drowning in debt and facing the inevitable

wylie71 · 23 May 2016 at 7:59AM

Hi all,

after months, in fact years of avoiding it I am finally at the point where bankruptcy is definitely looming.

My outgoings are more than my income and excluding student loan and a few other debts that cant be written off my total debts with loan, o/d, cc's and catalogues is around 33k!!!

Most are to my bank barclays with 16k loan, 8k cc and 3k overdraft despite my income after tax of around 1600 after commuting costs (I commute into central london) and before bills. I know its my fault but they just kept upping my limits etc and I stupidly thought I could afford them and all would be ok. just shows you that a salary of 32k sounds ok but doesn't go far these days!

I am a single dad or should I say was as my youngest just turned 18, all 3 live with me in a housing association property. I dont receive any benefits and 2 are in employment now although both were laid off earlier this year so my finances were pushed even further.

What worries me is regarding my wages, bank account and bills. I think I am just about coming to terms with the inevitable but not sure on what to do before applying. My council tax and utilities are on meters/payment card so no issue there.

can I get a basic bank account now or do I have to wait? What can be classed as reasonable income to include from my 2 children that work?

I have to confess to being a bit clueless about all this and really dont know where to start so probably just panicking a bit at this time. I am basically living on credit and it will run out v soon!

Also how long does the process take? the sooner I can get the monkey off my back per se the better. Its making me ill and definitely taking its toll daily.

Many thanks in advance :T

banksshouldworry · 23 May 2016 at 9:58AM

£33k in debt? I was over £84k in debt before finally facing the inevitable and going BR a couple of years ago. It was the best thing I ever done.

First thing, get some FREE impartial advice on whether BR is right for you. I used StepChange.org and they were great. Call them free on (0800) 138 1111 to set up a call with a qualified debt counsellor.

I wasted over 4 years of my life resisting the inevitable BR. I should have bit the bullet much earlier but didn't. Now, I'm debt-free (apart from student loans and my mortgage) and no longer get hassled by debt collectors or the banks and credit card companies.

So get your call set up and then good luck with whatever you decide. Things will get better for you.

- banksshouldworry

tibawo · 23 May 2016 at 10:12AM

I think the hardest point is realising you are in debt and need to do something before the stress etc takes over your life. It doesn't matter the amount, it's the fact you just can't afford to pay it.

Well done on realising this as i think this is the hardest part. Do get some free advice , these people don't judge you and deal with it on a day to day basis so kind of reassure you that you are not the first and won't be the last.

I went down the IVA route as it suited me better. Good luck on your journey.

wylie71 · 23 May 2016 at 2:12PM

thanks, I have contacted stepchange just now and also opened a flex basic account to move wages and priority debts to next month. Hopefully it wont get frozen if/when I do become BR

I currently have zero arrears on anything, if I miss say a loan and cc payment (to cover cost of BR) I assume apart from the hassle from the bank it wont make much difference as hopefully going BR anyway

Now to get all my info in order. bricking it but also feeling slightly better already

tiggerbodhi · 23 May 2016 at 4:19PM

Agree with Banks, you could be throwing good money after bad, BR is not the end of the world but the beginning of being back in control.

If you miss payments they will chase you and hassle you for them, but it is all words and very little action other than your credit file trashed, but it's going to be by any debt "solution" BR or IVA, paying "token payments" of a £1 a month keeps them quiet for longer, all the debt if unsecured including arrears goes into BR.

For me it was a good six months before they even get anywhere near "heavy" but even that was passing them onto debt collection agents, the strategy for these is don't engage other than by letter, if you can change your phone number do so now and don't update them, only ever call with your number withheld, if they call you get the security questions wrong, that really phases them!

Once you stop paying them don't use you credit card, the OR can take a dim view of that.

Good luck with whatever way you chose.

wylie71 · 23 May 2016 at 4:30PM

well I have spoken to step change in more detail and as my finances are changing in 2 months time they suggested a token payment plan. The trouble is it is reliant on my kids paying board if one thing messes up once that is finished I am back to square one.

I have been advised to cancel DD's today (apart from priority debts), this is really daunting as I am really dreading all the aftermath also should I withdraw my wages on friday and put into my new account when opened? (approx 10 days according to nationwide).

I am trying to remain upbeat but know it might well be a messy few months ahead

National_Debtline · 23 May 2016 at 5:07PM

Hi wylie and welcome to the forum.

Well done on not only acknowledging your situation, but also doing something practical about it by contacting Stepchange.

wylie71 wrote: »

well I have spoken to step change in more detail and as my finances are changing in 2 months time they suggested a token payment plan. The trouble is it is reliant on my kids paying board if one thing messes up once that is finished I am back to square one.

I have been advised to cancel DD's today (apart from priority debts), this is really daunting as I am really dreading all the aftermath also should I withdraw my wages on friday and put into my new account when opened? (approx 10 days according to nationwide).

Yes, you should move across your money to the new Nationwide account at the earliest opportunity.

The main "aftermath" you are likely to encounter while all this is going on will be a lot of correspondence from creditors - arrears notices, reminders, demands etc. You should bear in mind that much of this (if not all) is automatically generated and will follow a set pattern, so remind yourself that what you are doing is for a very good reason.

I am trying to remain upbeat but know it might well be a messy few months ahead

As above - it doesn't necessarily need to be "messy". The letters you may get from creditors will not be anything that Stepchange, we and others here won't have seen many times before. If bankruptcy turns out to be the right route, you'll be able to put these debts behind you no matter how much they might pester you in the meantime. Good luck!

Dennis
@natdebtline

tiggerbodhi · 23 May 2016 at 5:12PM

No need to withdraw your wages, just make sure you cancel the direct debits to non priority debts, then move all the priority ones to your new bank account once your wages go into it.

It is a bit daunting, but does come clear in the end, once you make a token payment your credit file starts to suffer and calls may start, but stay calm, if you do speak to them just tell them you cannot afford to pay them, don't get bullied into making higher payments than you can afford or want to, they will not pursue you to court for many many months despite what they tell you, its not in their interest to go this far as they can no longer hassle you for payment, interest and charges are frozen once it has gone to court.

IMHO it is best not to speak to them other to write to them and tell them you are making token payments because of your financial situation, if they phone don't engage.

wylie71 · 23 May 2016 at 5:16PM

many thanks for the words of encouragement

I guess at the end of the day it is what it is and either way there will be some inconvenience regardless, either through being skint and owing loads or being skint but able to sleep at night knowing the main bills are paid on time every month

wylie71 · 24 May 2016 at 7:23AM

quick question. I have cancelled all my borrowing DD's and printing and posting all letters in the next 48hrs with regards token payment. My payments arent due until the 1st, am I OK (or should I say within my rights per se) to use my cc's, OD over the next week before they become 'in arrears'? I dont mean for gratuitous things but shopping etc as until I get paid and transfer wages to new account its my only access to any type of funds at all.

tiggerbodhi · 24 May 2016 at 8:54AM

Morally possibly don't use them, but you have to live, it is unlikely the OR will be upset by it, you are doing nothing illegal if that's the question!

drowning in debt and facing the inevitable

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