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Can I go Bankrupt if I am on Benefits?

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Can I go Bankrupt if I am on Benefits?

Can I go Bankrupt if I am on Benefits?

Are you receiving benefits such as Universal Credit, Tax Credits or ESA? If so, bankruptcy could be an ideal debt solution for you. If you have no other sources of income you will not have to make any further payments towards your debts.

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Is it possible to go Bankrupt if you are on Benefits?

If you are receiving benefits but are struggling with debt you can go Bankrupt. There is nothing to stop you using this solution if you feel it is right for you.

Bankruptcy may actually be a very sensible option for you. The fact that you receive benefits may mean that you are on a low income. As such other solutions such as an IVA which require you to make monthly payments may not be affordable.

If you go Bankrupt and cannot afford to make payments towards your debt you will not have to. The money you owe will be written off after 12 months.

Do you have to pay the Bankruptcy Application Fee if you receive Benefits?

If you want to go Bankrupt you will have to pay the application fee whether you are receiving benefits or not. Despite the fact that you probably have a low income you will not be eligible for any reduction.

In England & Wales the bankruptcy application process moved on line on the 6th April 2016. The fact that you no longer have to visit the Court is seen as a positive step by many.

However the downside is that there is no longer any option to waive part of the fee for those on a low income.

It is possible to pay the bankruptcy application fee in instalments. However you will not be able to submit your application until it is paid in full.

Will you have to make payments towards your Debts?

When you go bankrupt you have to declare all of your income including any benefits. The Official Receiver will then calculate if you can afford to pay towards your debts.

If your only income comes from benefits it is very unlikely you will have to pay anything. This is because you are unlikely to have any surplus income.

Your benefits are set so that you can pay for your reasonable living expenses only. There should be no surplus which can be used to pay for anything else.

You may have other forms of income as well as benefits. In these circumstances your total income is taken into account. If based on this total you can afford to make a payment towards your debts you will have to do so.

How to pay the Bankruptcy Fee if you are on Benefits

Finding the money to pay the Bankruptcy Fee is unlikely to be easy if you are on benefits. However there are some things you can consider which might help.

First can you borrow the money you need? Perhaps a friend or family member can lend you the money. If you have available credit on a card or overdraft you could also use this or borrow from a Payday lender. This is not ideal but you will not be penalised.

If you borrow from friends or family to pay for Bankruptcy, you will not normally be able to repay this money until after you are discharged.

Where borrowing is not an option then you will have to save. To help you do this you should stop paying the debts which you will include in your Bankruptcy. Instead put this money aside and save it towards the fee.

When you stop paying your creditors will probably start to hassle you and threaten Court action. You should explain that you plan to go bankrupt in the near future and request that your account is put on hold.

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Comments 108

  1. Richie P
    10.11.2021

    What is the total cost to go bankrupt?

    1. 10.11.2021

      Hi Richie

      The total application fee to go bankrupt is £680 per person. This is the case whatever your circumstances (whether or not you are on benefits). There is a very useful article which gives more information about this including ideas about how you can get the money together in the following article: How much does bankruptcy cost?

  2. SuzanneM
    22.09.2021

    My son lent me money i gave it back he bought a car. The official receiver wants his car is this possible

    1. 22.09.2021

      Hi Suzanne

      If you repaid your son just before going bankrupt, this is known as a preferential payment. Even though it was your son, you have paid back one of your creditors in preference to the others. This is not allowed.

      Because the official receiver has become aware of the transaction, they have to recover them money. They will normally have written to your son and asked him to repay to them the funds that you gave him. If he no longer has them because he has bought a car, I am sure the official receiver has said he will either have to sell the car and give them the proceeds or they can take the car in lieu of the debt.

      Unfortunately, the official receiver’s hands are tied, and they have to recover the money. There is no way round it. If your son refuses to co-operate, they could take him to court for the money.

  3. Karl R
    26.07.2021

    Hi. I am on universal credits and pip and i get child benifits. If i go bankrupt will i lose them?

    1. 26.07.2021

      Hi Karl

      You don’t need to worry. You will continue to receive all your benefits if you go bankrupt. They will not be affected in any way. You can read more about this here: What happens to my benefits if I go bankrupt

  4. Clairee
    28.05.2021

    If i go bankrupt with they come to my home?

    1. 28.05.2021

      Hi Claire

      This is a good question. The answer is no. For most people there is absolutely no need to worry. There is no chance the OR will visit your home.

      The official receiver will only rarely make a visit to a home or business premises. This would only happen if you run a business and they want to check on the value of your equipment or if you are very wealthy and they suspect you may have valuable antiques.

  5. Sharon
    27.05.2021

    I am currently not on benefits UC but need to go bankrupt. I have cancer, my husband and I have split up, I am not working. Would I be able to get universal credit after bankruptcy?

    1. 28.05.2021

      Hi Sharon

      You do not have to worry about your benefits if you go bankrupt. It does not affect your eligibility to claim Universal Credit or any other benefit. All benefits you currently receive remain unaffected and any new applications you make are not influenced in any way if you are bankrupt.

      If you would like more advice about this or the bankruptcy process, please don’t hesitate to give me a call (0800 044 3194)

  6. Bonita C
    26.05.2021

    I am on PIP and my husband has lost his hid due to Covid. We are on universal credit, which doesn’t really help. How can I go bankrupt?

    1. 26.05.2021

      Dear Bonita

      Unfortunately, everyone who applies to go bankrupt has to pay the application fee. There is no exemption even if you are on benefits. If you are unable to borrow the money from a family member or friend, you will have to save it up even if this takes a few months.

      If your debt is less than £30,000 and your disposable income is less than £75/mth, then instead of going bankrupt, you might be able to consider a debt relief order (DRO). This solution gives all the same benefits as bankruptcy but costs a lot less (the application fee is just £90).

  7. Andrea
    19.04.2021

    Hi just an enquiry. If on benefits have you got to pay the full 680 to go bankrupt or is it just the 130 application fee that needs to be paid?

    1. 19.04.2021

      Hi Andrea

      Since April 2016 (when the bankruptcy application process moved on line) everyone has had to pay the full £680 fee. You do not get any discount if you are on benefits i’m afraid.

      If you will struggle with the fee, there are some ideas about how you can get the money together to pay it in this article: “Can’t afford the Bankruptcy fee – What can I do“.

  8. Shaziya
    30.03.2021

    If I go bankrupt on benefits, will my house contents be sold to pay for my debts

    1. 30.03.2021

      Hi Shaziya

      I confirm that you can keep all of your personal possessions including your house contents if you go bankrupt (unless of course you own anything extremely valuable), so you have nothing to worry about.

  9. Joe
    18.03.2021

    2 questions.
    Q1. Will the official receiver ask for proof or call up the persons who have been staying with? Basically I lived at a friends for 13 months and gave them cash of £500.00 every month for rent and bills. There was no contract written up and my friend didn’t notify the council I was living there. He is concerned the Official receiver will call him and look into him. This is no good for me as I when It comes to explaining to the official receiver where £6500 as gone. Will they want to call my him?

    Q2 I have since moved back home since December and give my parents £250.00 House keep. Again this is cash. I don’t want them know that I have gone bankrupt. Will the OC ask for prove of this as again this will further £1500 I have laid out & I don’t want the OC contacting my parents.
    Many thanks,

    1. 19.03.2021

      Hi Joe

      You have noting to worry about. The OR is not going to contact your landlord. You have been lodging with friends. This is very common and normally a lodger will have no written agreement. £500/mth does not seem unreasonable. I can assure you the official receiver will have no interest in your friend to whom you were paying rent. Whether he declared you to the council or declared the income he received from you to HMRC is not the OR’s concern.

      If you are living at home you are allowed to pay your parents rent and this is a legitimate expenditure in your bankruptcy living expenses budget. I would suggest £250/mth is on the low side. The OR will not ask for proof of this payment. It is well within the guidelines for reasonable expenditure on rent. You your parents will not be contacted and their property will not be affected in any way.

      If you need further advice before going bankrupt, please give me a call. I would be happy to chat to you. The advice is free and without obligation. I can be reached on 0800 044 3194).

  10. Rebecca
    17.03.2021

    Hi im wondering if i go bankrupt what will happen to my universal credit payments that go into my account monthly. And also am i allowed to repay my rent arrears

    1. 17.03.2021

      Hi Rebecca

      If you go bankrupt, you do not need to worry about your universal credit. It will continue to be paid to you as normal.

      In terms of your rent arrears, officially these would be included if you go bankrupt. If you live in council or Housing Association accommodation this is no problem. However, if you rent privately, it could cause an issue with your landlord. As such I advise that you do not go ahead with bankruptcy before speaking to us. You can call free on 0800 044 3194. The advice is free and without obligation.

  11. Hannah
    24.02.2021

    Hi, I am thinking of bankruptcy, I am currently in an IVA but struggling to pay each month. Both me and partner are on benefits, universal credit, child benefit. My daughter receives dla and I get carers allowance for being her full time carer. We also have a motability car as part of her DLA, would this be taken away if I went bankrupt? Also would I have to make any payments each month if I receive carers allowance? We live in a rented house from housing association. Thank you

    1. 01.03.2021

      Hi Hannah

      Given you live in rented accommodation and the majority of your income is made up of benefits, stopping your IVA and going bankrupt would be a sensible option. I can confirm that your daughter’s DLA money would not be touched. The mobility car would also remain unaffected. You would be able to keep it. Even though you get carer’s allowance, your overall income is likely to be low and you are unlikely to have any surplus. As such you would not have to make any further payments towards your debts at all.

  12. Mark
    17.12.2020

    Hi im currently on sick benefit after breaking both feet im about to go bankrupt. How do i get my benefits if they close my bank account

    1. 17.12.2020

      Hi Mark

      You will still be able to have a bank account where your benefits can be paid if you go bankrupt. However, it will have to be a basic account.

      All high street banks offer basic accounts. They come with standard services such as a debit card and internet banking but have no credit facilities.

      If your account is already a basic one (check with the bank if you are not sure) you have nothing to worry about. It will simply remain open after you go bankrupt. If it is a current account you will need to speak to the bank about downgrading it or you can open a new basic account with any other bank you choose.

  13. Lydia
    06.10.2020

    Hi,
    Can you declare yourself bankrupt if you have payment plans in place with debt collection agencies?

    I have a substantial amount of outstanding debt (in excess of 30k)but am currently repaying at £1 per month to various debt collection agencies. I am also a single parent, on UC and rent via HA.

    Any advice would be gratefully received.
    Many thanks.

    1. 06.10.2020

      Hi Lydia

      If you live in Housing Association accommodation, your only income is benefits and your car is worth less than £1000, bankruptcy would be an extremely good solution for you.

      You can certainly go bankrupt even though you already have payment plans in place (even if these are for just £1/mth). Once you are bankrupt you simply stop paying these plans. The official receiver will write to your creditors to tell them what has happened. Given your only income is benefits you will then not have to make any further payments towards your debts at all.

  14. Mae
    06.10.2020

    My partner has a debt of over 20 grand with his ex wife to a few creditors, his ex wife pays an IVA but my partners failed when he had to leave his job due to severe ill health. We are both now on a joint ESA claim and it’s the only income we get (£292.70 a fortnight) we live in social housing so our rent is payed for by Housing benefit. We have no assets and no car etc we literally have nothing, just a bunch of second hand furniture and the clothes on our back.

    He has been paying a few of the creditors £1 a month for about 2 years now. When his IVA failed step change told us to write to all the creditors asking them to wipe off the debt as a gesture of good will been as up until then he had been paying his IVA each month. 1 company for write off the debt and the other 3 we are currently paying £1 a month so arranged the monthly payment of £1. We never heard back off the other creditors and it has been 4 years. I don’t know if this is because his ex wife is still paying her IVA so they are getting some form of money.

    We did think about applying for bankruptcy at first but step change and CAB said there was no point as they can’t take anything off us anyway as we have nothing. I don’t know what to do for the best. If he was to file for bankruptcy though would it affect me? We have separate bank accounts but our joint benefit goes into his account As it’s his claim for the both of us. He also has 2 kids to pay for from his previous marriage.

    1. 06.10.2020

      Hi Mae
      I would say that the recommendation from Step Change and the CAB was wrong. The huge advantage that bankruptcy will give your partner is peace of mind. He will be able to put this situation behind him once and for all and move on.

      Given you both live in social housing, you have no assets or car and your only income is benefits he has absolutely nothing to lose by going bankrupt. Any debt he owes will be written off once and for all as far as he is concerned and he will then not have to worry about it any more.

      I confirm that him going bankrupt will not affect you in any way. Your bank account and your credit rating will remain unaffected. He can still have a bank account while he is bankrupt. That said if the account he uses at the moment is a current account he will need to change this to a basic one. He will be able to continue paying the maintenance for his children no problem at all.

  15. Ann-marie
    28.09.2020

    Hi I get universal credits and I get pip and am in debt of £26,000 I can,t afford to pay it of and I can’t afford bankruptcy either what do I do?

    1. 28.09.2020

      Hi Ann-Marie
      If you are not a home owner and your only income is benefits, it sounds as though bankruptcy would be an ideal solution for you. Once you are bankrupt your debt will be written off and you will not have to make any further payments towards it. The official Receiver can’t take money from your benefits to make payments towards your debts.

      The alternative options open to you which do not require you to pay an up front fee are either a debt management plan (DMP) or IVA. However the downside of both of these solutions is that you will have to make payments towards your debts of at least £100/mth. These payments will last for at least 5 years (in the case of an IVA). You would have to continue paying into a DMP until your debt is paid in full which would clearly take a lot longer.

      If you are struggling to get the bankruptcy fee together there are some different options you can consider. Firstly, if you have not already done so, stop making your payments to all your creditors. Instead save this money towards the fee. If any of your creditors contact you and ask why you are not paying them, you can tell them you are going bankrupt and ask them to put your account on hold. Most will be be helpful and give you a breathing space. Depending on your circumstances you might also be eligible for a grant from a utility company trust.

  16. Richard
    29.07.2020

    Hi James

    I have debts of 6000 I am on universal credit at the moment but I am a home owner. Will bankruptcy affect my mortgage / home?

    1. 29.07.2020

      Hi Richard

      If you are a home owner you should not go bankrupt without calling us to get further advice. If there is equity in your property, bankruptcy will put it at risk. As a homeowner, if your unsecured debt is £6000 you will probably be better off with a debt management plan.

  17. Mark
    16.06.2020

    Hi. My debts from 2009 are around £200K. Im on benefits ESA and PIP Im a social tenant and have a car reg 2006. I paid £600 a year ago but is a very bad conditon hence the price I paid but in the parkers valuation Private Price £735 – £1,045, Dealer Price £1,535 – £1,900 , can I apply for bankrupcy and keep car? Thank you

    1. 17.06.2020

      Hi Mark

      From what you have said it sounds as though bankruptcy is absolutely the right solution for you. Your rented property will not be affected and you will not have to give up any of your benefits.

      You have no need to worry about your car. If you paid £600 for it a year ago it is definitely not worth more than that now. You do not go by the dealer price. I recommend that you go by the price on webuyanycar.com I am sure this will show a value of less than £1000. If not put in the value of £600. You simply need to explain the condition of the car to the official receiver and they will be more than happy with that.

  18. Bex
    08.06.2020

    Hello, I have a couple of questions. I am currently off sick in receipt of universal credit, about £1,100 a month now as I’ve been signed off now without needing a sick note, mental health problems. I have £26,000 of debt. I was working self employed for Deliveroo on my scooter. I concerned that if I fold for bankruptcy while off sick I might lose my bike, but when I’m ok again that is the work I would return to.

    I don’t think it is worth more than £1000, is it possible They would take my bike since I’m not currently officially using it for work? On this amount of money a month from UC will I have to pay some towards the debt, I currently pay about £17 a month in total. Thankyou.

    1. 08.06.2020

      Hi Bex,

      Given you are not a home owner I would say that bankruptcy is an ideal solution for you. As mentioned in the above article, the official receiver will not to take any of your benefits from you. As such you will not have to make any payments towards your debts while you remain on universal credit. This would only change if during the year you are bankrupt you get back to work and your income becomes greater than your living expenses. However increasing your earnings to this level in your line of work is generally unlikely.

      You do not need to worry about your scooter. If it is worth less than £1000 it is exempt from bankruptcy. Even if it is worth a little more, you would still be able to keep it as it is a tool of your trade. Even though you are not working now due to illness, you will need your bike for work when you recover. As such it would not be taken from you.

  19. Rachael
    14.05.2020

    Im currently in receipt of benefits due to ill health and a very rare form of epilepsy which is severe. My partner has recently been sent to prison for 3yrs and im finding it very difficult to cope with the mounting debts. I suffer with mental health issues and all the letters of enforcement, recovery, CCJ and loosing my home is sending me very close to the edge. Any ideas would be much appreciated.
    Many Thanks

    1. 14.05.2020

      Hi Racheal

      I am sorry to hear about your situation. From what you have said bankruptcy might be a good option for you. If so it will mean all your debt is written off. Non of your benefits will be taken from you and after just 12 months the bankruptcy will be over and you can have a fresh start.

      Whether or not bankruptcy is right for you will depend on a number of things. Two of the main ones are as follows: First are you a home owner or renting? If you are renting then bankruptcy could be sensible. Your landlord would not be told and as long as you maintain your rent, your home will not be at risk.

      Second how much debt do you owe? If the total amount is less than £20,000 you might qualify for a debt relief order. This would give exactly the same outcome as bankruptcy but would be cheaper to implement.

      If you want further advice about your options and would like to speak to me about it please feel free to call. I can be reached on 0800 044 3194.

  20. Colin
    13.03.2020

    Hello James,
    I am currently considering bankruptcy. I have a CCJ for £28K, in my overdraft of £4k per month and have 2 credit cards and a loan of £15K. I am currently unemployed,( previously on a large salary) now on UC and live in a private rental house with my wife and 4 children. I have come to the decision that BK is the right decision since I am never going to pay off all my debts in any reasonable time frame.

    I have checked my tenancy agreement and cannot see any wording stating I will be evicted should I go bankrupt and I don’t own a car. My wife owns the family car as I had a company car before I was made redundant. So I think I have answered my question already but CCJ will be covered in the BK?

    If I start a small sole trader business to supplement the UC, lets face it they don’t give you much to survive on with 4 kids and rent, will the OR look to take any earnings I take from a small sole trader business and setup an IPA?

    1. 16.03.2020

      Hi Colin

      From what you have said I agree bankruptcy sounds like a sensible option for you. The CCJ would certainly be included.

      You should not worry about your rented property. Your landlord will not be told and so as long as you maintain your rent payments there should be no issue whatsoever. Your wife’s car will not be at risk as it is hers not yours.

      Once you are bankrupt you only have to make a payment towards your debt if you have a surplus income. Given you earn sufficient to cover your reasonable living expenses and no more then you would not have to make further payments. Remember if you start to earn money then you need to update DWP and your universal credit may also fall.

  21. Nigel
    25.02.2020

    Hiya

    I’m married but own nothing. I’m on esa and pip.

    I owe about £10,000 to esa for over payment and I owe about £10,000 to Lowell debt recovery. Can I apply for bankruptcy?

    1. 25.02.2020

      Hi Nigel

      You can apply for bankruptcy yes. It sounds as though it would be a sensible option for you. If you go bankrupt all the debt you owe will be written off. This includes the ESA over payment and the debt owed to Lowell (who have purchased the debt from the original creditor).

      Given you are renting and have no assets you have nothing to lose and your wife will not be affected in any way. In addition you will continue to receive your ongoing benefits payments. You will not have to make any further payments towards the debts.

      For more information on how to get started have a look at this article: How to go Bankrupt

  22. Ozzy
    23.02.2020

    Hi I’m on pip mobility,dla and esa and I have 14k debt personal loan (not secure) and credit card,will they take any money from my benefit also when I go bankrupt my account will be freeze so how will get paid my benefit?

    1. 24.02.2020

      Hi Ozzy

      I confirm that if you go bankrupt zero money will be taken from your benefits to repay your debt. You will not have to make any further payments at all. Your debts will be written off. After 12 months you will be discharged and that will be that.

      If your bank account is with a bank you owe money to you will need to open a new basic account with a different bank. You can then use this while you are bankrupt (and after if you wish). All your benefits can be paid into this account no problem. More information on this can be found here: Changing your bank account if you go bankrupt

  23. Kevin
    20.02.2020

    Hi

    I am on benefit and have £46000 credit card debt.

    Does the trustee or official receiver ask about my benefit statements?

    1. 20.02.2020

      Hi Kevin

      If you are on benefits you will need to declare this and the amount you receive on your bankruptcy application form. The official receiver may ask for copies of your bank statements to prove this is the only income you receive (although this is not always the case).

      Either way if your income is just made up of benefits the OR can’t take any money from you. As such your debts will be written off and after 12 months your bankruptcy will be over. As such given you are not a home owner and your car (if you have one) is worth less than £1000, bankruptcy would seem to be a very good way of resolving your financial problem.

  24. Stephie
    08.02.2020

    Hi James,

    I’m on universal credit receiving £1190 per month I have 2 young kids and live in a housing association property which I have only just got, will this be affected if I apply for bankruptcy? My debts are mounting up and I am now frequently getting red letters and threats to be ordered with a CCJ.

    I’m pretty sure that my debts are less then 20k but own a car which is about £3000 and scared they will take it off me if I apply for bankruptcy. The only other assets I own are tele’s, my kids game consoles and other household goods will these be safe?

    Please can you send me some advice on what I should do as once my car insurance, rent, food shopping, phone and other things are paid I am practically left with nothing. I want to make sure if I apply for something my benefits won’t be affected my house hold possessions are safe and I won’t be kicked out my property.

    The only thing that does concern me about applying is my car as it is worth £3000 as it was bought for me as a gift and I need it to take my children to school every day.

    Thanks Stephie

    1. 08.02.2020

      Hi Stephie

      Bankruptcy sounds as though it might be a very sensible option for you because you have nothing to lose.

      I confirm if you go bankrupt your property will not be at risk in any way. The Housing Association will not be told. Even if they do find out they do not care as long as you maintain your rent payments. You can also keep all your household belongings. Your TV and games consoles will not be touched.

      You do not need to worry about your benefits. They will not be affected at all. They will continue to be paid to you in exactly the same way as they are now so you can maintain all your household bills. Given your only income is benefits nothing will be taken from you and you wont have to make any further monthly payments towards your debts.

      The only thing you do need to consider is your car. If it is worth more than £1000 you might have to get a cheaper one. You should check the value on we buy any car to double check. That said if it was a gift then it might be possible to argue that you do not own it and you are simply using a vehicle owned by someone else. Then it would not be at risk at all.

      If you want to chat through any of this please contact me at Bankruptcy Expert (0800 044 3194).

  25. Michael
    29.01.2020

    Hi I have debts totalling around 20k and am about to have a further 20k in working tax credits over payments

    I work but am paid on commission some weeks I earn 30 plus but i can earn as little as zero some months

    With the extra 20 debt incoming I have been thinking about a few options bankruptcy being one my main issue is it says assets will be sold I don’t own much a pic ipad a few game consoles and games and 2 old hdmi TVs as most everything I had of value has been sold to try and pay the debts

    My question is would I lose the last few items I have. Also the fee. I have £480 saved is there a charity that could help pay the rest

    1. 30.01.2020

      Hi Michael

      If you go bankrupt you do not need to worry about your personal belongings. You will be allowed to keep all your household possessions including your ipad, TV, and games console.

      In terms of getting help with the fee there are some energy companies who offer grants to their customers. You can find more information about this and ideas on how to pay the bankruptcy fee here: How can I pay the Bankruptcy fee

  26. Jackie
    09.01.2020

    I have a few debts, totalling around £9k. I live with my partner who is hopefully about to start an apprenticeship. I stopped working around a year ago to care for our baby full time. We are receiving around £1300 in benefits a month. I haven’t paid any debts since I went on maternity leave in November 2018. We’re just about managing to live on what we get from benefits let alone paying off my debts. Would bankruptcy be my best option? Please let me know.
    Many thanks.

    1. 09.01.2020

      Hi Jackie

      Given what you have said about your situation and assuming you are not a home owner but renting then yes bankruptcy would be a sensible option for you. Most certainly better than a debt management plan or IVA in your circumstances. This is because all your debt would be written off and you would not have to make any more payments towards it.

      However before going down that route I would recommend to look into getting a debt relief order. This give you exactly the same outcome as bankruptcy (ie your debt is written off and you will not have to make further payments towards it). However the cost is much less. The application fee is £90 compared with £680 for bankruptcy.

  27. Michael B
    06.01.2020

    Hello. How do I find out how much debt i owe exactly? I know its under 20k I have nearly 3k in housing benefit arrears and 2k in the areas such as utility and old phone/internet contracts. Please give me some advice. Thanks Mike

    1. 07.01.2020

      Hi Michael

      The only place you can find a list of your debts is your credit file. I would recommend you order a statutory copy of your file from both Equifax and Experian. That will be a very good starting point as debts to utility companies, mobile phones and other credit companies should be listed.

      If you have over payment of benefits these will not be listed on your credit file because they are not credit agreements. To get exact balance for your housing benefit debt you will need to speak to the associated council. They should be able to send you a written statement of account.

      I assume the reason you need to prove your total debt is less than £20K is that you are thinking about a Debt Relief Order? Generally speaking a copy of your credit file and a statement from the council re the housing benefit should be enough to prove the debt to the Approved Intermediary you are working with.

  28. Lynda
    12.12.2019

    Hi myself and my husband want to go bankrupt, can we do this together or do we have to apply for bankruptcy separately ? We are both on benefits due to my disability and my husband is my full time career

    1. 12.12.2019

      Hi Lynda

      Bankruptcy is an individual process. As such both you and your husband would have to make separate applications. You both have to complete a separate application form (although much of the income and expenditure detail will be the same in each). Unfortunately despite being on benefits and a low income you would both have to pay the application fee.

      If either of your debts is less than £20,000 that person might qualify for a debt relief order which would give the same outcome but be cheaper to implement.

  29. Scott
    16.08.2019

    Hi me and my wife are about to go bankrupt, we are self employed and on universal credit, if they freeze our bank accounts will we still get access to our benefits? And also as sole traders will this cease or will we continue as normal? Thank you very much.

    1. 20.08.2019

      Hi Scott

      You and your wife can have a bank account if you go bankrupt. However it will need to be a basic account. You should check with your bank to see if the account you have now is a current or basic one. If it is a current account it will need to be changed to a basic one. Most banks will be happy to do this for you. You will get a new bank account and sort code so you will need to make sure you update Universal Credit with the new details.

      If you are self employed (working as sole traders) you can certainly continue to do this after you are bankrupt. You should be able to continue trading as normal. Having said that if your business has assets (for example a shop would have stock) or you have employees this needs more careful consideration. Please call us if you would like to discuss this (0800 044 3194)

  30. Roger
    17.05.2019

    Hi. I claim carers allowance for my partner who claims esa/pip. Where should enter my partners pip payment as an expense on the application form?

    Ultimately all of our income currently comes from state benefits, with no view to change in the foreseeable future. Is it likely I will end up with a payment order, in your opinion?

    1. 17.05.2019

      Hi Roger

      Your partner’s PIP has to be included as part of her income on your application. However you do not have to justify how this is spent. As such you include the same amount in the expenses section under “other expenses” right at the bottom. Call it PIP expenditure. This money should not be taken into account by the OR when calculating surplus income

      Your carers allowance is not actually treated as a benefit by the OR. As such in theory some of it could be taken from you if you have a surplus. However I think this would be very unlikely given the only other incomes you have are benefits. As such I do not believe you will get an IPA.

  31. Tammy
    29.03.2019

    Hi I’m in the early stages of bankruptcy I’m unemployed at the beginning of the year due to my metal health issues and never been on benefits before. I’m entitled to a few benefits which will be over £1000 a month can the bankruptcy still take money of me if it’s over £1000 in benefits? Thanks Tammy

    1. 29.03.2019

      Hi Tammy

      If your only income is benefits you have no need to worry. Even if the total you receive is greater than £1000 non of your benefits will be taken from you to pay your debts. You would only ever be asked to make payments towards your debts by the Official Receiver if you have earned income such as wages or a combination of wages and benefits.

      If your situation does not change and you do not get back into work before you are discharged then you will never be asked to make further payments towards your debts.

  32. Hannah
    21.03.2019

    Hi I’m wanting to go bankrupt but can’t afford to pay it in one go as I’m on benefits and I have a lot of debt is there any other options to pay for it

    1. 21.03.2019

      Hi Hannah

      Unfortunately the bankruptcy fee always has to be paid. There are no reductions for people on benefits. Having said that you can pay the fee in instalments of as little of £5. The only thing is that the application cannot be submitted until the fee is paid in full.

      Are your debts less than £20k? If so one alternative you might be able to consider is a Debt Relief Order (DRO). This gives exactly the same outcome as bankruptcy but only costs £90 to implement. The DRO is specially designed for people on low incomes who will struggle to pay the bankruptcy fee.

      If your debt is greater than £20k or you do not qualify for a DRO for some other reason then one other option is contacting a charitable organisation. There are some who might be able to help you with the Bankruptcy fee.

  33. Mark
    11.02.2019

    Thanks for the info James…

    I have just added up my debts and i’m just over 20k.

    Can I pick & chose which debts I want included in a DRO? so I would definitely be under the 20k limit?

    Say if i was to leave out a Credit Card debt that i have with my bank for £1200 would that be acceptable? obviously I know I would have to then keep making payments to my bank which i would be happy to do.

    Regards

    1. 11.02.2019

      Hi Mark

      Unfortunately you cannot leave a debt out of a DRO. As such if your total debt is greater that £20k you will not qualify. The only option would be to pay off a debt to bring your total below the £20k level. However if this means paying more than £680 it is clearly counter productive as the cost of going bankrupt is only £680 which you can do straight away.

      Remember in your situation bankruptcy and a DRO would give exactly the same outcome.

  34. Mark
    11.02.2019

    Hi James

    Thanks for the reply regarding Bankruptcy & Benefits.

    If I opted for a DRO instead of Bankruptcy would I be expected to make payments seeing as my only income is PIP & ESA?.

    When I filled in a SOA I had more than £50 spare a month but I read an article on ”Debt Camel” that said this…

    In a Debt Relief Order (DRO), DLA or PIP is counted as “income” however there will be a line added into your “expenditure” that is the same amount for your “disability expenses” – this is often labelled something like “adult care costs”. This means that you will often pass the “not more than £50 a month surplus income” test for a DRO, even if you are currently paying more than that amount to your creditors.
    If all your income comes from benefits, you will definitely pass the DRO spare income test and will not have to make any monthly payments in bankruptcy.
    So the government agrees that disability benefits are required for everyday expenses and shouldn’t be used to pay your creditors.

    …………………………………………………………………………..

    Is this true? if so, then I would prefer a DRO over Bankruptcy.

    Regards Mark

    1. 11.02.2019

      Hi Mark

      Remember if you qualify for a DRO (which I believe you do) you will never be asked to make ongoing monthly payments. Further monthly payments are not required if you do a DRO.

      In terms of your PIP income what you have read is absolutely correct. When completing your monthly income and expenses budget you should included the PIP element in your income. However you should included an amount in your expenses for the exact same amount. I normally advise simply calling this “PIP related Expenditure”. The two things then cancel each other out. You do not need to justify what the money is actually spent on.

      That said given all your income is made up of benefits the official receiver automatically assumes you have no surplus income anyway. As such as Debt Camel says you will definitely pass the DRO surplus income test. If you went bankrupt you would not be asked to make ongoing monthly payments.

      Given you would qualify I suggest you make an application for a DRO. You will need to speak to an approved intermediary about this. I suggest you make an appointment at your local CAB. Step Change Debt Charity or PayPlan can also help.

  35. Mark
    28.01.2019

    Hi

    I’m currently in about £19000 worth of debt from Credit Cards, Store Cards, Catalogue & 3 unsecured loans. I would prefer the Bankruptcy option as the debts are really weighing me down (my fault i know)…

    I receive Benefits, ESA & PIP which totals £1234 a month + Housing Benefit. I don’t own any property or car and have no single items worth over £500. I’m currently up to date with all payments but every month it’s getting harder & harder to find the money to pay debts…

    I can afford the £680 Bankruptcy fees… but if i go Bankrupt how likely is it would any of my Benefit money be taken from me to pay towards debts?

    Any advice would be appreciated.
    Regards

    1. 29.01.2019

      Hi Mark

      Given your debts are less than £20,000 and you have no assets or surplus income the thought springs immediately to mind that you might qualify for a Debt Relief Order. This solution will give you the same outcome as bankruptcy but only costs £90 to implement. You can get assistance with this from your local CAB.

      That said if you do not want to wait for an appointment with the CAB and you have the fee for bankruptcy together there is nothing to stop you going ahead. This will be by far the quickest route to get things sorted.

      To answer your question about whether you will still have to make payments towards your debts the answer is no if your only income is benefits. The Insolvency Service technical manual section 31.7.40 states the following:

      “31.7.40 IPA or IPO should not be sought where bankrupt’s sole income comprises state benefits

      An IPA or IPO should not be sought where the bankrupt’s only source of income is state benefits…… There is no requirement to undertake an assessment of real disposable income where the only source of the bankrupt’s income is state benefits. In all other cases an assessment should be made even if part of the household income is derived from state benefits.”

  36. Yasmin
    18.01.2019

    Hi James,

    Really many thanks for your kind advice. Few more points I need your kind advice please. Bankruptcy fee £680 paid once or installment minimum £5. Until total amount paid the process will not start you know that. My question to you:

    1) In my present situation, if I don’t apply myself for Bankruptcy (as it is costly) and ignore the HMRC letter, what process or legal action HMRC will take to make me Bankrupt?

    2) As I know next steps after Statutory demand HMRC will apply to the court for Bankruptcy? What process the court will take?

    3) What is the difference between self-declaration (fee £680) AND when HMRC go court to make Bankrupt?

    4) What is your advice for me, self-declaration Bankruptcy OR let HMRC go through court? Is both process takes 12 months or how long the court will take to start counting the date?

    5) VERY IMPORTANT QUESTION: When HMRC unable to collect money than they will take the procedure to make Bankruptcy. 6 years ago I left France, WHY France authority (Revenue and Custom) not takes any procedure last 6 years to make me Bankruptcy even I was not living there?

    Thank you again for your kind free advice for all of us.

    1. 22.01.2019

      Hi Yasmin

      If you ignore the demand from HMRC I can only assume they will try to enforce the debt. It is difficult to know exactly what action they will take. They might try to use a bailiff. Alternatively they might petition to make you bankrupt. However as you have no assets this option seems unlikely as they would have to pay for the application (it would cost them around £2k).

      If HMRC did decide to make you bankrupt there would be a court hearing. If you agree and do not want to object you do not have to attend. You just call or write to the court and tell them you do not want to challenge the petition and are happy for the judge to make you bankrupt.

      Once you are bankrupt you are treated in exactly the same way as if you had submitted the application yourself. It lasts 12 months from the date you are declared bankrutpcy whether you do it yourself or HMRC do it.

      If you chose to make the application yourself you do not need to apply at the court. You use the government’s on-line system. Once you have completed the on-line application form and paid the fee you can submit the application. The application is then reviewed by an Adjudicator. If it is completed correctly and you qualify (ie have lived in England or Wales for the past 6 months) they will make you bankrupt the next working day. It lasts 12 months from that date.

      My advice would probably be to make yourself bankrupt. This is because HMRC may never do it and you do not want to be hanging around for a long time waiting and worrying.

      Unfortunately I cannot answer our last question. I have no idea why the French authority has waited until now to contact HMRC to collect the debt you owe. Perhaps (and this is just a guess) they are worried about the Brexit process and were concerned that unless they acted they would lose the option if the UK leaves the EU without agreement.

  37. Yasminn
    09.01.2019

    Dear James Falla,

    I was living in France for 20 years and I have France Passport 15 years. I came in UK July 2013 living permanently with my three children 14;11;07 years old.

    I just received HMRC letter that France authority demand £62000 unpaid council tax bill (mutual assistance recovery directives 2010/24/EU). When I left France in 2013 the unpaid bill was less than half amount. When I came to the UK I sold my all ornaments (sales document I have) just to rent a small flat and to buy food (in my very poor situation). If I don’t pay the HMRC will take legal action to recover the amount.

    Now I am receiving housing benefit (rented house), child benefit, child tax credit, and one child disability living allowance. I check the internet and know bankruptcy not affected any of my benefits. If I am right?

    According to my knowledge the only option to declare bankruptcy.

    My question: Can you give me a better suggestion not to declare bankruptcy? If I declare bankruptcy how HMRC will act on this issue with France and with me.

    Will any impact on my benefit? Which chapter best for me 7 or 11 or 13 or any other chapter?

    Thank you.

    1. 15.01.2019

      Hi Yasmin

      I understand from what you have said that your debt is owed in France. Given that you have no assets and are on a low income it looks like bankruptcy is absolutely the right solution for you.

      I can confirm that going bankrupt will not affect your benefits in any way. You will continue to receive these as normal.

      If you go bankrupt in the UK your debt in France (as it is an EU debt) is automatically included. You simply list the original creditor on the UK form but indicate that UK HMRC are dealing with it on behalf of the French Authority. In reality this makes the whole thing relatively simple as the Official Receiver only has to deal with HMRC.

      Given you are renting your home it will not be affected. If (as is likely) you have no surplus income you will not have to make any further payments towards the debt. You will be bankrupt for 1 year. The debt would then be effectively written off and you can put this episode behind you (other than of course the fact that your credit rating will remain negatively affected for 6 years).

      Note: In the UK there are no “Chapters 7, 11 or 13 etc. These refer to bankruptcy in the USA. Given you are living in England or Wales the process you need to follow is relatively straight forward as the application is made on line.

  38. Rachel
    31.12.2018

    I and my (under 16 yr old) daughter receive disability benefits. I also receive CTC, ESA and Child Benefit. My monthly income looks quite high on paper (2k ish) but my unsecured cc/catalogue debts are nearly up to 19k.

    I have disposable income of more than £50 and so I would not be eligible for a DRO but am considering bankruptcy as it’s all become too much. Some of my CC’s are high interest lenders (40% APR) and I’m paying more than my monthly min payment but I’m not getting anywhere with it at all and end up using the cards back up to my credit limit. I keep up with my repayments and have rarely missed them (may have a few defaults but am paying all debts).

    I have moved home last year from a property that was very low bills into a house that is high electric and costing a lot to heat, and even using the heating very little every day its costing around £50 per month. Ideally I need to keep the house warm as its affecting my disability but I can’t keep up with everything. I also recently ordered a new expensive mattress on my catalogue, as I need it for my back but I’m worried they might see this as fraud if I then go bankrupt! Any advice please? Silently panicking :(

    1. 04.01.2019

      Hi Rachel

      Based on what you have said I assume that you and your daughter are living in rented accommodation? If so and your disposable income is greater than £50/mth then I agree bankruptcy does seem a sensible option for you.

      In terms of using your catalogue just before you go bankrupt this is not ideal. However if the expenditure was due to medical grounds (i.e. your back) and unavoidable I do not think the official receiver will hold it against you. Even if they frown upon it in reality there is little or nothing they can do about it. I do not believe there is any risk that you would be accused of fraud.

  39. Michelle Fostet
    07.12.2018

    Hi, I owe 19800.00 in debts which i was paying through an iva. I then had to have emergency surgery and am now in disability benefits and esa. I contacted a non profit company to help me and they have suggested bankruptcy as the I was overpaid some benefits, which they are recouping monthly. This has taken me over 20,000, so a DRO is not an option now because of that!

    I have just been awarded back pay of 700.00 for PIP (disability). Do I need to declare this to the people who are going to arrange my Bankruptcy and if so, will they take it off me? I have been having money from family to help me whilst my benefits got sorted out and I would like to pay them back out of this backpay.

    1. 07.12.2018

      Hi Michelle

      The first thought that springs to mind is the simplest thing would be to use the £700 you have received to pay your bankruptcy application fee.

      However if you have already made the payment I would not worry too much. The money you have received is relatively small. If it went into your bank account and you still have it you should declare it on your application form. However given your only income is benefits it seems to me that you need this money to help support your ongoing living expenses. As such I believe the OR will let you keep it.

      I suggest that you explain to the OR that you need the money to support your living expenses. If you say to them that you are going to use it to repay your family they might consider that it is surplus to your needs and demand that it is paid to them.

  40. Harry
    12.06.2018

    If I go bankrupt but am then paid back payments for a non income related benefit within the 12 months before I am discharged would the official receiver take this away from me?

    1. 12.06.2018

      Hi Harry

      If you go bankrupt you have to declare any benefits that you receive. Generally speaking if your income is just made up of benefits you will not have to make any further monthly payments to your debt. This is because you are unlikely to have any disposable income. Your benefits are calculated to cover your personal needs not to fund extra expenses such as debt payments.

      However if before you are discharged you are paid a lump sum because you are owed back payments on your benefits the official receiver (OR) is likely to view this as a windfall. As such they may ask you to hand it over. That said if the lump sum received is relatively small you would probably be allowed to keep it.

  41. Sam
    20.05.2018

    I am looking to go bankrupt, I have put it off thinking I can clear the debt owed, but now realise it’s just not possible. I receive child tax credit, housing benefit, child maintance, student finance, as well as income from casual employment which varies evwry mnth.I am classed as a full time student and single mum. What would be included as income?

    1. 24.05.2018

      Hi Sam

      You will need to record all these forms of income on your bankruptcy application form (other than student finance which is not income). Having said that the Official receiver will not automatically take any of this money from you. They will want to look at all of your reasonable living expenses as well. They will only ask you to make a payment towards your debt if you have any disposable income (money left over after all your living expenses are covered).

      As I do not know anything about your expenses it is impossible to say whether you might have to make a payment or not. Having said that given the majority of your income is made up of benefits I would say that it would be fairly unlikely. A list of the allowances you can include in your budget can be found in our living expenses guide.

  42. Fiona
    11.05.2018

    I am currently on a dmp and owe £3715. I do not work and am in receipt of housing benefit, council tax benefit and carers allowance. My 13 yr old son has sensory processing disorder and is on the waiting list for autism spectrum disorder.

    My dmp are wanting most of his dla to repay MY debt which I feel is unfair as the money is to pay for the things he needs. Would I be able to go bankrupt owing this amount of money?

    This is the first time in years I have had enough money to make sure he has the things he needs and enough for the extra petrol to take him the places he needs to go. If they take it we will be back to square one. Is bankruptcy an option for me? Many thanks Fiona

    1. 11.05.2018

      Hi Fiona

      Firstly you do not have to make payments into your Debt Management Plan (DMP) from your son’s DLA payments. As you rightly say this money is to pay for his needs and not your debts. As such no DMP provider can force you to hand this money over.

      Having said that most DMP providers can only help manage a DMP on your behalf if you are able to make a minimum payment of at least £75-£100/mth. If you are unable to do this without using some of your son’s money this may be why you are being asked to hand some of it over.

      In terms of whether or not bankruptcy is an option for you if (as I assume) you are living in rented property the answer is yes. If you went bankrupt your debts would be taken away from you. Given your income is made up of just benefits it would be highly unlikely you would have to make any further payments towards them. After a year you would be discharged and the debt written off.

      Having said that the issue for you will be the up front bankruptcy fee. This has to be paid in full before you can apply. Given this I would recommend that you look into the option of a Debt Relief Order (DRO). This would give the same result as bankruptcy but given you qualify it would only cost £90 to implement. You should make an appointment with your local CAB to discuss this or speak to the Step Change Debt Charity.

      1. Fiona
        14.05.2018

        Hi James,

        Thank you so much for your reply. I forgot to add that I have a car on finance from First Response, if I took out a DRO would I be allowed to keep on paying for the car? Where I live I really need a car to get us anywhere.

        Kind regards
        Fiona

      2. 14.05.2018

        Hi Fiona

        The fact that you own a car on finance may affect your ability to use a DRO. The issue is that to qualify for this solution the second hand value of your car must be no more than £1000 regardless of any outstanding finance. If the value is more then you would not qualify and you would need to consider the bankruptcy option.

        In terms of bankruptcy you are allowed to keep a car as long as its second hand value net of any outstanding finance is £1000 or less. In other words you are allowed to deduct the value of any outstanding finance before the final valuation is reached.

        For example: If the value of your car is £2500 and the outstanding finance is £2000 you do not qualify for a DRO because the value is more than £1000. However if you go bankrupt you could keep the car (as long as you continue paying for it) as the value net of outstanding finance is only £500.

        Note: Normally if you go bankrupt and have a car on finance the finance company will allow you to keep it as long as you maintain the payments. However you need to double check with them that they would be OK with it BEFORE you go bankrupt. If they say it is OK then the official receiver will normally have no issue with you maintaining the payments while you are bankrupt as long as they are not unreasonably high.

  43. Donna
    09.03.2018

    Hello,

    I have just been hit with a 14,000 bill from a solicitors that I was using as a no win no fee personal accident claim. After 3.5 years, I was chatting to him and mentioned something that I know had disclosed to him prior.He denyed this, and said that I had signed my witnes statement to the contrary. I looked at it later, and the statement wasn’t there on the original.It had been added recently, and after a bombardment of emails and telephone calls, I just scanned through and signed missing the vital added- not by me, statement.

    I can’t possibly pay this back.I have other debts too.My income as a carer only comes to roughly 1000 a month. Is bankcruptcy an option for me. I actually feel sick thinking about it.

    1. 09.03.2018

      Hi Donna

      Thank you for your call just now. I can confirm that if you owe a debt to a solicitor that you cannot pay this would certainly be included and written off if you went bankrupt. Any other unsecured debt in your name would also be included.

      Given you are not a home owner and do not own a car you have nothing to lose by going bankrupt. The only thing to note is that as you are employed if you have any surplus income you would be obliged to pay this towards your debts for 3 years.

      My first suggestion is that you go back to the solicitor in question and explain that if you cannot come to a sensible agreement you will have no choice than to go bankrupt. Perhaps offer him £500 for his time. If he will not budge and wants to press you for the full amount my advice would be not lose any more sleep over it. Just go bankrupt and have done with it.

  44. R cooper
    08.03.2018

    Hi thinking of going bankrupt and I know they will freeze my bank accounts. If this happens how do you get your housing benefit? Please help

    1. 08.03.2018

      Hi there

      Maintaining a bank account when you are bankrupt is not as much of a problem as you might think. You are right if you have a current account the bank will normally freeze it a week to 10 days after you go bankrupt. However most banks will be happy to open a basic account for you which will remain open. You can have your benefits paid into that account.

      If you already have a basic account you do not need to worry. This will simply remain open. However if you owe money to your current bank I would advise opening a new basic account with a different bank. At present TSB seem to be very helpful in this regard. You can open your new account either before or after you go bankrupt it will make no difference.

  45. Philip
    26.02.2018

    I have a debt of just under £2,000 which I can’t afford to pay back . I don’t claim any job seekers allowance or any other benefits and I’m not working as I look after my kids while my partner works part time. I don’t have any money at all. Don’t know how I can pay this debt off as my partner needs all her wage for living costs

    1. 26.02.2018

      Hi Philip

      Your situation sounds similar to that of Charlotte Read above.

      Given you have debts of less than £20k and have little or no income I suggest you consider a Debt Relief Order (DRO). This solution gives you the same outcome as bankruptcy but only costs a one off payment of £90 to implement (compared to the £680 fee to go bankrupt). If you are not a home owner this solution is designed specifically for you.

      You can get a DRO by making an appointment with the debt counsellor at your local CAB (Citizens Advice) or by speaking to the Step Change debt charity.

  46. Daryl
    31.01.2018

    Hi,
    When applying for Bankruptcy whilst on Benefits (ESA) does the EX160 form no longer apply? Is it no longer possible to get part of the fee waived? Will I have to pay the full fee of £680?
    Thanks.

    1. 31.01.2018

      Hi Daryl

      In April 2016 the bankruptcy application process in England and Wales moved online. Given you no longer have to go to the Court there is no “Court Fee” to pay. The EX160 Court Fee Waiver application is therefore no longer applicable to the bankruptcy process. I am afriad everyone now has to pay the full £680 fee whether they are in receipe of benefits or not.

      If you are struggling to get the £680 together there are certain charitable trusts that may be able to help. You can find out more about this in the last section of this page: The cost of Bankruptcy

  47. Sarah
    25.01.2018

    Hi, I am self employed making very little sometimes nothing, claim working tax Credits and child tax Credits. If I go bankrupt will my child maintenance from her father count as income to pay debts off? Thanks

    1. 29.01.2018

      Hi Sarah

      I can confirm that Child Maintenance payments are considered as part of your income. As such if you have any disposable income the Official Receiver is likely to require you to pay this towards your debts for 3 years yes. This rule is confirmed in the Insolvency Service Technical Manual Section 31.7.75.

  48. breda quinn
    08.01.2018

    If I apply for bankruptsy can i use another name that i have been called and have debts in this name also

    1. 08.01.2018

      Hi Breda

      If you have debts in another name such as your maiden name there is no problem with this. They can be included in the same bankruptcy application. When you complete the application form you will be asked whether you have had debts in any other name and if so you can include that name as well. All the debts in both your names will be included.

  49. Wayne Holmes
    05.01.2018

    I have got debts which I can’t pay and I can’t remember who I owe money too but would like to apply for bankruptcy but am on benefits

    1. 05.01.2018

      Hi Wayne,

      There is nothing to stop you applying for bankrutpcy if you are on benefits. You are just as eligable to apply as anyone else. In addition one of the advantages of bankruptcy is that you do not have to remember who you owe money to. You should try your best to list the people you do know of on your application. However if you forget some they are still included and these balances also written off. If any of these were then to contact you after you are bankrupt you simply inform the Official Receiver and they will deal with them for you.

  50. Tracy
    31.12.2017

    I have just lost my home saving to go bankrupt but just moved in with my partner he is claiming tax credits for both of us,will he be effected when I go bankrupt don’t want him or his address to be involved

    1. 02.01.2018

      Hi Tracey,

      Your partner is not affected in any way if you go bankrupt. You will have to confirm his income (including benefit income) on your application form but he will not be liable to make any payments towards your debts. For more info about how your partner is affected if you go bankrupt have a look here: My Partner and Bankruptcy

  51. kay moffett
    15.06.2017

    Hi I am a single mother of 5 kids on benefits and have been Hinding from my debts but it’s all getting to much now. I cant even remember who I have debts to and how much. I need help help please

    1. 19.06.2017

      Hi Kay,

      I am sure that there is a sensible solution for your debt problem. If you owe less than £20,000 and are living in rented accommodation you may qualify for a Debt Relief Order. This will only cost £90 to implement and then you get the same benefits as Bankruptcy. If you owe more than £20,000 then bankruptcy might be the best way forward. Please do not hesitate to give us a call and we will be happy to give you more advice (0800 044 3194).

  52. Charlotte Read
    23.04.2017

    I have debts of at least £4000 approx I’m a single mum of 2 on benefits and struggling to keep up repayments and pay my creditors off £2000 is just electric which by time I’ve done food rent and council tax I can’t afford to pay my electric really stuck as too if I go bankrupt will I still be entitled to my benefits?

    1. 24.04.2017

      Hi Charlotte. Bankruptcy does not affect your entitlement to benefits. If you were to go bankrupt you would still qualify for your benefits and they would still be paid to you as normal.

      Given your debt is less than £4000 I also recommend that you consider a Debt Relief Order. This solution works in the same way as bankruptcy and gives exactly the same outcome. However it costs much less to implement (£90 compared to £680 for bankruptcy. If you are living in rented accommodation then I would thenk that you will almost certainly qualify. You can find out more info here: What is a Debt Relief Order

  53. Mrs Lynda nettleship
    08.06.2016

    On benefit ESA , had to move out of my house which I was buying and move to private rented ,18 month been on sale and getting into arrears can’t pay anything need help

    1. 08.06.2016

      Hi Lynda

      If you have debts that you cannot afford including a possible mortgage shortfall after the repossession of your property then bankruptcy could well be a sensible option for resolving the problem. You can certainly go bankrupt if you are on benefits as the article above explains. If you need more help or advice about how to best deal with your debts please do not hesitate to contact me on 0800 044 3194.

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Melissa McDonald
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