Should I go bankrupt? What would you do?

moonklash

Hello there,

Should I go bankrupt? Yes, that's a question I know has been asked a million times before, and I also realise that only I can decide the answer. However, I've been struggling with debt for years, I'm forced to live with my parents because I' can't afford to move out. I've done lots of research yet I'm still unable to decide if I'm elligible to go bankrupt and if it's a good idea. So now I'd love to get other peoples opinions and advice.


The debt came from various places - silly spending while I was younger, a couple of holidays, learning to drive, buying my first car, driving an hour to work and an hour home, joining a gym, general living costs, etc.

In 2007 I took out a loan to combine my credit cards, however I still ended up having to spend on them. I always get interest free transfers on my credit cards, so the debt is slowly going down - but it will take years, I've tried to boost this by selling things on eBay and in car boot sales, but instead of enjoying life I feel as if I'm a slave to my bank. I'd like to have my life back.

My debt
Loan - £19,261 - current balance
Credit Card 1 £600
Credit Card 2 £2300
Credit Card 3 £2415
Overdraft £1000 - predicted in a couple of weeks

Wages - about £1300 paid in each month. But then around £315 spent each month on motoring to work, the monthly rate on the loan is £275, then with the costs of food and everything else I usually have a couple of hundred to pay off on my credit card if I never go out or socialise at all.

Credit cards 2 and 3 are interest free, following bank transfers. Credit card 1 is the card I use when I don't have funds in the bank.

I've tried researching bankruptcy, but I don't really understand if I'm eligible to go bankrupt, as my debt is going down, but it's taking years (at least five years) and I've already been struggling with debt since the moment I left University five years ago.

I've looked at IVAs but I don't think that is the right path for me - it looks like I will still end up paying just as much money, only it'll be going to different people.

Can anyone offer me any advise? What would you do in these kind of circumstances?

Thanks in advance,

Stu.

DawnW

Why not start off by seeking advice from CCCS or CAB? They are completely free, and will give you impartial advice.

Miss_Piggy_2

I think you would be eligible for a DMP. Speak to the CCCS and see what they say.

mrcow

What does "the cost of food and every thing else" mean? You've got £710 per month unaccounted for. As a single person, the cost of food is about £15 per week.

You are either eating far too much food, or are wasting your money when you should be paying off your credit cards.

Why on earth is your overdraft "predicted" to be a £1000? You live with your parents......you shouldn't even have an overdraft.

Have you spoken to your parents about your idea of going bankrupt? What are their thoughts on it?

shinyhead

Why not post again on the 'Bankruptcy and living with it' sub-forum. People there may be able to give you a better idea.

If you have no assets to pay against your debts then it could be the way for you. Bear in mind that it would take a long time for your credit rating might bounce back, but that could be the consequence of whatever way you go. A DMP is also an option but might take a long time to pay off and leave you in the same situation you are now.

You could always have a chat with CCCS or Payplan. Why not try CCCS's debt remedy you can do online in confidence and it will suggest a way forward.

Jacks_xxx

:hello: Hello lovely,

Can we have a more detailed breakdown please?

http://www.makesenseofcards.com/soacalc.html

Have you had a play with the snowball calculator to see if that will help?

http://www.whatsthecost.com/snowball.aspx

Or spoken to CCCS for advice?

http://www.cccs.co.uk/contact/contact.aspx

On a personal note, in Aug 2006 we added up that we owed £96700 (plus a £91000 mortgage) on a joint income of £2644 with two kids and a grumpy cat to support - but thanks to the magnificent support on these boards we will be debt free in a few months (except for the mortgage.) so please don't think that bankruptcy is your only option.

We considered it ourselves - but because hubby would like to be self employed again the future, because we need to renegotiate our mortgage again V soon and because I am a control freak we plumped for the paying it off asap option.

(We discounted an IVA because my basic mantra is "things change" and a an IVA is based on the fact that things won't change and you'll be able to make the same payment every month for five years - but what happens if you get ill, or lose your job?)

I am currently feeling as if we were complete muppets to do this and that we should have just declared bankruptcy rather than working so hard to pay our debts for two years but that's probably just because I'm feeling grumpy today! :rolleyes:

As I understand it the entire world banking system is predicated on all of making our loan payments like good little debtors every month so god knows what would happen if we all suddenly declared bankruptcy! :eek:

Love Jacks xxx

betterlatethannever

As others have said, seek some advice You can contact:
Your local CAB Office and ask to speak to a 'money advisor'.
The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111
National Debtline - Tel: 0808 808 4000

or visit
http://www.cccs.co.uk/
http://www.nationaldebtline.co.uk/
http://www.citizensadvice.org.uk/index.htm

If they decide bankruptcy is the right path, then the official receiver would investigate the loan that was taken out so close to going BR and would expect you to account for the money.

Have a read of the bankruptcy boards http://forums.moneysavingexpert.com/forumdisplay.html?f=136 and think long and hard before making a decision. Its not an easy way out and can have a huge 'knock on' effect on your life for many years.

I see you left uni 5 years ago. If you have a student loan then this can't be included in the BR and would still have to be paid.

Get as much advice as possible and use that advice wisely.

Hope that helps and good luck

JES_F1

I can't advise on bankruptcy but can recommend the CCCS. I used their online debt remedy - you plug in all your figures for ALL your expenditure (from the small things like newspapers through to the big stuff like council tax and mortgage/rent), and then it provides the options based on your figures.

At the beginning of the year, I had well over £45,000 in debt. I've now got a DMP with the CCCS and have seen this reduce to under £40,000 already.

From the information you've provided, it looks like a DMP would be suitable, and your debts could be cleared in a relatively short period of time. (Creditors will usually freeze interest and charges so you actually see your debts reducing!)

Other options are Payplan and CAB, but I don't have any experience of those.

Good luck and very best wishes.

moonklash

Hi guys,

Thanks for all the answers, as always community based forums such as this are a great source of information. I'm going to try and start going through the comments now and making a plan. Here goes!

moonklash

DawnW wrote: »

Why not start off by seeking advice from CCCS or CAB? They are completely free, and will give you impartial advice.

I wasn't aware of the CCCS however I think I may give that a shot.

The CAB I've tried on a many occasions to visit, however because I work so many hours it's difficult to get there, and when I've called the phone just rings and rings. First impressions of them were certainly not good, and was put off by their inability to answer the telephone.... Mind, this was a few years back when I first started looking at an IVA and I'm certainly not intending to slate the service they offer as I understand they have been great for some people. But for me it was just impossible to get to talk to anyone.

moonklash

Miss_Piggy wrote: »

I think you would be eligible for a DMP. Speak to the CCCS and see what they say.

Thanks - I'll be carrying out some research on this over the next few days and probably calling them next weekend.