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Bankruptcy

Hello and welcome to my latest blog. For today’s instalment I am going to be talking about bankruptcy. I want to continue on with the journey of making everyone savvy with all issues relating to debt and getting out of it.

Bankruptcy is usually thought of as the last resort in solving financial problems. From my past experience, whenever the word is mentioned people get instantly scared and go into a bit of a panic.

Stigma

In the past Bankruptcy has always carried a stigma with it, it has always been thought of as a big no no, or not something that should be done easily. However over recent years, with more and more people experiencing problems with debt, it has become more acceptable for someone to become bankrupt.

What does it mean?

In a nutshell you would either register for bankruptcy yourself or one of your creditors would petition for bankruptcy in order for them to attempt to get the money that is owed to them. You would usually have greater debts than you do assets meaning that you are insolvent. When you are made bankrupt you will be relieved of all of your unsecured debts.

How does it work?

The bankruptcy will usually last for one year, however you could be required to pay an Income Payment Order or IPO which could last for three years and this is where you pay your surplus income into the bankruptcy to pay something to your creditors. At the end of the term your debts become ‘discharged’ meaning that the balance will be cleared and you will no longer be liable for paying anything to the creditors. For the duration of the bankruptcy you will be assigned an Official Receiver or (OR) who will be in charge of your case and will oversee everything. One of the important roles of the OR will be to protect any assets that you may have such as a car, house or motorhome. They will also be asked to investigate your debts, how and why the money was spent and what else has been done with the funds.

Assets

All assets are at risk when going bankrupt such as your house, car, motorhome or any household possession. Your creditors would seek anything that they deem to be of excessive value. However your creditors cannot ask you to sell any equipment that is needed for work purposes or household items such as clothing, bedding, furniture that is needed by the family.

What happens next?

The bankruptcy order will remain on your credit reference file for six years, after that you will have a ‘fresh start’. However the bankruptcy could have certain restrictions relating to the job you can do, or what credit you can take out in future.

Bankruptcy doesn’t have to be all bad, look at this list of people who were made bankrupt and have gone on to do bigger and better things and learned from their mistakes is the past.

Donald Trump

Walt Disney

Elton John

Simon Cowell

Peter Jones

For further information on Bankruptcy click here and follow the links.

Hopefully this has helped clear up bankruptcy for you a little. If you do have any queries about anything you can always ask and remember our helpline number is 0800 2802816.

Don’t forget you can find me on Twitter and Facebook

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Top 10 ways to beat Blue Monday

The third Monday in January is supposedly the most depressing day of the year. It factors in the miserable weather, the distant cheer of Christmas as well as post Christmas debt, failure to stick to New Year’s resolutions and low motivation to add on top of it all.

The top ten ways to beat today’s blues are:

1. Help someone in need – helping someone who needs your help instantly makes your feel better.

2. Eat your favourite food – ditch the post Christmas diet for the day and indulge in your favourite foods.

3. Dance and sing – release endorphins (the happy hormone) to take your mind off everything depressing.

4. Go for a walk – the fresh air, sounds of the birds or the sea has a calming effect and can instantly make you feel stress free.

5. Sit up straight – you may not feel like doing too much exercise but simply sitting up straight can lift your mood.

6. Walk around barefoot – it is said that tired feet can make you feel tired, give them a new sensation to wake them up and make them feel better, which will make you feel better too.

7. Flirt – the brain produces feel good hormones when getting flirtatious and will put a smile on your face.

8. Receive an unexpected compliment – receiving a compliment on any ‘normal’ day can lift your mood but even more so today.

9. Win money – with credit card bills arriving through the letter box all money is welcome, so every little helps as they say.

10. Write a journal – writing everything down puts things into perspective and allows you to reflect on it all. Use the quiet time it takes to write your journal to look back on your situation and see where you can put yourself back on the right path.

If you are struggling with debt, no matter how great or small we are always here to help. Our freephone number is 0800 2802816.

Don’t forget you can find me on Twitter and Facebook

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IVA’s Explained Blog 5

Good afternoon and welcome to the fifth and final instalment of this weeks IVA themed blogs. On Monday in the first blog I talked about what an IVA is, how it works, how it is set up and the creditors meeting. In blog two on Tuesday I talked about assets, your home, your mortgage and re-mortgaging. On Wednesday for the third blog I talked about your debts and what type of creditors each debt is classed as. And then yesterday for the fourth blog I talked about your income, how we calculate it, what income is used, additional income and benefits.

For this last blog of the week I wanted to talk a little about what happens once your IVA has finished. In your initial IVA proposals we would put forward that you make 60 payments over 5 years. As mentioned in a previous blog, you could possibly be asked to make a further 12 payments if you have a mortgaged property and are unable to release the equity. The IVA stays on your credit reference for six years. Therefore assuming you maintain your IVA payments it will only appear on your file for one further year or at the end of your arrangement depending on your plan length. After the six years your credit reference won’t show anything at all.

At this stage you will be debt free.

I am hoping that by now you should all have a clearer knowledge of IVAs, but if not and you do have any questions then please do not hesitate to get in touch. You can visit the Debt Questions forum which has a lot of other information and the opportunity to post your own questions or post questions on the Facebook discussion board or on one of the blogs or simply call our Helpline 0800 2802816 where someone will be on the end of the phone to hopefully help you.

Don’t forget you can find me on Twitter and Facebook

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IVA’s Explained Blog 4

Good afternoon and welcome to the fourth blog in this week series. So far I have spoken about a whole host of topics relating to IVAs and today I am going to concentrate on your income.

With an IVA it isn’t as simple as you telling us what you earn, what you spend and what you have left over. As an IVA is a legally binding agreement between you and your creditors everything has to be monitored and therefore proof is required as mentioned in the first blog. In the first blog I explained how we work out your surplus but today I want to go into a little bit more detail with your income and what happens if you earn anything additional as well as going through other types of income such as pensions, benefits and jobseekers allowance.

Additional Income

Although we only use your basic salary for the purpose of calculating your IVA payment any additional income such as overtime, commission or bonuses must be taken into account whilst in the IVA. Whilst we do not take that income into account for the purpose of your IVA proposals you will be required to notify us of any additional income and you would be required to pay a percentage of this into the IVA. You will be required, once in your IVA, to send in your Payslips regularly and your P60 annually so it would always be in your best interest to notify us straight away.


Pensions in an IVA

Some of you may no longer be working and will be receiving your pension, whether this is the state pension, pension credits or a personal pension all of these would be used as your income source for the IVA and all of it would need to be included.

If you are working and are paying into a pension scheme you would need to notify us of how much you contribute and we would need to show that you are making the minimum contributions whilst you are in the IVA.

Benefits and an IVA

Another popular source of income for many of our clients is from benefits. These benefits include:

*Disability Living Allowance

*Income Support

*Child Benefit

*Child Tax Credits

*Incapacity Benefit

*Working Tax Credits

The majority of benefits can be used to contribute to your IVA income. All of the ones above listed do. However some benefits will not usually be used mainly due to the basis that they are not guaranteed incomes. The main one of these is Jobseekers Allowance; this benefit isn’t guarantee and can only be claimed for a certain length of time. When IVA proposals are drawn up, we have to ensure the plan can be sustained for the whole 60 months and it therefore wouldn’t be in your best interest to use an income that could change or stop at any time.


Don’t forget you can find me on Twitter and Facebook

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