Could I do a DMP or is bankrupcy the best option?

charlie's_mum · 4 January 2007 at 10:01PM

I have spoken to Payplan about our situation and they have recommended that I and DH go bankrupt. We owe approx. £30,000 and if you include DH business debts as a sole trader (he is now employed), the figure is nearer to £40,000. Our available money at the end of each month, as worked out by PayPlan, is minus £65 - hence no money available to offer as a payment to debtors, and so recommending the bankrupcy.

The figures Payplan used for food etc were "government figures" and seemed a little high to me, so I guess some tweaking of these figures may give us small sum of money each month we could use - say £50. The Payplan lady did say though that for a IVA we needed at least £150 spare a month, which realistically is unlikely to happen.

I really don't want to go bankrupt. We took the loans etc out knowing what we were doing, and I want to repay the money we owe.

Is £50 enough spare cash to make repaying our debts a realistic option? Or do I accept that we are so heavily in debt, with no realistic way of repaying the money, that bankrupcy is the best answer?

All and any suggestions and comments gratefully received!

Thanks

justruth · 4 January 2007 at 11:30PM

Well that kind of depends on the number of creditors that you have and the sums involved. Bankruptcy while not something to aspire to might be your best option, no more debt. If you go for the DMP or an IVA, you then have years of payments with no forseeable end, and that is an awful place to be. I suggest you post a full statement of affairs on here with the actual figures so that we can see where you might be able to find the money, but I guaruntee nothing.

The end of the day, you have our full support regardless of which decision you make about your financial future x

CLAPTON · 4 January 2007 at 11:54PM

well, you owe 40,000 and can pay 50 a month?
that is without any added interest (unlikely) it will take (40000/(50*12)=
67 years

so is 67 years realistic? no

however without seeing a SOA its not possible to give any advise

charlie's_mum · 5 January 2007 at 10:05PM

Thanks for the encouragement, here are the figures as worked out by PayPlan:

income
husband 1100
me 450
but as I do locum hours, this can change each month - depends how many hours I do, but 450 is an average
child benefit 126 (worked out per month rather than 4 weekly)
child tax credit 400 (ditto)

giving a total income of 2077
which sounds quite a lot

expenditure
rent 600
life insurance 50
council tax 160
electricity 110 (we have had a key meter installed, paying back £8 per week)
oil heating 33
telephone 40
road tax/mot 36
car insurance 42
petrol 190 (depends a bit on how many hours I work, and therefore how often I have to drive to town)
housekeeping 460 (sounds a bit high to me - 2 adults 2 small children, apparently this is a 'government figure')
medical/dental/opticians 30 (don't pay this as we have an exemption)
haircuts 32 (don't spend that - probably £5 more accurate)
clothing 80 (haven't bought any clothing for donkey's years!)
tv licence 12
childminding 208
bailiffs for council tax 40 (they collect a total of 200 per month, in April this extra 40 will cease as we will have paid the arrears)

total expenditure 2142
surplus = minus 65

There are some things in there that we could cut down - such as the medical bit - but I don't know if we can decrease our outgoings enough to make a big enough difference.

On top of that lot:
Halifax joint loan 20,000
cahoot 7,500
lloyds 6,000
lloyds credit card DH 1600
lloyds credit card me 800
capital one card me 1500
overdraft cahoot 500
and 5 debts incurred by DH during his self employed days, totalling about 10,000.

If DH goes bankcrupt, Halifax will persue me for the joint loan: would my best bet be to go bankcrupt as well (not keen) or make an arrangement with the Halifax seperately?

All and every comment welcomed!

less2303 · 5 January 2007 at 10:15PM

Hi there,

No one can really tell what to do, but you can get alot of sound advice from some of the professoinal organisations, like Payplan. They are the professionals, and as such know what they are doing.

If you go the BR route, you may also be asked if you have sought professional advice by the Judge!

You need to weigh up that advice, along with the pro's and con's, and make your decision from there. I'm sure people here will help where they can as well.

I notice from your SOA that you are paying rent, so assume you dont have a property, which may make things easier for you with regard to the possiblility of losing you house.

chevalier · 5 January 2007 at 10:19PM

"housekeeping 460 (sounds a bit high to me - 2 adults 2 small children, apparently this is a 'government figure')"

First of all welcome. I am staggered that this is what the govt suggest! I spend about £800 a QUARTER with 2 adults, 2 children and 2 cats, and that is food AND petrol.

Do you know what you actually spend on food shopping? Could you go through your statements and find out, as this is a big area for saving money on.

If you keep a spending diary then you both keep a spending diary, then you will be able to see if there is anything you are unthinkingly buying, that you could stop and save money easily.

We too have oil heating. Have you tried https://www.boilerjuice.com? This is a website that helps you buy getting you and others in your area together to all buy oil at the same time and get a discounted price.

Is your car insurance for one or two cars. If for one, it is very high, I have just trimmed mine down from £330 a year to £221, and we have 3 drivers on my policy (one of whom is over 75 so gets weighted against the cost). But that is still less than £20 a month. And if you go through https://www.quidco.com, you could get cashback on taking out the policy.

Could you car share to get the petrol costs down, or cycle if work is not too far? A bit drastic maybe, but it would certainly help!!:D

It seems to me that if you could get through to April (when the bailiffs money stops), and taking some cost cutting measures, then you could have money to offer in a DMP.

Best of luck
chev

CLAPTON · 5 January 2007 at 10:57PM

yes, looking at the SOA, bankruptcy gives you an opportunity to start all over again.
I can see nothing that says its a bad idea. But obviously you will have to live with the downside which is mainly the difficulty of getting credit but then why would you want that again.
You might want to look at your tenancy agreement to see if bankruptcy is a problem.

charlie's_mum · 8 January 2007 at 12:59PM

Thank you all for your help, I will squeeze the figures a bit and come back on a new thread for further advice.

Charlie's mum

CLAPTON · 8 January 2007 at 1:15PM

what do you mean when you say the baliffs collect 200 per month but you only list 40 in the budget?

also although i appreciate that there are saving to be made (food as every has mentioned) you must remember that you have to live on the budget for years and years...so are you really never going to spend anything socialising , never take the kids on a modest holiday, never take them on little trips during the holidays..you dont say what age the kids are but will they ever want to do any activities, school outings, never have to replace an appliance or never have a major car repair. You say you spend very little on clothes but will the kids need school uniforms, shoes etc in a couple of years time.
CCCS/Payplan figues are often generous for some things but then again lots of things are left out...think about creating two SOAs....an official one for your creditors that allows all the 'official' figures and a real one that you think you can live on for many years to come.

rog2 · 8 January 2007 at 1:41PM

charlie's_mum wrote:

Thank you all for your help, I will squeeze the figures a bit and come back on a new thread for further advice.

Charlie's mum

No need to start a new thread cm - we'll keep checking this one, so post away. I have read the replies and, although I have nothing specifically different to add, I just thought you might be interested in having a quick look through the Bankruptcy Club thread, where many of your questions will be answered, and most of the pre-conceived ideas about bankruptcy will be dispelled.
We're on your side cm.
Cheers

Could I do a DMP or is bankrupcy the best option?

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