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  • FIRST POST
    • Teddyuk85
    • By Teddyuk85 19th Sep 16, 11:02 AM
    • 24Posts
    • 7Thanks
    Teddyuk85
    Is BR for me?
    • #1
    • 19th Sep 16, 11:02 AM
    Is BR for me? 19th Sep 16 at 11:02 AM
    Hi everyone,

    I could really really do with some advice as I am constantly thinking about this.

    I have gotten myself into a right mess financially from being stupid over the years.

    I have the following debts

    Loan that ends next year with £3800 outstanding

    Loan with £12500 outstanding for another 4 years

    Credit card with a balance of £9500

    Credit card with £2700 on it

    Credit card with £1900 on it

    My car which has 1 years finance left on it £120

    And finally I pay my mum £320 a month for £11000 she lent me.

    My payments equate to over £1300 a month.

    With my line of work I get a bonus some months, however when I don't, my wage does not over my outgoings (including rent, bills etc) and o rely on money that my partner gives me to cover half the household bills. However if I get paid my basic salary that leave me with £50 a week to live off, for food, petrol etc etc.

    I am on a good salary, just short of 30k a year and my partner works part time but takes on extra hours where possible.

    I really don't know what to do.

    I am registered diabetic, and I am worried they will tell me I can't have the gym membership (£20 a month) or take my car away which I rely on for work. My car is worth less than £2000 but would they take it away with a years left on the finance?

    Also I was wondering what amount they would consider to leave me with to live on after being accepted for bankruptcy? What is the norm? As I'm on a good wage I don't know how it would work?

    Would you consider my case as a BR case?

    I would appreciate any help were possible. Part of me thinks wait a year until one of my loans is clear and my car is paid as it frees me up £400 a month but it's really a struggle at the moment that I cannot have any sort of quality of life on the money I am left with.

    Plus it worries me my health will be affected being diabetic?

    Any advice is appreciated
Page 1
    • worriedmamma
    • By worriedmamma 19th Sep 16, 11:23 AM
    • 93 Posts
    • 32 Thanks
    worriedmamma
    • #2
    • 19th Sep 16, 11:23 AM
    • #2
    • 19th Sep 16, 11:23 AM
    Hi there

    Firstly, take a deep breath. You aren't the first or last person to be in trouble financially. I would recommend you visit StepChange or National Debtline websites or call them, they would be able to look into your income and expenses and work out the best way to manage your debt.

    With regards to a car, I believe at the moment you get a £1000 car allowance, but each case is different so would depend on your specific circumstances.

    As your debt is over £20k, bankruptcy would be the way to go, if it was under £20k there is a Debt Relief Order which is sort of a mini-bankruptcy.

    However it really depends on your actual income and expenditure and your living arrangements etc.

    I really would urge you to contact StepChange or National Debtline, I found speaking to them so reassuring and I've felt a weight lifted since beginning to take control. Best of luck.
    • Flyright
    • By Flyright 19th Sep 16, 1:20 PM
    • 277 Posts
    • 151 Thanks
    Flyright
    • #3
    • 19th Sep 16, 1:20 PM
    • #3
    • 19th Sep 16, 1:20 PM
    You would not be permitted to pay anything to your Mum if you went bankrupt as this debt would also be included in the bankruptcy.
    Last edited by Flyright; 19-09-2016 at 1:43 PM.
    • Teddyuk85
    • By Teddyuk85 19th Sep 16, 2:48 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    • #4
    • 19th Sep 16, 2:48 PM
    • #4
    • 19th Sep 16, 2:48 PM
    Hi there,

    How would that work!?

    If my mum has taken a loan for me but in her name, it is not included in my costs. So would I be allowed to continue paying my mum.

    I am a bit confused about that
    • Flyright
    • By Flyright 19th Sep 16, 3:08 PM
    • 277 Posts
    • 151 Thanks
    Flyright
    • #5
    • 19th Sep 16, 3:08 PM
    • #5
    • 19th Sep 16, 3:08 PM
    If your Mum took out a loan in her name then it is her debt, legally. You will not be allowed to make payments to cover your mother's debt (irrespective of whether she incurred it to fund something for you) if you went bankrupt. It is not your debt.

    In bankruptcy, any spare funds you have after paying your essential expenses (a payment to your mother's debt will not be considered essential expenditure) will be claimed via an IPA.
    Last edited by Flyright; 19-09-2016 at 3:12 PM.
  • National Debtline
    • #6
    • 19th Sep 16, 5:03 PM
    • #6
    • 19th Sep 16, 5:03 PM
    Hi Teddy


    I just wanted to back up what Flyright is saying here. It doesn't matter that you may have been the "beneficiary" of your mother's loan, I'm afraid - she is still seen as being the only person liable to repay it and so you would not be allowed to maintain repayments to her if you went bankrupt.


    Either way, the current state of affairs can't continue as you can't try to maintain monthly repayments of £1300 on a £30K salary. Please take worriedmamma's advice to contact one of the debt charities as she too was very anxious about things before getting some expert guidance.


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Teddyuk85
    • By Teddyuk85 19th Sep 16, 10:07 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    • #7
    • 19th Sep 16, 10:07 PM
    • #7
    • 19th Sep 16, 10:07 PM
    Thanks for all the advice.

    So basically I cannot go bankrupt without leaving my mum with a debt.....

    Would I not be able to explain and still make payments at all?!?!

    If not it looks like I'm going to have to somehow continue as I am and end up in even more of a mess down the line....
    • Flyright
    • By Flyright 19th Sep 16, 10:21 PM
    • 277 Posts
    • 151 Thanks
    Flyright
    • #8
    • 19th Sep 16, 10:21 PM
    • #8
    • 19th Sep 16, 10:21 PM
    No, your Mum's debt was incurred by your Mum and there is no way any OR will allow you to continue making repayments to her when that amount could be claimed as part of an IPA to benefit your bankruptcy estate.
    • Teddyuk85
    • By Teddyuk85 19th Sep 16, 10:47 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    • #9
    • 19th Sep 16, 10:47 PM
    • #9
    • 19th Sep 16, 10:47 PM
    I'm sorry if I sound stupid, but what do you mean by "claimed as part of an IPA" ?? What's an IPA
    • tigerfeet2006
    • By tigerfeet2006 19th Sep 16, 11:02 PM
    • 13,681 Posts
    • 29,765 Thanks
    tigerfeet2006
    An IPA ( individual payment agreement) is when any surplus income after your reasonable living costs have been agreed by the official receiver is paid to the insolvency service.

    Please ring National Debtline or Stepchange and let them go through your circumstances with you. They may come up with other options for helping you keep your head above water. Please don't panic just yet.
    BSCno.87
    The only stupid question is an unasked one
    I now live in a country that is 4 hours ahead of the UK so you may now find I post at weird times
    [/COLOR][/CENTER]
    • Teddyuk85
    • By Teddyuk85 19th Sep 16, 11:05 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    Thank you I'll give them a call tomorrow and let everyone know how I got on
    • Teddyuk85
    • By Teddyuk85 21st Sep 16, 7:36 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    Thanks to all of you for your advice.

    I've been recommended a DMP.

    On paper it works for me. However I am worried if the creditors turn around and don't agree....what's the implications of this.

    I am scared it means so much I don't know what would happen
    • dundermifflin
    • By dundermifflin 22nd Sep 16, 12:43 AM
    • 29 Posts
    • 6 Thanks
    dundermifflin
    It is very rare for creditors to refuse payments offered in a DMP. As long as you don't favour one creditor over others, then you will be fine. The payment you make to the debt management company/charity is then shared out pro-rata to the size of the debt.

    For example, if you paid £100 for your DMP each month, and you had £10k total debt which included a credit card that owed £5k (50% of your total debt), and two loans for £2.5k (25% each of your total debt), then the credit card company would get £50 (50%), the two loan companies would get £25 each.

    Don't worry at all, most creditors are used to DMPs, it's not something new or unique. As long as you keep up the payments, and you've offered a reasonable amount to them through the DMP company/charity then there's no reason why they would refuse it.

    Just be aware that (as far as I remember), there is no legal obligation for creditors to freeze interest (although most will freeze interest at some point whilst you sort things out with your DMP).
    • mwarby
    • By mwarby 22nd Sep 16, 7:17 AM
    • 523 Posts
    • 197 Thanks
    mwarby
    In a DMP are you going to treat all creditors equally, including your mum ?

    If not I can imagine the other creditors not being to happy. I'm not 100% but if this failed and you went bankrupt the OR would possibly seek the preferential payments made to your mum back
    • Teddyuk85
    • By Teddyuk85 23rd Sep 16, 6:39 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    Unfortunately in my financial situation I don't really have a choice.

    I have just prepped all my DMP details to be sent off.

    I just have to hope for the best really.
    • Teddyuk85
    • By Teddyuk85 23rd Sep 16, 6:40 PM
    • 24 Posts
    • 7 Thanks
    Teddyuk85
    Also I forgot to mention, my loan to my mum ends in 15 months. The advisor at debt change just told me this payment would then be put towards my creditors once I have paid her.
    • fatbelly
    • By fatbelly 23rd Sep 16, 6:59 PM
    • 9,878 Posts
    • 7,406 Thanks
    fatbelly
    A dmp does sound like the way forward for you. But review everything in 15 months.

    I was also a bit concerned about the car. If it's on HP it's not yours and in bankruptcy you would probably lose it unless a third party picked up the payments.

    The dmp can be built around that as it's a less formal solution. In 15 months the car will be yours, you will have less debt, more surplus income and you can look at everything again.

    I doubt bankruptcy will be your best strategy even then but it will be worth looking at
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