Is bankruptcy the right option for me?

LOUISE22_2

Hello everyone, I first posted on the debt free wannabe site, but I have been advised to post on here. I am looking for your opinions. I am 26 and this is my situation:

Hello, I am looking for some advice about my current debt situation. I am currently with payplan on a debt management plan with my husband. We owe £43921.78 and we have a £113000.00 mortgage and a £16000.00 secured loan and we also pay £278 a month for a £14000.00 loan a friend took out for us to help. I know oh dear, its a devestatingly high amount of debt. I am 26 and my husband is 30. This is our monthly budget that pay plan have set for us.

My Earnings (net)£1327.22 per month
Partner's Earnings (net)£1422.88 per month
£856.00 per month
Secured Loans (2nd Mortgage)£278.00 per month
Council Tax £154.50 per month
Mortgage Arrears £144.00 per month
Ground rent & Service Charge £35.00 per month
Gas£30.00 per month
Electricity£40.00 per month
Water £50.00 per month
Hire Purchase (Car worth £2000/2300) £102.00 per month
TV Licence £11.61 per month
Telephone(s)£40.00 per month
Work£40.00 per month
Road Tax/MOT £20.00 per month
Insurance£25.00 per month
Petrol/Oil/Diesel£86.67 per month
Maintenance£30.00 per month
Food£320.00 per month
Clothing/Footwear£40.00 per month
Dentist/Prescriptions/Glasses£15.00 per month
Pets £25.00 per month
Hairdressing£16.00 per month
TotalAmountAvailable Surplus £391.32Income


We both have 2nd jobs but as they are not guaranteed income, Payplan have left them out. I think also because of the loan with the friend which I was desperate to keep paying, they have not taken the 2nd jobs into account. We have an extra £100 after we have paid this loan. My husband owes his Dad £5000 and he usually gives this to him, even though I disagree with it, because we desperately need it to be going elsewhere. Anyway, the above budget looks OK in principle, but in the time we have been on it its not worked out like this because we both have these damn pay day loans that we keep refinancing which I have one for £300 and my husband one for £100 so this keeps messing us up everymonth and not only that its costing £40 quid a go everytime we do this. This month, we literally had no food and its not been the first time. I have been trying to deal with our debts since my early twenties and I just have come to the end of the line, I sick and poorley with it all. Its getting me down so much, I cry all the time as soon as I away from people, I have been to counselling and sometimes I just want to give up.I just dont know how long I can keep living like this, I feel the whole of my youth has been spent on trying to get by. I have nearly finished getting the house ready to sell, because we cant afford to keep it. I dont know if it will sell in todays market and where we will even get the fees for the Hip pack etc. My relationship is in a mess too, we hate each other all the time, but we are trapped together in this one bedroom flat because we dont have any money to go anywhere else. My problem is I want to leave my husband, all the stress over the years have played a massive part in our relationship and I feel very bitter towards him these days and feel I want to be on my own. But I dont think I can afford to go anywhere because of the mortgage and joint debts etc. I did the CCCS thing online and it came up with the debt management or bankruptcy, I feel I am ready to face going bankrupt, and my husband agrees and he knows it will make him bankrupt, but i think we are so desperate to feel better, the thought of going bankrupt doesnt seem that bad anymore than how we feel now. I am now more scared of not getting accepted and also we are struggling to keep up the the mortgage, we are on a suspended order and in negative equity. what should I do??

NekoZombie

Hi Louise

First thing - welcome to the board.

Second thing - your post is very confused. I had a look at your SOA and a surplus of nearly £400 seems o.k. However, throughout your post you note other debts that you appear not to have included in your SOA. It will be very difficult for you to get an accurate picture of your finances unless you write absolutely everything down. I suspect that once you do your £391 surplus will quickly become a negative figure.

BR is definitely an option, and not necessarily something you should be too frightened of. I went BR in March 2007 at age 28. I owed nearly 40,000 in debt. Despite this I received early discharge and have not looked back once. My life is so much simpler and no more letters demanding money come through the door.

I suspect that once you sort out your finances, your relationship with your husband will probably improve too. The amount of stress that screwed up finances can but on a relationship cannot be exaggerated - I certainly remember reading that the thing couple argue most about is money.

Rich will be able to help you in terms of couples going BR - I think also Scarlett and quite a few others. The important thing to remember is we are all here to help and will answer your questions / give advice where we can.

Once again, welcome and congratulations for taking the first step.

philnicandamy

previous post here if it helps

http://forums.moneysavingexpert.com/showthread.html?t=1059429

LOUISE22_2

Hi NekoZombie, the list of payments is the one pay plan set up for us and we pay £391.32 to them which is shared out amongst our creditors. Pay plan didnt take into account the pay day loans, which we have been juggling each month, and having to re-finance to pay Pay plan. So there is 1 for £300 and one for £350 and one for £100 and they cost nearly £80 in interest for each. So the repayments are more. I am also behind 3 payments to ford and was behind to the gas who we had a man knocking on the door, so this month i had to pay out double to them, but i havent enough to pay ford and pay plan. I just am so tired of it now. Does anyone know what I mean when I say I honestly do not know what a normal month is because I have been behind on repayments for so long, I never use the wages correctly because if i pay something another one doesnt get paid and it goes on...

welshpaula

hiya i do understand how you feel we have all been there in one way or another ! i went bankrupt 3 years ago for me it was the only way forward and even though i was terrified at the time i havent looked back i have a new bank account with a debit card with no credit whatso ever ,i dont want it ! it was a fresh start for me personally after a bad time in my life ! i am not qualified but i would think its prob the best option for you all to make a fresh start be it together or apart !take proper advice first as if you decide on bankruptcy the judge will ask if you took advice first ? if you have any questions about bankruptcy please feel free to pm me and i will try and help good luck paula x

LOUISE22_2

Oh thank you for the kind welcome too! i forgot to say. sorry if i sound grumpy just so so down today

LOUISE22_2

Thanks Paula!!! I do too, thats what I really want a fresh start. Its just affecting every area of my life now, work and home and realtionships, friendships, family - it just seems to be swallowing me up! I desperately need it to end. Do you mind me asking what in the end pushed you too apply for Bankruptcy and did everyone at work find out? x

LOUISE22_2

List of debts

Tenon Recovery (Royal Bank of Scotland) £25470.37 (joint unsecured loan)
Barcalycard £330.58 (my credit card)
EOS Solutions plc (OLI catalogue) £488.86
Royal Bank of scotland (Natwest) £3855.10 (husband old bank overdraft)
Next retail £1596.54 (my store card)
Natwest credit card £2282.98 (husband credit card)
Citi Financials £3554.85 (joint unsecured loan)
Moorcroft £152.78 (BT bill in my name)
Apex credit management £5218.18 (cahoot loan) unsecured in my name
Link Financials £971.54 (debenhams store card) Husbands name
Abbey National £15000.00 (in my friends name) I pay £278 a month to her
Payday loan £350
payday loan £300
payday loan £200
£50 at pawn brokers on a ring
in arrears with gas, electric, water and council tax
Ford car credit in my name £2000 £101.00 a month

MammaCas

Hiya and welcome

You will get lots of support and help on here. Have you made an appointment with CCCS? That's what I did and then basically we did this (however, our house was in negative equity,not sure about yours)

stopped paying mortgage and secured loan and all other debts Nov 2007
saved enough money by also selling a vehicle for 6 months rent upfront and BR fees
put our names down on Housing Association list
privately rented from Feb 2008
both went BR on March 29th 2008
were extremely lucky and got a housing association house, so we have moved twice in 6 months :eek:

It isn't easy. The making the decision and starting the ball rolling is the hardest bit. Once you've filled the forms in, gone to court and spoken to OR................that's it really. You will be debt free.

I do feel guilty from time to time that I couldn't pay my debts. But I lost my house.........paid the ultimate price really.

However I have to say I am happier than I have been in years. No confusing statements, no juggling money, no ignoring the phone :rolleyes:

Good luck. Get the advice you need and then take control. Its amazing how much better you will feel.

MC x

MammaCas

Sorry, also meant to say, we handed our house over to the mortgage company and they did a 'quiet repossession'. It took months....

Also, you need to get advice about the loan your friend took out for you, not sure how the OR would deal with that.
MC x

LOUISE22_2

Hello, thanks for the message. Yes we are in negative equity too - the secured loan mean so. How did you know that you should hand over the house, do you have to do that if a sale wouldnt cover the mortages etc? I am confused about the order in which i should be doing things. I have opened a Lloyds TSB cash account which I am running OK - no debt to them or credit facility, but do I have to open another one now? i am running out of banks!! I was with the cooperative but they shut it because I went over by mistake in the first 2 months, £4... oops. well i think thats why they shut it.