course make the declaration to the pension fund provider but as I have this letter from the insolvency service stating no interest in the pension I was wondering If I still needed to declare my bankruptcy ? Obviously I will do the right thing.
Sara (Debt Camel) says
The Official Receiver will have no interest in what you do with this pension, it is safe. I suggest including a copy of the letter from the IS saying they have no interest with the copy of the bankruptcy order. I would be surprised if they ask for certificate of discharge, if they do, this article explains how to get one: https://debtcamel.co.uk/discharged-from-bankruptcy/.
I hope you don’t mind a couple of other points. First that is an extremely large increase in the pension value – so large that I think you need to double check that the figure is correct. Second Uber is close to destroying the black cab and mini cab business in London, if it hasn’t arrived yet in your area it probably soon will. You need to consider carefully this proposed business as the amount of money people have made in the past may not be possible in the next few years.
Malcolm says
Hi Sara,
I must admit when I called them last week I nearly fell off my chair the transfer value quoted on the phone on Fri 2/12 was £171525.89
I have today received the draw down forms and an updated pension illustration which is now sitting at £171832.94 so the pot has increased by £317.05 since last Friday.
When I received my annual statement in April 16 the transfer value was £161264.16 so the policy has increased significantly since April 16
The Fund is made up of the following
Non Protected rights fund £127.153.69
Former protected rights value £44679.25
I am assuming this means that the investments are un-protected and subject to volatility I am aware that the value can fluctuate on a daily basis up or down, the policy is with a highly reputable pension provider. Over the years I have seen the annual transfer figures go up and down significantly the worst being the ones in 2008 at the height of the recession.
Thank you for the heads up regarding Uber I live 200 miles from London and I am only in the speculative stage regarding the Taxi situation so I will do so further research on this matter before committing to anything.
If you have any more comments regarding this please feel free to contribute
David says
I’m 62 years of age I have a sip pension. I took a 25% tax free lump some in 2005. The pension is in the forrm of commercial
buildings which have a rental income of £12k per anum . I have not made an additional contributions other than rent for 10 years. It’s likely I will be made bankrupt in 2017 as my business has gone into administration & I’m unemployd. I. Believe my pension is not an asset in which my creditors or an official receiver can touch. The scheme is recognised by hmrc . I believe because of my age & changes in the law is will be safe ?
Sara (Debt Camel) says
How large are the debts that will be going into your bankruptcy? How much is the value of the assets in your SIPP?
David says
The debts are £760k . The buildings are worth £300k & have 18 years left on a lease to an unrelated party. There’s no cash as the mortgage has only just been paid off. I’m unemployd & have no assets. I’m currently 62 & living with my son & my wife is divorcing me & is claiming a pension sharing order which my solicitor says she will be awarded. The lease devalues the property. I’ve been told the building is not an asset of mine if I go bankrupt & can’t be touched. Most of my debts is my bank on company guaranteed loans. David
Sara (Debt Camel) says
I’m sorry but with this size of assets and a divorce in the mix as well, you need to take professional advice on your debt options.
John says
I am 70 years old and have been drawing a modest State Pension of £810 every four weeks, plus and another £900 per month mix of foreign and company related pension income. No more lump sums to come, all pensions being paid. I do still have about £95K+ in debts for which I have a DMP and think it is best to declare bankruptcy as I want to emigrate. I have no assets. I am however worried that my monthly drawings then will be used to pay larger amounts. Would that be a correct assumption, or can I go bankrupt and continue to keep drawing the full amounts as mentioned. I would appreciate your comments. Thank you, John
Sara (Debt Camel) says
Hi John, that’s a lot of debt and at your age you have no realistic chance of repaying it. Bankruptcy may well be your best option, but I do suggest talking to Natational Debtline to go through your whole situation to see if there are any important things for you to consider or any alternatives.
The Official Receiver can’t make you take more from your pension. 7 out of 8 people going bankrupt don’t have to make any monthly payments. Your income doesn’t sound that large to me, but it will all depend on what your living expenses are when you have emigrated and whether at that time you have any surplus income.
You also need to think about when to go bankrupt – now or after emigrating, see https://debtcamel.co.uk/bankrupt-england-from-abroad/.
SHARON WELLS says
Hi. My parents were declared bankrupt we think, pre 2000. Dad has letters from his works pensions which he had 3, and he received a lump sum. At the time we did explain that he had been declared bankrupt and was surprised he was entitled to have it. He was assured it is fine. He now has 1 small pension left under 2000.00 but had a letter stating the receivers now want that and they mention “small pots exemption”. Will this mean they will now go after him for the pensions he cashed in
Sara (Debt Camel) says
Hi Sharon, I am afraid I don’t know what this “small pots exemption” is in the context of bankruptcy and pensions. Your dad needs to talk to the Offical Receivers office – or if the letter he has had is from the insolvenmcy Service, to whoever sent the letter.
Ange Kennily says
Hi I was made bankrupt in August 2016, with monies due to HMRC, I am due to be discharged after one year. I have workplace pensions (which are very old, it would have been more than 20 years since anything was paid into these, I can claim these come March 2017 when I turn 65, can they claim this money and do I need to declare it to the receivers. This is in Scotland.
Thanks
Sara (Debt Camel) says
In England you would come into Case 4 in the above article, ie it would be better to wait until after you are discharged if that is possible. The same may well apply in Scotland, but I suggest you ask the Accountant in Bankruptcy, see https://www.aib.gov.uk/about-aib/contact-us.
David Lownds says
My Bankruptcy was in 1992 and The OR are claiming it all. Does this court ruling alter my position please?
Sara (Debt Camel) says
As the article above says, I know little about these older bankruptcies.
Vince khor says
I was made bankrupt in 2008, I’m 60 years old. I have personal pension value at £150,000 , can the official receiver claim the money?
Sara (Debt Camel) says
No, you should be fine. If you would like confirmation, the Insolvency Service enquiry line https://www.gov.uk/the-insolvency-service is very helpful.
Mel Miller says
Hello My Stepson went bankrupt in 1997 for £23000
He is now 55 and has a paid up pension worth £34000 with prudential
The insurance company has informed him that the OR has an interest in the fund
Will he receive any funds at all?
Sara (Debt Camel) says
As the article above says for people who went bankrupt before 2000: “Please don’t ask me questions in the Comments below as I don’t know, I am not going to guess and I am just going to repeat what it says in this paragraph.”
C McKenzie says
Hi my dad was made bankrupt back in 1995 and they took his pension off him which was worth around £200k back then. He is now 70 and struggling to live on basic state pension. I see legislation has changed and pensions are now protected. What about those people who lost their pensions prior to this date. Is there anyway of appealing this to the FOS? Similar to the mis sold PR pensions back in the 80s? I just think it’s disgusting that my father worked self employed for over 40 years built up a good personal pension and lost his business in the recession early 90s and got no ptotextion.
Sara (Debt Camel) says
No there is no way of appealing this to the FOS, this isn’t something that was mis-sold, you are complainuing that a law was unfair.
You could talk to your MP but realistically I don’t think anything can be done. Retrospective law changes are very unusual. If parliament had wanted to make the changes retrospective, it could have considered this in 2000 when the change was introduced. It would have been a massive headache to have done that then – to do it now, which would mean unpicking all the cases which have been resolved on the basis of the old rules, would be a nightmare.
Have you done a check on your father’s benefits? If he is just getting the State Pension, with no employers pension or personal pension built up after his bankruptcy, then he will probably be entitled to Pension Credit, Housing Benefit and Council Tax Support. See https://benefits-calculator.turn2us.org.uk/AboutYou which is long but thorough.
Sharon says
I certainly did not think my question would lead to so many responses. Dad thought all was OK as he told various departments about his bankruptcy and thought all OK. Devastated to know that as it was pre the new legislation so they want the pension after all this time.
Martin Johnson says
I am considering bankruptcy. I have a failed IVA behind me (Sept 2015) and currently in a Debt Management program with Step Change
I took a 25% tax free lump sum from a final salary pension in November last year and invested the rest through a financial adviser.
If I do decide to go bankrupt, what effect will this have on the investment?
Sara (Debt Camel) says
Sorry a lot of questions:
what did you do with the tax free lump sum? What is the value of your current pension investment? How large are the debts in your DMP? Are StepChange suggesting bankruptcy? Are you working or are you retired? Are your renting or do you own a house?
Philip Walker says
The following was a post by Tracy Willcox in a different Debtcamel thread a couple of years ago. There seems to be so little information about pre 2000 bankruptcy. Has anyone else approached their OR with a similar request and had a favorable response? As David Lownds said, there seem to be quite a lot of us in this position. Any info would be greatly appreciated.
Tracy Willcox says
May 4, 2015 at 11:39 pm
Ask the official receiver if you can purchase their 45% of the pension. My ex partner was made bankrupt in 1995. We paid the OR 45% of the pension pot to release the pension to him. worth a try
David Lownds says
I was also offered this deal on 17th March 2014, but then within on 1st May 2014 they wrote to me again saying that ” As a result of changes made to Paragraph 7 to Schedule 29 of the Finance Act 2004 as a result of the March 2014 budget which became effective on 27 March 2014 the amount of the trivial lump sum has now been increased from £18,000 to £30,000. As a consequence the offer detailed in our letter dated 17th March 2014 is hereby revoked”
Seems like all smoke and mirrors to me, while I am just about surviving on Pension Credit!
terry says
Hi I was made bankrupt jan 2012. I then paid an ipa agreement for three years. I will be 55 this year, and have a small lump sum of £10,000.
from a dormant work pension fund, which i had not paid anything into for 25 years. will this money be safe for me to take?
Sara (Debt Camel) says
I can’t see why it won’t be safe. I suggest you talk to your OR’s office and they should confirm this.
sheridan crew says
I was made bankrupt in 2001 when i lost my job.
I enquired about cashing in my pension currently £7,700.00 to clear existing debt.
I was asked out the blue whether I had ever been bankcrupt. (Apparently this was on their system)
The person on the phone from Zurich was unable to provide me with any other information.
Could you give me an indication whether my pension (originally with Allied Dumbar) started in 1989 is safe if taken either as a lump sum or if transferred to a more current pension ?
I have not paid into this pension for many years.
Sara (Debt Camel) says
Bankrupt in 2001 then I wouldn’t expect you to have a problem. But talk to your Official Receiver and get this confirmed!
Anthony Blythe says
I went bankrupt in February 2001 & they took my private pension, I am now retired & the pension company has written to me saying when do I want it, having rang them they said there was no charge on the pension, But when they sent me the forms it says, I’ve never been bankrupt which is not the case, I know the law changed around 2000 ? Do you think there is any chance I can get my money.
Sara (Debt Camel) says
Given that you think your private pension was taken in 2001, I am reluctant to guess. Contact your Official Receiver and ask.
Jonathan Owen says
My father (at the age of 50) went bankrupt in 1996. He was told that he had to declare his private pensions, for which he did. My father had four private pension, and is now wondering if he is entitled to any of that money back. My question therefore is: is it possible for my father to reclaim any of his private pensions back that were taken from him during bankruptcy?
Sara (Debt Camel) says
I am not aware that he can reclaim anything.
Trevor povey says
! Was made bankrupt august 1999 I had 2 pension policies all within 18 months of each other and never paid anything into them after being made bankrupt the receiver had them off me
and now I’ve received statements on there worth. I rang the pension company and they said there was a notice on them and couldn’t say whether I would receive any of the funds that they are worth. What does that notice mean??
Sara (Debt Camel) says
See CAse (2) in the article above.
Fiona says
Hi I went bankrupt in August 2008 until January 2009 the OR took my private pensions from me and then returned them saying they didn’t need them. I am now reaching 55 in September and would like to take the lump sums as this would reduce our mortgage but I’m concerned if I claim them the my trustee will claim the amounts. Is it safe?
Sara (Debt Camel) says
It’s hard for me to be sure and pointless for me to guess… you need to talk to your official receiver.
I would also say that unless you have an interest only mortgage finishing soon, it will often be a very poor financial decision to take a pension early when you are still working…
darren waddington says
Hi,
I am confused on this.
Does the period August 2008 discharged Jan 2009 not come under case 3.
Why would this be any different to the other questions above.
Sara (Debt Camel) says
On the face of it, it should indeed come under case 3. But I was concerned about the phrase “the OR took my private pensions from me and then returned them saying they didn’t need them” phrase. This could be poor wording, or there could be something odd going on, or the dates may be incorrect. I don’t like making guesses so I suggested she asked the OR.
Fiona says
Hi I contacted the OR he said that they didn’t have any interest in my pension and would put it in writing and inform the pension company xx
Julie says
Hi, I am considering applying for bankruptcy but I have paid into the NHS pension scheme all my working life which I have not yet drawn as I am 56 and still working full-time. In order to receive my pension I would have to retire which I cannot afford to do. If I go bankrupt, will there be any implications for my NHS pension?
Sara (Debt Camel) says
No. You can’t be made to draw your pension early. And the pension itself can’t be taken. Obviously I don’t know if bankruptcy is a good idea for you – have you spoken to a debt adviser? – but your pension shouldn’t be an issue if you do.
Julie says
I am struggling to find a debt adviser who can help – do you have any recommendations please?
Sara (Debt Camel) says
Yes! It depends on where you live, what sort of debts you have and whether you would like advice face to face or by phone, see https://debtcamel.co.uk/more-information/where-to-get-help/.
Tina petts says
My husband was made bankrupt in 1998 He is now coming up to 55 so thinking of taking his pension out but they have said official receivers sent a letter to them on august 2014 so he can’t claim his pension is this correct
Sara (Debt Camel) says
As his bankruptcy is pre 2000 it may well be correct. he should ask for another copy of the letter.
kp says
My husband was made bankrupt in 1990 and stopped paying into his Abbey Life private pension at the time. Abbey Life informed him last year that there was a small pot of £6,000 that could be drawn now. The official Receiver have said they have an interest in it and since then Gowlingplc have been constantly writing asking him to sign forms to sign it over. He has been quite ill for a while and has Bowel Cancer. Can we stop this?
Sara (Debt Camel) says
I am sorry but I can’t say anything about this. I suggest you go to your local Citizens Advice and they may be able to help.
W Blue says
Hiya, I have an income of just over £1,000 per month. This is from a pension that was paid early for medical reasons. (Medical retirement).
If I am made bankrupt can a payment order be made against a medical pension? I have no other income.
Sara (Debt Camel) says
A medical pension is just income – a payment order can be made against it but it depends on what your expenses are. 7 out of 8 people going bankrupt don’t pay any monthly amounts. If you post details on this forum https://forums.moneysavingexpert.com/forumdisplay.php?f=136 there are experts there who do a pretty good job of guessing whether you would have to make any payments and if so how much.
W Blue says
Thanks Sara, I will file the link as I might need it in the next few weeks.
Keith says
I am currently completing bankruptcy application. I will be 55 in 16 months, will my defined benefit pension be safe?
Sara (Debt Camel) says
If you go bankrupt before you are 55 then ANY pension is safe. If you leave until after you are 55, then a DB pension will be safe (assuming you don’t draw it of course!)
Lisa says
Hi Sara I declared myself bankrupt in 2010 I had. 20k belonging to my mum in my bank account so I withdrew it before going bankrupt I was 51 at the time and was off work long time sick when I applied for bankruptcy I also had a pension I could withdraw when I was 55 either a lump sum of 25k or wait and have it paid as a monthly pension the receiver did not question the 20k I withdrew as it was my mums in my bank account also the receiver did not say anything about my 25k pension have they made a mistake and overlooked this or is it ok as am worrying now because why would they allow you to have this money to look forward too and let you go bankrupt owing 25k to creditors I hope you could reply asap thank you Sara.
Sara (Debt Camel) says
Your mum’s money – I am a bit surprised the OR didn’t ask about this – but if you had been asked you could have explained what had happened and as it was your mum’s money that would not have been a problem.
Your pension – in 2010 and aged 51 it was irrelevant what was in your pension. It could not have been claimed by the OR.
If you are just worrying now, I don’t see any reason to. Unless you have received a letter from the OR about one of these issues, I think you can forget them.
Glyn Hughes says
Hi, I was made bankrupt in may 2010. Just had correspondence re serps pension and a lump sum pre tax of 18, 000. Have received a letter today asking for details of my bankruptcy. Can they withhold this lump sum? .many thanks.
Sara (Debt Camel) says
No, the lump sum and the rest of your pension should be safe.
martin chandler says
Hi
I was declared bankrupt in 1999 and discharged 3 years later. I have a pension pot of £14,000 available now however have been told the receiver may want it all or part of. Is my wife also entitled to claim half of this. Is there a ruling on small amounts?
Sara (Debt Camel) says
I’m sorry but I dont know much about pre 2000 bankruptcies.
Louise says
Hi I was declared bankrupt in sept 2017. I have since been retired from my work due to ill health and have access to my pension even tho i am under 55. I will not be discharged until sept this year do I have to notify the OR that I have access to my pension but I do not plan to take any lump sum? I would only be withdrawing the whole pot as an annuity is not a worthwhile option due to my age. I would like to with draw my lump sum when discharged (I am aware of the large tax). Would this be possible?
I’m unsure if the law is different in Scotland. I contacted the AIB who said any lump sum is classed as a windfall and the trustees can take it up to 4 years after discharge. Until the trustees are discharged which can be 3-4 years after I receive discharge.
Sara (Debt Camel) says
I have no idea what the situation is as you are in Scotland. You need to talk to a Scottish advisor.
Dan Moran says
Hi Sarah. My house is in the process of being repossessed and there will be a shortfall of at least £50000 which I can’t afford to pay back. I am considering making myself bankrupt. I am 59 years old and was hopping my go take my final salary pension in Dec 2018. Will going bankrupt and his year affect my pensions on if I retire in Dec 2018.
Kindest Regards
Dan
Sara (Debt Camel) says
Going bankrupt to get rid of a huge mortgage shortfall is very often the best course of action, but I always suggest people should take debt advice before bankruptcy – talk to National Debtline 0808 808 4000. I’m not sure if you are aware, but you don’t have to wait until after your house is repossessed to go bankrupt.
If your final salary pension will include a tax-free lump sum, and you get that during the year after going bankrupt, before you are discharged, then it will all go to the Official Receiver. This is Case 4 in the article above.
It would probably be much better to wait and draw your pension later. National Debtline can answer any detailed queries you have about what your options are.
Dale says
Hi Sara I am 58 and on an order suspending my bankruptcy indefinitely due to non fulfilment of conditions due to my personal implications in 2005. I have had nothing communication wise from the OR for 12 years and now employed on minimum wage on minimum hours and have been for 9 Years. I do have undivulged private pensions paid into up to 2004 and wondered if you knew if the OR could still put a claim on these if I tried to draw money shortly. Thankyou.
Sara (Debt Camel) says
I am sorry but you need advice on your situation. I suggest you talk to Citizens Advice or National Debtline.
steven ponsford says
Hi Sara, I am currently Bankrupt and due for discharge on 5th december this year.
I am 45 years old and have pensions SIPPs that the bankruptcy was not interested in, i have a question i was transfering my Aegon pension into another SIPP and they said they need the Insolvency service to agree it first- am i allowed to do this as i cannot take or benefit from this for 10 more years at least. I am assuming transfers are ok during bankruptcy.
Sara (Debt Camel) says
I don’t think the Insolvency Service will have any interest in you switching pension providers, but there is little point in arguing with the pension firm about this. If they have to tick a box saying the IS doesn’t mind then that is what they have to do.
Steve says
Hi Sara,
Sincere thanks for a really helpful and excellent website.
I am considering going bankrupt with debts of app. £70K, no assets except for undrawn pension funds of app. £77K. I am 63.
Am assuming the adjudicator would take into account tax due of app. £20K and not decline my bankruptcy through the insolvency check.
Sara, could you please let me know if you think i am right ?
Thank you Sara,
Steve
Sara (Debt Camel) says
Well the adjudicator should take tax into account but that seems a bit close for comfort. I suggest you talk to National Debtline about your situation so they can give you a better-informed opinion looking at all the details of your case.
Karen says
Hi – my husband was also made bankrupt 30 years ago and now trying to cash in his personal pension of around £30,000 but been told the official receiver has to get it – I don’t understand why on here some people seem to be told they are fine and the official receiver can’t touch their pension, but others aren’t sure? What are the rules?
Thanks – Karen
Sara (Debt Camel) says
The article above explains that the rules have changed over time, and what matters is what the rules were when your husband went bankrupt.
John Boland says
Hi Sara I went bankrupted in Feb 2014 and paid into insolvency for 3 years we have now been discharged .i have a pension and want to draw 25% lump sum i got my paperwork from my pension firm and on it it’s asking if I’ve ever been bankrupted? can the receivers still take it if I’ve been discharged
Sara (Debt Camel) says
No they can’t. If you are worried, talk to your OR.
David says
Good afternoon Sara
I was made bankrupt in 2014 and discharged in Sept 2015,with no provisions on my discharge .
Im due to draw down a quarter lump sum of approx 18,000 in July and a monthly payment , when I turn 55 ,can the official receiver claim this ? ,I have just had a PPI claim given to them but I understand they come under different rules and have just accepted the fact .
But I was wondering about my pension ,I think I come under case 3 but would appreciate an acknowledgement of this.
Thank you
Dave
Sara (Debt Camel) says
It sounds like case 3. Are you paying an IPA?
David says
No Nothing at all ,not even when i was in bankruptcy just went to court house was surrendered to mortgage company and we went our separate ways .
Sara (Debt Camel) says
Then you can’t now have an IPA imposed. Sounds like you will be fine to take the pension – if you call the Insolvency Enquiry line they will probably confirm this for you: https://www.gov.uk/the-insolvency-service.
Sandra Wellings says
Can I ask please
My husband was bankrupt in 1997 and released in 2000.
He passed away in 2016 and I am having trouble getting his pension as the trustees are holding onto it.
Is this right or should that money be released to his family now he is gone
Sara (Debt Camel) says
It may be that you won’t be entitled to any of this. But this has been quite a long while and you should have been given some clear information by the trustee by now. I suggest writing them a letter and asking whether there has been a decision.
David says
Hi I went bankrupt in 1995 and was discharged in 1998. I reached state pension age in 2017 when 2 pensions came to light (which I didn’t know about) I took a small pot and have kept some in, no concern about my bankruptcy when I filled the release form in, the other from the Prudential which was for £1,000 was taking forever to pay out(ongoing from Aug last year when I was 65) they wouldn’t even speak to me, now a letter has arrived from a company acting on behalf of the Insolvency asking to confirm it’s me with my national ins number and any other pensions I have. Can they only take a pension that was to do with my bankruptcy or will I have to pay back what I’ve had since 65, Also at 55 I took a monthly annuity of £68 from a pension I knew about. The other 2 pension plans as I said didn’t seem concerned about the bankruptcy I even sent the a photocopy of the discharge so why is the Prudential (also the lowest one) saying I cannot have it and asking about other pensions I have. ??
Sara (Debt Camel) says
I am sorry but this comes under Case (2) in the article above. You need to give the “company asking on behalf of the Insolvency” the information they have asked for. If they come back and say something you consider is unreasonable, go to your local Citizens Advice and ask for their help with this.
David says
What would happen if I said I wanted to leave it and not take it?
Sara (Debt Camel) says
Now the Insolvency Service is aware there is at least one pension, I don’t think that would make any difference.
David says
Thank you. Really worried now as I have been getting the small pension annuity since I was 55 and my other pension that came to light last year I have took some and spent it on the house which I desperately needed. Would I have to pay it back I wish they had never paid it out, they were not concerned with my bankruptcy when I answered the question on paper.
Sara (Debt Camel) says
I understand why this is worrying. Also that you correctly answered questions from the previous pension provider. But all you can do now is carrying on being straightforward and answer the new questions you have been asked – then seek advice if the OR/trustee in bankruptcy comes back to you and says something you think is unfair.
su says
Hi,
Does the ‘insolvency test’ mean that the whole debt could be cleared by the pension fund. That is, the pension fund exceeds the amount of debt?
Thank you
S
Sara (Debt Camel) says
As the article above says, the test isn’t spelled out very clearly but it should also take into account extra tax you would have to pay by taking the money out early.
For many people this is clear cut – if your debts are 70k and your only defined benefit pension is £25k then the pension isn’t enough and so you can go bankrupt. Swap the numbers around and have a pension of 70k and debts of 25k then you would fail the insolvency test.
If you think it isn’t clear cut, you need to talk through your situation with a debt adviser.
Dee says
Thank you so much Sara for all this invaluable information.
I am eligible to claim my (small) teachers final salary pension when I am 60 in 14 months time. I am thinking of applying for bankruptcy now. I have been advised to seek specific advice but can’t find a published answer and appointments at pension advice sites are booked months in advance. My pension lump sum is nowhere near sufficient to pay off my debts. Is my lump sum at risk if I am discharged before I turn 60? Is my lump sum at risk if I am still undischarged when I turn 60?
I really would appreciate some guidance here.
Sara (Debt Camel) says
Do you have to take your pension at 60 or do you have an option to defer it? Do you have an option not to take a lump sum but to take a larger pension instead?
Ignoring the pension aspect, have you taken advice about whether bankruptcy is a suitable option for you?
Kate says
Hi. My husband and I declared ourselves bankrupt in 1992 discharged 3 years later. He has now found out that he took out a pension in 1988. He can’t remember doing this, and only paid into it for a few months. He had a letter saying that he was now due £2500 as he has reached 75 years of age. The pension holders asked if we had ever been made bankrupt and we said yes. Now it seems our creditors are now entitled to this money.
Is this right? I see somewhere on your site that you said ‘after discharge you don’t have to tell OR about assets or money you receive, unless you were already entitled to these before discharge. ‘ now as my husband was not entitled to this before discharge and not until he was 75, surely the creditors have no claim. Totally confused. Hope I haven’t confused you.
Sara (Debt Camel) says
It sounds as though you and your husband may both be in Case 2 in the above article.
The reference to what you have to tell the OR after discharge applies to people who went bankrupt after 2000.
Ian k Cracknell says
I was made bankrupt in 1994 for director guarantees I gave before that date. My personal pension matured in 2018 at age 75, the HMRC taxed 75% and the balance was transferred to the Official receivers Solicitors. They have taken £5333 from the pot and passed the balance to the OR, the OR have now settled 100p in £ to my 7 creditors and awarded them an extortionate 8% per annum interest for 25 years in addition to their settlement figure and left me with nothing in my pension. Had I been made bankrupt after May 2000 or it had been ‘occupational’ my pension would have been safe, spread the word please this is so unreasonable.
Sara (Debt Camel) says
Unfortunately what they did was correct. I understand why it feels unfair, but in 1994 those were the rules.
Chris says
Hi
I went bankrupt in July 2018, was discharged in July 2019 but I have an IPA which ends in November 2021. I can retire at 48yrs and 11months in February 2020 and draw down a lump sum from my pension. Your article suggests the OR cannot touch this lump sum even with an IPA but I have conflicting information from the OR case worker who states they can claim a percentage as part of the IPA. Can you clarify the position please?
Sara (Debt Camel) says
Has the OR case worker put this in writing?
Chris says
Hi, thanks for replying, this is what the Insolvency Examiner sent me;
Please note the following in relation to the OR’s position regarding IPA/O (Income Payments Agreement/Order) and Pensions.
· An IPA lasts for 36 months (36 payments) and can be varied at any time to reflect any change in your income and/or expenditure. The OR must be notified of any increase of income during the period of the IPA/O.
· Where there is an IPA/O in place the OR would look to claim a single payment from any lump sum received, the amount depends on the number of months remaining on the IPA/O
o 24-36 months remaining – 75% of the lump sum
o 12-24 months remaining – 50% of the lump sum
o 1-12 months remaining – 25% of the lump sum
Any advice would be appreciated.
Sara (Debt Camel) says
That’s news to me. I will make some enquires. If that is now the base position, I will be updating the article above.
Sara (Debt Camel) says
That advice about percentages is correct. I have updated the article above to reflect it.
You may need to reconsider your pension options. Delay taking it until your IPS has ended? Can you commute the lump sum, taking less or no lump sum and higher monthly payments? Sometimes commutation rates can be very good.
Brian says
I have bankrupt April 1995 and discharged 3 years later. I was not made aware that my pension had been ring-fenced by The Official Receiver. It is only now that a solicitor, employed by The OR, has popped up and is claiming the non-protected rights. I have now seen copies of letters between the OR and pension provider over the years and my pension provider was asked to close my pension. I was unaware of this and continued to make payments into it.
18 months of arguing and I still cannot get confirmation if the non-protected rights part figure at the date of bankruptcy in 1995 is the amount the OR is due, or whether they want the interest accrued on that figure too?
Sara (Debt Camel) says
At a guess, they are due the interest on the non protected rights part.
Trebor says
Hi
My father has passed away recently and going through his paperwork found a company working on behalf of the Insolvency Service who had contacted dad. He held policies at the time of the bankrupt in 1990. They are saying that he was not entitled to claim the polices and this must be done by the official receivers. I have called the company and they’ve not been very helpful, thus referring me back to the Insolvency Service, who then referred me back to them. The amount is substantial, how do I find out how much my father owed and would anything be left, as he left no provisions after death.
Thanks
Sara (Debt Camel) says
Can you give an indication of how much “substantial “ is? You have no idea what your fathers debts were going into bankruptcy?
Trebor says
Hi
£47k in the pension
in 1989 county court judgement debt for £8414, bankruptcy order October 1990
I’ve just found the legal company who is dealing with the case on behalf of the insolvency service to be very difficult in telling me what the next stages are, they wouldnt even acknowledge the information I sent them by post. Would it be worth rattling off a letter to the regulator about them. The legal professional was most difficult on the phone seeing as I’ve just lost my father and looking to sort his affairs.
Thank you
Sara (Debt Camel) says
Did your dad have any other debts when he was made bankrupt?
Has “the Legal company“ been appointed as the Trustee in Bankruptcy?
I suggest you send them a formal written complaint. With the word Complaint in capitals at the top of your letter or email. Say you are dealing with your late father’s affairs and need to know the following information… and if it is not yet known, you would like a description of the process and timescale to obtain that information. And say you have previously asked for an acknowledgement of x,y and z which you sent to them on dd/mm/yy but yiu have not been sent this.
Trebor says
Hi Sara
Thank you for all your help, they’ve now written to say they felt a response was required, but I do not have authority to deal with my late fathers affairs and I need to obtain probate!
None of this was mentioned on the phone the other day, are they just using this because they are being difficult? Everything else has been dealt without hassle so far, banks, council and other accounts.
T
Sara (Debt Camel) says
I suggest you reply that as your father’s next of kin, you will be happy to apply for probate but in order to do this you need an estimate of the value of the estate. As your father left few assets, the amount of his pension that could be returned to the estate may be the largest asset in the estate which is why you need them to supply you with the figures you have asked for.
Trebor says
Hi Sara
Finally the pension company have confirmed that a payment has been made to the the bank account of the legal company who handles the work for the insolvency company. However there is a tax deduction of 45% (tax charge on the statement), which is £21k.
Is this right?
T
Sara (Debt Camel) says
I don’t know what tax should be charged. It is possible this is just an emergency tax rate, see https://adviser.royallondon.com/technical-central/pensions/case-studies/emergency-rate-income-tax/, and you can reclaim it back from HMRC. But that may be completely wrong.
Trebor says
Thank you, I’ve since read that “if you die over the age of 75 and leave a pension pot to your heirs, they simply pay normal income tax on money they take out of the pot. If you die under the age of 75 the money passes on tax free”
https://www.thisismoney.co.uk/money/pensions/article-5297675/Do-pay-tax-inherit-pension.html
Stephen says
Good morning,
I was made bankrupt November 1999 and sold my house and gave the Ip all of the money to sort out my debt, this was done and I received back what was left and also a discharge letter. Now I have applied for a small pension and the OR is looking into my old case. As I have paid everything why do I have to pay a percentage of my lump sum and also for publication in London papers. No records can found at the court and I think this unfair to have to pay out again.
Many tanks Steve
Sara (Debt Camel) says
So all your debts and the IP fees were paid in full?
Steve says
Yes everyone was paid and I received what was left over
Sara (Debt Camel) says
In that case I can’t see how they can have any claim on your pension.
Steve says
The problem is they have no record on file about the outcome on my case and have appointed an IP to check and contact all the people who claimed from me. The real issue is why I have to dig up the past my pay to get my pension
Sara (Debt Camel) says
Do you have any correspondence from that time? Bank statements showing payment back from OR/Trustee?
Of course a plausible reason why they have no records is that – as you say – your case was closed as fully paid.
Steve says
I have no documents to show that any money was paid to me. Surely it’s a requiment in law to keep records. So if you believe they can’t take my pension what action should I take with them because I can put up with them going through the motion but no paying any monies for it.
Sara (Debt Camel) says
If you don’t have any old correspondence about your bankruptcy or bank statements or anything, then I am not sure there is much alternative to waiting a few months for no creditors to come forward. How long has it been so far?
Steve says
Hi, I first applied for my pension at the beginning of July this year, the OR has appointed an IP to write to everyone again and to report back to them. I spoke to them today and have been told it could take another 6 months providing no one puts in a claim. The OR charges 366 plus vat and the IP take 7%. I am frustrated as I don’t know how to make them believe me.
Sara (Debt Camel) says
So the OR has a record of your bankruptcy because they know the creditors in it?
Do you have any record of your house being sold? Was it by you? Do you remember the solicitor who handled the sale?
Steve says
I do have the case no and date
Steve says
It was so long ago now, I sold my house in the following May and I moved abroad for 3 years. The OR has list of creditors but say they don’t have final account, also the IP I was assigned to has ceased trading.
Sara (Debt Camel) says
I know it’s a long time ago. but producing some evidence seems like the best way to back up what you are saying.
Does the OR have a record of your house being sold?
Steve says
Not sure I’ll ring and ask tomorrow. Is their anywhere I can complain to about having to go through it all again and more so paying because this can’t legal
S.R says
Hello Sara,
I was made Bankrupt in 2016, June, and am in my third year of an IPA. I believe I was was given incorrect feed back in my last interview with the OR, as i believed that i was not responsible, for paying Tax for the duration of my Bankruptcy, which i took to be the period of my IPA. I did ask specific questions about tax in the last conversation i had with the OR and my understanding of my situation was confirmed back to to me. I have since been made aware that i am indeed responsible for paying at least two years Tax and fines for late payment. I do realise that i will have to take responsibility for this despite feeling that i was not well counselled.
The only way i can pay the bill, is to release my work place pension which i am now able to do, being 55. I know my pension provider will take a fee, and i know that i will be taxed at source for the pension pot. I have already taken my Tax free amount before the Bankruptcy. I have informed the O.Rs office of my intentions, as i want to know what their stake in the pension pot will be. They have come back to me with a figure of 50%. I am in the last months of my IPA, and in case 3 above, you suggest that in the last 12 months they should only be asking for 25%.
Is it worth challenging them on this? I am keen to hold on to as much of the pension pot as i can, as even when i have paid the revenue there will be further taxation ahead. Is it worth pursuing a deal with the OR at all?
Sara (Debt Camel) says
when does your IPA end?
SR says
Hello,
I think my IPA ends in May 2020 as i have missed two months of payments due to these tax difficulties. So that date should include the missing payments.
Sara (Debt Camel) says
The “income” and “expenses” that the OR has been using to calculate your IPA. Did they take account of the tax you have to pay? If not, you need to ask the OR to recalculate your IPA as you have paid too much.
Do you have an accountant?