This article looks at the public policy implications of the current high bankruptcy fees in England, Wales and Northern Ireland: £680 (£659 in Northern Ireland) is a big obstacle to fairness at the moment, causing people stress and sometimes leading them to make poor choices between debt solutions. If you want to go bankrupt and can't afford the fees, this is not the right article for you. … [Read more...]
Articles about Bankruptcy
This page lists all Debt Camel's articles about Bankruptcy in date order.
If you are thinking about going bankrupt, or are already bankrupt and have a problem, start by reading Debt Camel's Guide to Bankruptcy. That looks at how to decide if bankruptcy is right for you by providing you with the information you need. It also looks at the process of going bankrupt and what can happen when you are bankrupt. From "will I lose my house" to "how can I repair my credit record after bankruptcy" it covers all the common questions people have.
Tax debts – should I go for an IVA or bankruptcy?
A reader asked: I'm thinking about an IVA. I've got 8k of credit card debt and overdrafts but I owe a lot of income tax and VAT. Probably a lot over 20k but I haven't filled out any tax returns for years. Do I have to get the exact tax owed when applying for an IVA? I don't think I can cope with all that. I was self employed but I now have a job, not well paid. I'm now living with my parents … [Read more...]
Inheriting money when in a DMP, DRO, IVA or bankruptcy
What happens if you inherit money when you are in debt management or one of the three forms of insolvency: Debt Relief Order (DRO), bankruptcy or IVA? The answers are surprisingly different... Inheriting in a DMP This is the easiest case. Any money you inherit comes to you, not to your creditors or your DMP firm. It doesn't matter if the person dies before your DMP started or during your … [Read more...]
You both have debts – but may need different debt solutions
It is common where a couple both have debts for a interlocking IVAs to be proposed. The couple may think of this as being a joint IVA but legally it is two separate IVA agreements with a single budget - income and expenditure - and a single monthly payment being made. That may work well, but it's important to look at each person as an individual as well. There is no reason why both partners … [Read more...]
Can I spend backdated benefits money before going bankrupt?
A reader asked: I’ve just received a backdated Severe Disability Premium (ESA top up as on PIP too) and I am aiming to go bankrupt in May or June. I’ve been advised by a money advisor to use this money for essentials as I have just been given permanent accommodation having been homeless. No furniture came with the flat. I’ve been paying £1 a month to my creditors since last year. Should I … [Read more...]
Insolvency numbers up – but rising debt isn’t the main cause
On 27 January the Insolvency Service published the data on insolvency in 2016. The number of people who became insolvent in England and Wales last year was 90,930. As the graph above shows, this has reversed the trend of personal insolvency numbers falling every year: the total for 2016 is over 13% higher than in 2015, the first time there has been a rise since 2009. Bank of England statistics … [Read more...]
Joint debts – what happens in an IVA / DRO / bankruptcy
A reader asked: I have received a letter saying we still owe £4,000 in council tax. The debt was included in my bankruptcy a few months ago but they are chasing my wife for the full amount, what should we do? This article looks at what happens to joint debts which are unsecured, not mortgages or secured loans. It covers all three forms of insolvency - bankruptcy, DROs and IVAs - because the … [Read more...]
Pensions safe in bankruptcy after Appeal Court decision
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...]
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 … [Read more...]
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