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This is my first post but I have been busy trying to read through various threads to try and get as much information as I can.

 

My husband who is 56 years old is considering bankruptcy as an option. His only income is Incapacity Benefit and it is very unlikely that he will be able to return to work as he has health problems.

 

I am disabled and w/c bound as I have primary progressive multiple schlerosis. My job is at risk due to organisational charge and the team being moved to another part of the county. I am not well enough to cope with the daily travelling involved. This is another reason why my husband is considering his options now because if I lose my job then our only income will be whatever benefits we are entitled to.

 

The only assets my husband has are our car and a small pension from the Prison Service due when he is 60 years old. The pension is only for 14 1/2 years as it was frozen when he left the service. We live in a 2 bedroom privately rented flat. All of our essential bills are paid by direct debit/standing order from my account.

 

Our concern with the car is that as I am disabled and with my husband's health problems we do need transport. I do not drive and our car tax is paid by the DWP as my husband is my nominated driver. The car insurance is paid from my account. The car is an R reg and not worth much moneywise but is our lifeline. We could get a car through mobility but we do not want to use that option until this car falls apart.

 

None of my husband's debts are behind in payments but will be in a couple of months time so he wants to get things sorted sooner rather than have to deal with debt collectors, numerous calls + letters, especially as one of his cards is with MBNA. I have been following some of the threads and with my disability I need to keep away from stress as much as possible.

 

My husband is going to arrange an appointment with our local CAB to see what options they can come up with but any other advice would be most gratefully received.

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If you've paid everything up-to-date then it's unlikely you will be allowed to be made bankrupt. But stranger things have happened.

 

Your car is now of so little value that it is unlikely the OR will be interested.

The pension is another matter, and you will find the OR may want to take this when it becomes payable to help pay off the creditors.

 

If you want to go bankrupt you will need to do a lot of reading and investigation because the judge will specifically ask if you have taken professional advice.

You have said you will be talking to the CAB. You could also talk to the National Debtline - National Debtline, for FREE CONFIDENTIAL and INDEPENDENT ADVICE call 0808 808 4000

Other places to look at on the internet are the Government's Insolvency Service The Insolvency Service Website and the Consumer Credit Counselling Service CCCS - Free Debt Advice from the UK's Leading Debt Charity.

 

Being bankrupt is a very serious business and you must give this some serious thought. There are several people about here who can give you their personal experiences if/when you have any questions.

I really do appreciate all those 'thank you' emails - I'm glad I've been able to help. Apologies if I haven't acknowledged all of them.

You can also ding my gong if you prefer. :)

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Thank you very much for your advice.

 

I will be looking up as much information as I can on this site. With my husband not working we now have no savings hence the worry of getting behind with payments but will have to see how things go in the mean time.

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If you do decide to go bankrupt then you should stop paying all your bills (other than utility bills) straight away.

First of all you will need some money to pay for the bankruptcy petition, and secondly any outstanding debts are of course included in the bankruptcy.

I really do appreciate all those 'thank you' emails - I'm glad I've been able to help. Apologies if I haven't acknowledged all of them.

You can also ding my gong if you prefer. :)

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I was under the impression that his previous work pension which is frozen until he is 60 years would be affected. He is due a lump sum of approx £13,000 and approx £270 per month.

 

I would estimate approx £30,000.

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No - by the time the pension is due you will be discharged. The OR will only be interested in your current income. if it was a private pension that you had put 000's in to hide then it would be different, but company pensions are not usually affected.

Consumer Health Forums - where you can discuss any health or relationship matters.

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Hi Scanjet:

 

None of my husband's debts are behind in payments but will be in a couple of months time so he wants to get things sorted sooner rather than have to deal with debt collectors, numerous calls + letters, especially as one of his cards is with MBNA. I have been following some of the threads and with my disability I need to keep away from stress as much as possible.
It may be worth looking at the debts and depending how much they total, you could consider trying to make a minimum payment by way of a family arrangement. You would need to make an income and expenditure sheet to accompany your offer. Are the debts still with the original lenders?

 

It is not so difficult to prevent the calls and harassment. A simple letter stating, I will only communicate with you in writing etc which, you can find here would suffice.

Donate to keep this site open

 

Any help or advice is offered as just that, help and advice without any liability. If in doubt consult a legal expert or CAB.

 

Make Cash Flow Forecast

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Hi Scanjet:

 

It may be worth looking at the debts and depending how much they total, you could consider trying to make a minimum payment by way of a family arrangement. You would need to make an income and expenditure sheet to accompany your offer. Are the debts still with the original lenders?

 

It is not so difficult to prevent the calls and harassment. A simple letter stating, I will only communicate with you in writing etc which, you can find here would suffice.

 

Hi Nevos,

 

Thank you for your help and advice.

 

We are going to sit down and work out a plan of action. We did think of initially offering an amount we can afford but don't want to be paying out for years and years with the debt not shrinking. If I lose my job and we are living on benefits then we are going to struggle with paying the essential bills let alone what the creditors would expect.

 

We don't tend to answer the phone and only pick up on numbers we know.

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Hi Scanjet: Yes, you need to consider it all. Bankruptcy is a big step. The downside of a long term arrangement is the pension in 4 years or so. Having said that, it very much depends on the total debts also, if there is a property involved. In which case your husbands half share would go in to the pot. The OR would usually give around 12 months to sort that bit out. Good Luck.

Donate to keep this site open

 

Any help or advice is offered as just that, help and advice without any liability. If in doubt consult a legal expert or CAB.

 

Make Cash Flow Forecast

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Hi Scanjet: Yes, you need to consider it all. Bankruptcy is a big step. The downside of a long term arrangement is the pension in 4 years or so. Having said that, it very much depends on the total debts also, if there is a property involved. In which case your husbands half share would go in to the pot. The OR would usually give around 12 months to sort that bit out. Good Luck.

 

Hi Nevos,

 

Yes, it is a lot to think about. We also need to take into account that I am disabled and my husband isn't in good health. We live in private rented accommodation so we do not have any property to worry about.

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No - by the time the pension is due you will be discharged. The OR will only be interested in your current income. if it was a private pension that you had put 000's in to hide then it would be different, but company pensions are not usually affected.

 

The OR can ask you to take the pension early in order to get his hands on the tax-free cash payment which you are entitled to take.

Hence you need to check out the small print of the pension scheme to find out if there is an early redemption option. If there isn't you are in the clear.

I really do appreciate all those 'thank you' emails - I'm glad I've been able to help. Apologies if I haven't acknowledged all of them.

You can also ding my gong if you prefer. :)

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The OR can ask you to take the pension early in order to get his hands on the tax-free cash payment which you are entitled to take.

Hence you need to check out the small print of the pension scheme to find out if there is an early redemption option. If there isn't you are in the clear.

 

Hi Palomino,

 

Thank you - I will ask my hubby to find the paperwork. We hadn't thought about drawing it earlier as the lump sum and monthly payments aren't vast amounts.

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Most pensions cannot now be claimed by the OR/trustee.

 

See: What will happen to my pension?

 

Following the introduction of the Welfare Reform and Pensions Act 1999, where a bankruptcy order was made on a bankruptcy petition which was presented on or after 29 May 2000 all pension schemes which have been approved by HM Revenue and Customs do not form part of a bankrupt's estate and therefore cannot be claimed by the trustee in bankruptcy.

Also......

 

The OR can ask you to take the pension early in order to get his hands on the tax-free cash payment which you are entitled to take.

Hence you need to check out the small print of the pension scheme to find out if there is an early redemption option. If there isn't you are in the clear.

 

I didn't think that was the case? :-?

 

In fact.....

 

Personal Pensions.Bankruptcy Petition Post 29 May 2000

 

OR has no influence on timing or amount of pension payments

 

Often an occupational pension scheme or a personal pension policy will contain an option that the pension can be drawn when the individual is aged between 50 and 75. (A retirement annuity contract will not come into payment until the individual is 60 years old.) It is also common for pensions to include an option on drawing a lump sum and annuity or just an annuity. The lump sum may be up to 25% of the pension fund available at the date when the pension comes into payment - see also paragraph 61.19 (f)

 

Where the pension is an approved pension arrangement and does not vest in the trustee, the trustee cannot influence the bankrupt in exercising any options under the pension arrangement.

Edited by fermi

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It seems I'm out of date.

As fermi says your pension won't be considered.

I really do appreciate all those 'thank you' emails - I'm glad I've been able to help. Apologies if I haven't acknowledged all of them.

You can also ding my gong if you prefer. :)

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