Author Topic: HELP!!! 2nd time around but how does it affect my wife's finances  (Read 1809 times)

doingitagain71

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Hi
 
My wife and I applied for separate personal bankruptcies back in Sept 2005 and we were discharged in March 2006.  Stupidly here I am again with debts I cannot pay.  I am on Incapacity Benefit and DLA and am unlikely ever to work again (aged 39).  I have 3 debts in my name amounting to approximately £10,000 - £10,500 and I want to know how my wife's income (which includes Incapacity Benefit, DLA, Child Tax Credits and Family Allowance) is incorporated into my finances when completing the documentation.  I know you have to complete the budget information but in our household everything goes into the bank the bills are paid and what's left over is shared for family living expenses.  I recently had dealings with Payplan who convinced me that given my circumstances I could apply for a Debt Relief Order and advised me to stop paying my creditors.  Since completing all the documentation they have decided that we have too much left over and can still afford to pay even though it was a application in my name only, the budgeting amounts were just ridiculous.  A few months ago we were making the payments and weren't behind but it was a struggle now we are months behind thanks to the bad advice from payplan and don't really stand a chance of ever catching up.  The letters are coming thick and fast and we are at a loss as what to do.  We are in rented accommodation and my car is a lease car through motability so I know they aren't assets.  I really need to know what they use to calculate any repayments do they take my wife's benefits into account? ??? ??
 
HELP!!!! :-[

James Falla

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Re: HELP!!! 2nd time around but how does it affect my wife's finances
« Reply #1 on: Nov 19, 2010, 01:28:16 PM »
Hi there doingitagain71
 
Generally speaking you cannot ignor your wife's income if you apply for a debt relief order or bankruptcy. If you want to keep the two income's seperate, you can do this but you will still have to declare how much other members of the household contribute to the household expenses.
 
What you need to do is work out how much your income is as a percentage of the whole household income. You would then be expected to pay for a similar percentage of the household expenses. eg if your income is 50% of the household income, you should pay 50% of the household expenses. After that, anything you have left over would be classed as your disposable income and possibly available for your creditors.  Anything your wife has left over is hers to keep.
 
Having said that, if you and your wife's income is made up solely of benefits and you declare bankruptcy, it is extremely unlikely that you will be asked to make a payment towards your debt even if you have a disposable income on paper.
 
The one thing to be aware of though is that as you are declaring bankruptcy for the second time, the OR may decided that it should last longer. Possibly for three years.
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