bankruptcy approved, tax change ?

[missk]

I've just had my bankruptcy approved and have been told that my tax will become zero for 12months and I will have to pay this to my creditors instead - is this a law change?

[mish1953]

I was told the same thing , but the money is paid to the OR (trustee), in effect you are given a zero tax code but you dont get any advantage from it.
It might take a couple of months to happen and its only until the end of the current tax year - so not quite 12 months .
It also means your employer has a damn good idea of whats happening .

Slainge
Mish

[missk]

Great thanks - I just hadn't come across that before. To anyone else considering this route - I highly recommend it - from being expected to pay £800 p/month through an IVA for 5 yrs to £260 p/month via bankruptcy for 3 yrs - i can finally sleep at night. Best thing is the bankruptcy is only for 12 months and if my salary goes up (or down) after that, the amount remains the same. The process is complicated and a little scary, but definitely worth it.
MissK

[lily]

Well done

I hope that you enjoy your new debt free life.

lily

[missk]

Thank you - it will certianly be a lote better than my previous credit full one!