Should I Just Go Bankrupt?

flis21 · 1 March 2006 at 3:17PM

Hi all,

My husband and I have been having a lot of financial problems for a couple of years. Last year we went to CCCS and they suggested an IVA. We have been paying into the IVA for about 9 months now. However I have been really ill recently, my work are about to stop paying me, so I will be on SSP. As such I will not be able to keep up my IVA payments (which are £326 per month). I am looking at getting a new job, as my illness is in part caused by my job, but if I do get a new job it will be at a much lower pay than what I am currently on, so probably won't be able to afford the IVA payments at the level they are at.

Am having problems at the minute as I have had a few unpaid direct debits and some cheques that have gone through when they shouldn't, so my bank are slapping charges on me left right and centre. I really feel like I am drowning and don't know what to do and all this worry is not helping me get better (i am suffering from severe depression and anxiety!).

Does anyone have any advice? What happens if you just go bankrupt?

Please help and be gentle with me, I am in a very fragile state.

IN_LIKE_EVERYONE_ELSE! · 1 March 2006 at 3:43PM

Do you own your home?

dudleyboy · 1 March 2006 at 3:50PM

so how much are you in debt?

jitsuguy · 1 March 2006 at 3:53PM

Hi flis21,

We really need your full statement of affairs (thats all your income and outgoings) so we can see if you could make cut backs elsewhere.

Jitsuguy

ReportInvestor · 1 March 2006 at 3:54PM

Debt Advice Bureau

Pros and Cons of going bankrupt

You would certainly lose any equity in your home or other significant assets.

Debt_Free_Chick · 1 March 2006 at 3:54PM

You may have no choice in the matter. If you cannot continue to meet your IVA repayments, then your IP has no option but to make you bankrupt.

There's a quick guide to bankruptcy from the National Debtline here and the official, comprehensive guide from the Insolvency Service here.

If you have specific questions, post them here as we may be able to help.

flis21 · 1 March 2006 at 4:17PM

I don't own a house, we rent at the minute. We also do not have a car. I don't know if they can repossess our other assets, but there's not much. Just the usual furniture, tv, video, dvd player, home computer etc.

Statement of affairs is difficult, as my finances are all in with my hubby's. He is managing to stay afloat at the minute, so it is just me who is drowning. He is in an IVA as well though, maybe we should just both go bankrupt and get it over with, wipe the slate clean sort of thing.

My salary was £19,500, but at moment have started to get SSP, new job I am looking at taking has a salary of £12,000, so quite a big step down. I have changed our providers for everything at home that I can (electric / gas etc.). Tried to change the phone, but because of our credit problems Post Office Home Phone wouldn't accept us. We can't change the internet as we are in a contract until August.

Rough workings out:

Outgoings:
My IVA - £329
Husbands IVA - £376
Rent - £650
Council Tax - £115
Water bills - £10.22
Electric - £20
Gas - £15
Home Insurance - £12.69
Specsavers - £15.50
BT - Phone & internet - £45
TV Licence - £10.99
Food - £160
OH's Fags - £100
Toiletries etc - £30
Hair Cuts - £25
Prescriptions - £20
Clothes / Shoes etc. - £50
Birthday / Christmas / Easter etc. - £30
Money owed to parents - £25 (I pay this back to them monthly)
Holiday - £77

Total - £2,116

Previous take home pay (for both of us) was: £2,200

Now gome onto SSP, last month was only a week of SSP with 3 weeks normal pay, but next month will be 4 weeks SSP, so not sure how we are going to manage.

Our total debts were in the region of £45,000 (between the two of us) when we took out the IVA. I also have a student loan which comes straight out of my pay.

We were struggling but would have managed if I hadn't been ill.

Any advice would be gratefully received.

KatrinaC_2 · 1 March 2006 at 4:37PM

flis21 wrote:

Rough workings out:

Outgoings:
My IVA - £329
Husbands IVA - £376
Rent - £650
Council Tax - £115 If you are on SSP, have you checked that you are not entitled to help with council tax bills? It's unlikely, but worth checking
Water bills - £10.22
Electric - £20
Gas - £15
Home Insurance - £12.69 Have you checked to see whether this is the absolute cheapest policy?
Specsavers - £15.50 Is this for contact lenses? If so, move to glasses as they are a one off cost.
BT - Phone & internet - £45
TV Licence - £10.99
Food - £160 Try cutting back on food - even if you only manage to save £10, you really need to save as much as possible. Try looking at the Old Style Message Board
OH's Fags - £100 Try and get him to quit! If he refuses, make him get hand rolling tobacco
Toiletries etc - £30 I don't know what you class as toiletries, but try cutting back on this too. I spend about £10 a month on toiletries for three of us by going to Wilkinsons and Savers
Hair Cuts - £25
Prescriptions - £20
Clothes / Shoes etc. - £50
Birthday / Christmas / Easter etc. - £30
Money owed to parents - £25 (I pay this back to them monthly) Could you put a temporary halt on this if you explained the situation?
Holiday - £77 Can you really afford to go on holiday given that you're facing a substantial drop in salary?

You don't seem to have a massive amount to cut back on - sorry I couldn't be more help

Kat

flis21 · 1 March 2006 at 4:41PM

KatrinaC wrote:

You don't seem to have a massive amount to cut back on - sorry I couldn't be more help

Kat

Hi, Thanks for the reply. I could try cutting back on toiletries and food a bit to see if that helps. I knew what everyone would say about the holiday, but we have already paid over £400 and only have 2 more payments left. We don't need much spending money as it is half board and it was the cheapest holiday we could find. I really need something to look forward and for just two more payments I really want to have our holiday. Also we would not receive the money back that we have already paid out, so that would be throwing away over £400 which I really don't want to do.

Sorry, i know I protest too much, but we didn't have a holiday at all last year so promised ourselves we would go on a cheap holiday this year.

F

KatrinaC_2 · 1 March 2006 at 4:48PM

flis21 wrote:

Sorry, i know I protest too much, but we didn't have a holiday at all last year so promised ourselves we would go on a cheap holiday this year.

F

My last holiday was in 2001 when I went to visit a Danish friend for a week. The whole thing cost less than £200, including taking him and his housemate out for dinner to thank them for hosting us. Before that was sometime in the 1980s (1982?) when my mum scraped together enough to take us to Butlins.

I know it seems like you are throwing £400 away by not going on the holiday, but holidays are really not an essential and if you do go then you are throwing away the rest of the payments (not many left, I'd have thought) plus the spending money.

It's up to you - personally I think that it's money you don't need to spend, but I'm sure there are others who will see it as a way to re-energise so that you can come back fighting.

Kat

CLAPTON · 1 March 2006 at 5:04PM

Not much maybe but BT/Internet can be reduced
BT line about £10.5
Broadband easily find at £14.99
use call1899 for calls ...charged at 3p per call (not per minute ) to landlines so should save at least £10 per month.

I dont know what SSP is but
-you cannt aford 100 for cigarettes...roll your own is cheaper, you can't afford £50 for cloths, you can't afford a holiday
Can you find somewhere cheaper to rent?

Sadly want/need is not the issue... afford is the issue.

If you don't pay the IVAs you will be made BT so it may be inevitable.
At least you will have a clean sheet to start over again.

Should I Just Go Bankrupt?

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