Disability benefits and bankruptcy - help please

[robbond55]

Hi there.

A few years ago my wife and I were both working full time earning a decent joint income and had, as many people do accumulated debts of approx £18000 (this was pre MSE days of course!) but was happily managing to pay these loans off and had it not been for circumstances they would have all been paid, or nearly paid off in full by now.

However, circumstances changed in 2004 when I was diagnosed with Multiple Sclerosis and to cut a long story short I had changed jobs because of it, reduced my hours and finally left work in October 2008 due to my health. All this time my payments to the two loans and one credit card reduced whilst being under a debt management plan with the CCCS.

All the household income is now due to disability benefits - my wife is my now my full time carer in receipt of carers allowance. We live in private rented accomodation and our car is a Motability vehicle.

I have been advised by CCCS that bankruptcy may be the best option - after paying my creditors I am left with around £25 per month disposable income after all other costs have been taken into consideration.

The only assets we have are general domestic ones - PC, TV (26 inch LCD) sons 14tv/dvd combo, cd's and DVD'd (approx 200 of each) and HI FI system. All of these are the lower end of the market and was wondering about any implications to these and on anything else if I were to take the bankruptcy route.

I cannot see any other route as at the current rate of repayment that I can afford it will take around 80 years to pay these debts off so any advice would be welcome.

[loobyloo85]

Hi, yes bankruptcy is an option available to you. If you are on benefits and have no disposable income, your bankruptcy should take up to 12 months, and then your debts will be cleared in full.

As you rent and have no assets of a high value, you would not lose anything by going bankrupt. You may want to check your tenancy agreement to ensure your home is not at risk in bankruptcy. It will cost £600 to make yourself bankrupt, but if you are on benefits you can claim £150 back from this. You would also need to take into account, that bankruptcy does carry a stigma so can affect future credit etc.

 

I hope this helps, all the best x

[robbond55]

Many thanks for that - I have made up my mind and am going to take the plunge.

Thanks for the support!

[palomino]

What benefits are you receiving? You may be be exempt from the court fees portion of the bankruptcy hearing (you still have to pay the Official Receiver's portion though).

Unfortunately DLA isn't one of the benefits that entitle you to the remission of court fees.

 

If you do decide to petition for you own bankruptcy then you should take independent advice from someone like a solicitor, the CAB National Debtline or CCCS. You should also read a lot of the information (there is a lot to read!) on the government's insolvency website - http://www.insolvency.gov.uk.

 

At the bankruptcy hearing you will be asked if you have taken financial advice from one of the bodies mentioned above, or from one of the recognised local charities that exist for this purpose.

Ring your local court (details on http://www.hmcs.gov.uk) and ask for details of procedural matters, and pointers to local organisations. Do not ask for financial advice as they won't give it. My local court is quite helpful on these matters (probably because they have to do it so often).

 

Good luck - keep us all posted on how you get on.

[robbond55]

Palomino - thanks.

I can get full court fee remission as I am on Income Support alongside my other disability related benefits but I have applied to the MS society as they can sometimes provide grants with help towards bankruptcy fees.

I have been advised by the CCCS that this would be the best route for me so I am in the process of opening a Co-op cashminder account and closing down all other surplus accounts before I take the step and file the petition.

[jussi2010]

Hi,

I'm brand new to this forum, so not sure if this is right place to post, so apologies in advance.

 

I'm thinking about making myself bankrupt. I know about most of the rules regarding bankruptcy, but unsure about one thing in particular.

 

I currently claim DLA and am not sure whether this will be taken into account as income, or is it excluded? If the official receiver sets up a payment order, can DLA be treated as income?

 

Sorry, one more thing. How will I know what is regarded as too much income, as I'm only on state pension in addition to my DLA (plus pension credits), so could this be enough for the official receiver to take money off me?

Thanks very much for anyone's help on this matter.

[debtinfo]

It is all classed as income, but if all of your income comes from benefits and state pension then you will not have to make any payments

[jussi2010]

Thanks DEBTINFO for your help. Appreciate the info.

[jussi2010]

It is all classed as income, but if all of your income comes from benefits and state pension then you will not have to make any payments

 

Hi, thanks again for your help debtinfo. Sorry to ask what may seem a stupid question, but does DLA count as benefits (I assumed that DLA cannot be regarded as income as such because of the nature of this benefit). Thanks for your time.

[BEBOBEBO]

Hi Jussi

 

DLA is generally given for specific purpose and the OR would expect you to spend it that way. If you are on benefits alone as an income the OR would not ask for an IPA, this is unless you have signifcant surplus left over at the end of each month then they may ask you to contribute.But they wouldnt look to enforce it.