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Help - Crippling Debts! Is Bankruptcy The Best Way Forward For Me?

snoop1charlie
Posts: 18 Forumite
Hi,
I've already posted this under a different group on here, but have been advised to post here as well for the best advice on the best way forward for me, with regard to my current debt situation. Thanks
I've only been a member of the forum for 2 months and have only now had the courage to post this.
To give you a bit of background info, I was divorced 5 years ago and was left with accumulated debts of over £40,000! I was married for 4 years and during this time I relied heavily on credit cards and loans just to support the family. I had a stepson and then baby daughter to support, and a new mortgage as well. My ex-wife did not work and therefore our only source of income was mine. My income was only around £790 a month from my previous job as a civil servant. The debts started to accumulate one year prior to getting married as I found that my income was simply not enough to support my ex-wife, step son and baby daughter.. and I started taking out credit cards just to get through the month. One thing led to another and by the end of my marriage I had 13 credit cards and one huge loan from Lloyds TSB for over £20,000! The debt problem was largely hidden from my ex-wife basically because she didn't want to know, and as long as the money was there it was all that mattered. Obviously the lack of communication and the huge debts that had racked up played a big part in my marriage failing, although there were other factors as well.
Unfortunately the debts were ALL in my name and, despite my divorce solicitor's best efforts to get my ex-wife to accept joint responsibility of these debts accrued during our marriage, I was left with these debts to pay off. I struggled along for 2 years trying to meet at least the minimum payments on the credit cards plus the loan repayment, whilst keeping the mortgage repayments going. However I had to concede defeat eventually as I simply couldn't cope with the amount of debt, and I approached a Debt Management Company (DMC) who advised me to go on to a Debt Management Programme (DMP). I kept this going for 12 months but found that my debt wasn't coming down that fast, despite the interest being frozen. Therefore someone suggested I try applying for an IVA. Initially I was turned down on the first time of asking, which was mainly the Insolvency Practitioner’s fault for messing up some of the paperwork.
I then tried a different company, who wanted £3000 upfront before they would even look at doing an IVA for me! My former in-laws agreed to put up the fees for me and I went ahead with this company. All was going well and I was a month away from an IVA being put in place, but then I had some news out of the blue that my former employer were making some redundancies. Unfortunately as I hadn't been there for more than 5 years I was made redundant within 3 months. I informed the new IP of this and she said this changes everything, and I could not now proceed with the IVA. I asked if I could have the £3000 fees refunded as I stressed that I had no idea of my redundancy, and that I had known I wouldn't have proceeded with the IVA. However the IP (SPW Poppleton & Appleby) argued that the work had been put in and I wasn't entitled to any refund of the fees. So I was now also £3000 in debt to my former in-laws as well, with no IVA in place.... and also out of work! Fortunately I have since managed to pay off the £3000 over a few years.
I managed to get hold of a charitable organisation that spoke to all of my creditors, and fortunately most of them agreed to accept token payments. They took all responsibility in contacting my creditors and re-negotiating affordable repayments. However this organisation ceased to exist 2 years ago, and ever since I've been communicating and negotiating with all 14 creditors myself. I have managed to keep up to date with the repayments, only just, but every six months they are increased... otherwise if I don't agree they threaten legal action or bailiff action.
I was diagnosed with severe depression and acute anxiety 3 years ago, and am still not working. I am only in receipt of incapacity benefit, and receive some housing benefit towards the rent I pay on my house. I done myself a household income and expenditure sheet and it is evident that I am now struggling financially to maintain the 'token' repayments to the creditors, whist also trying to afford to meet household bills, etc. I reluctantly had to take out a Provident loan last year just to tide me over. The loan was taken out against my better judgement, and it was the worst thing I ever did.
Whichever way I look at it I am technically insolvent as my outgoings far outweigh my income, and I have had to sell stuff just to keep afloat each month. I know that I cannot carry on like this and it is exacerbating my current mental health, where I have become deeply distressed and depressed about my current situation. By the way my house was sold over 18 months ago, and unbelievably 70% of the equity left was given to my ex-wife. I used my 30% share to pay off one of my creditors.
I apologise for the length of this posting but I feel it gives a clear picture of how my situation has developed. I am at my wit's end now and every day I dread the post coming, knowing that there will be at least one letter from a creditor threatening legal action. I have had to stop paying Provident as the weekly payments were a ridiculous £34.00. I wrote a letter explaining my predicament, and asked for their understanding in allowing me to negotiate a token repayment towards the debt of £1400. So far all I have received is an 'Arrears Letter'.
Most of the debts are now over 6 years old at least, with the most significant one being Lloyds TSB at £19,000. It is ruining my life, my health, my relationship with my daughter to an extent - and not a moment goes by when I am not worrying that a bailiff may knock on the door or that'll I receive yet another phone call from a creditor. I am very reluctant to go down the Bankruptcy (Br) route, but I feel that I am being backed into that corner more and more. It seems a bit final and I am wary of the implications, and the stigma involved, but at the same time it would be an immense relief to find a final resolution to these debts that are haunting me! I also know that I would struggle with the court fees payable should I file for Br. As far as I am aware the initial £150 would be paid for me as I am on benefits, but the rest (£325?) has to be paid by me?
I would be very grateful for any advice on my debt situation as quite frankly I feel like I am just existing from day to day, and at the mercy of these creditors. It has made me very ill, and knowing that it'll take a lifetime to pay off these debts makes me very despondent. I hold my hands up and will be the first to admit that I have made bad choices, but I know it's not going to help resolve my debt situation.
Thanks for taking the time to read this.
Snoop
I've already posted this under a different group on here, but have been advised to post here as well for the best advice on the best way forward for me, with regard to my current debt situation. Thanks
I've only been a member of the forum for 2 months and have only now had the courage to post this.
To give you a bit of background info, I was divorced 5 years ago and was left with accumulated debts of over £40,000! I was married for 4 years and during this time I relied heavily on credit cards and loans just to support the family. I had a stepson and then baby daughter to support, and a new mortgage as well. My ex-wife did not work and therefore our only source of income was mine. My income was only around £790 a month from my previous job as a civil servant. The debts started to accumulate one year prior to getting married as I found that my income was simply not enough to support my ex-wife, step son and baby daughter.. and I started taking out credit cards just to get through the month. One thing led to another and by the end of my marriage I had 13 credit cards and one huge loan from Lloyds TSB for over £20,000! The debt problem was largely hidden from my ex-wife basically because she didn't want to know, and as long as the money was there it was all that mattered. Obviously the lack of communication and the huge debts that had racked up played a big part in my marriage failing, although there were other factors as well.
Unfortunately the debts were ALL in my name and, despite my divorce solicitor's best efforts to get my ex-wife to accept joint responsibility of these debts accrued during our marriage, I was left with these debts to pay off. I struggled along for 2 years trying to meet at least the minimum payments on the credit cards plus the loan repayment, whilst keeping the mortgage repayments going. However I had to concede defeat eventually as I simply couldn't cope with the amount of debt, and I approached a Debt Management Company (DMC) who advised me to go on to a Debt Management Programme (DMP). I kept this going for 12 months but found that my debt wasn't coming down that fast, despite the interest being frozen. Therefore someone suggested I try applying for an IVA. Initially I was turned down on the first time of asking, which was mainly the Insolvency Practitioner’s fault for messing up some of the paperwork.
I then tried a different company, who wanted £3000 upfront before they would even look at doing an IVA for me! My former in-laws agreed to put up the fees for me and I went ahead with this company. All was going well and I was a month away from an IVA being put in place, but then I had some news out of the blue that my former employer were making some redundancies. Unfortunately as I hadn't been there for more than 5 years I was made redundant within 3 months. I informed the new IP of this and she said this changes everything, and I could not now proceed with the IVA. I asked if I could have the £3000 fees refunded as I stressed that I had no idea of my redundancy, and that I had known I wouldn't have proceeded with the IVA. However the IP (SPW Poppleton & Appleby) argued that the work had been put in and I wasn't entitled to any refund of the fees. So I was now also £3000 in debt to my former in-laws as well, with no IVA in place.... and also out of work! Fortunately I have since managed to pay off the £3000 over a few years.
I managed to get hold of a charitable organisation that spoke to all of my creditors, and fortunately most of them agreed to accept token payments. They took all responsibility in contacting my creditors and re-negotiating affordable repayments. However this organisation ceased to exist 2 years ago, and ever since I've been communicating and negotiating with all 14 creditors myself. I have managed to keep up to date with the repayments, only just, but every six months they are increased... otherwise if I don't agree they threaten legal action or bailiff action.
I was diagnosed with severe depression and acute anxiety 3 years ago, and am still not working. I am only in receipt of incapacity benefit, and receive some housing benefit towards the rent I pay on my house. I done myself a household income and expenditure sheet and it is evident that I am now struggling financially to maintain the 'token' repayments to the creditors, whist also trying to afford to meet household bills, etc. I reluctantly had to take out a Provident loan last year just to tide me over. The loan was taken out against my better judgement, and it was the worst thing I ever did.
Whichever way I look at it I am technically insolvent as my outgoings far outweigh my income, and I have had to sell stuff just to keep afloat each month. I know that I cannot carry on like this and it is exacerbating my current mental health, where I have become deeply distressed and depressed about my current situation. By the way my house was sold over 18 months ago, and unbelievably 70% of the equity left was given to my ex-wife. I used my 30% share to pay off one of my creditors.
I apologise for the length of this posting but I feel it gives a clear picture of how my situation has developed. I am at my wit's end now and every day I dread the post coming, knowing that there will be at least one letter from a creditor threatening legal action. I have had to stop paying Provident as the weekly payments were a ridiculous £34.00. I wrote a letter explaining my predicament, and asked for their understanding in allowing me to negotiate a token repayment towards the debt of £1400. So far all I have received is an 'Arrears Letter'.
Most of the debts are now over 6 years old at least, with the most significant one being Lloyds TSB at £19,000. It is ruining my life, my health, my relationship with my daughter to an extent - and not a moment goes by when I am not worrying that a bailiff may knock on the door or that'll I receive yet another phone call from a creditor. I am very reluctant to go down the Bankruptcy (Br) route, but I feel that I am being backed into that corner more and more. It seems a bit final and I am wary of the implications, and the stigma involved, but at the same time it would be an immense relief to find a final resolution to these debts that are haunting me! I also know that I would struggle with the court fees payable should I file for Br. As far as I am aware the initial £150 would be paid for me as I am on benefits, but the rest (£325?) has to be paid by me?
I would be very grateful for any advice on my debt situation as quite frankly I feel like I am just existing from day to day, and at the mercy of these creditors. It has made me very ill, and knowing that it'll take a lifetime to pay off these debts makes me very despondent. I hold my hands up and will be the first to admit that I have made bad choices, but I know it's not going to help resolve my debt situation.
Thanks for taking the time to read this.
Snoop
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Comments
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just wanted to say hello again as i replied to you other post. as im still a newbee ill let the others take over on the advice
lisaIf you want to see the rainbow ,you gotta put up with some rain0 -
Hello Snoop,
I'm sorry you've had such a dreadful time. The first thing to say is that you should call CCCS or National Debtline (numbers in the sticky at the top of this forum). I can imagine you're dreading having to talk to yet another advisor after all the troubles you've been through, but if they advise bankruptcy then at least you know it's not just something you're afraid of happening but is something that you can begin to plan for. You should also put together an SOA, with a detailed breakdown of income and expenditure, but not including the debt repayments, so you can get a picture of what life might be like after bankruptcy. This may well be the incentive you need, and we will be able to help you with which figures should be increased or decreased.
Regarding bankruptcy itself, I think most people here would agree with me in saying that while it's not something one would ever wish to go through, it really isn't as bad as you fear it is going to be, and it certainly beats the pants off the situation you are currently in, having to dodge arrears letters and angry creditors, with no apparent way out. It's a serious step, yes, and you do lose a lot of autonomy. But it does offer a new start and the figures for reasonable living expenses are less punitive under bankruptcy than they are under IVA or DMP. You'll also find an enormous amount of support here from others who have been through it, are out on the other side of it, or are about to go through it, like Lisa above.
best
Lily0 -
snoop1charlie did you know as your on benefits, and on the min the govermant says you need to live you should only be paying a token £1 to all your creditors, if there demanding higher tough, they will never get more even if they took you to court, but of course they wont have told you that and they will make a lot of noise if you do reduce it, but its just that, noise, they cant legaly send anyone to your house without your agreemant, nor take anything without first getting a CCJ and then a warrent to sieze goods.Thats it, i am done, Blind-as-a-Bat has left the forum, for good this time, there is no way I can recover this account, as the password was random, and not recorded, and the email used no longer exits, nor can be recovered to recover the account, goodbye all ………….0
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Didn't want to post and run, so simply saying hello :hello: , you are not alone, and once you get some FREE advice come back and we'll help as much as we can :grouphug:Get free advice before embarking on bankruptcy: CCCS 0800 138 1111 National Debtline 0808 808 4000
Business Debt Line 0800 197 6026 CAB Insolvency Service- 0845 602 9848"He who laughs last didn't get it!" :rotfl:BSC 134
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Hi Charlie:hello:
Yes please ring one of the debt charities. I know CCCs(numberin my sig) are very good as my OH is doing a DMP with them at the moment and they are really nice. See what they advise and take it from there. One step at a time. The biggest you have lready taken by admitting you can no longer go on a you are. Well done for that.DxFree impartial debt advice available from: National Debtline - Tel: 0808 808 4000 | The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111 | Find your local Citizens Advice Bureau
Laugh at yourself and others laugh with you.Laugh at others and you laugh alone. BSC No 107:D0 -
Thanks all for your kind comments and words of support. I have in all honestly been living a nightmare for the past few years, and the creditors are turning the screws even tighter now so it seems.
I find especially near Christmas (every year) that the nasty letters and threats increase, just as a brutal reminder that they are there and out to make my life a misery. I have learned to ignore these to a certain extent, and I'm also becoming hardened to letters from a certain Debt Collection Agency.. namely DLC! I'm paying what I can afford each month to them, but still I get the constant phone calls and threatening letters. It isn't as if my financial situation has suddenly improved! The other main offenders are BLS and Equidebt, although there are others who are as equally harrassing! Does anyone have any experience of these companies?
I will definitely give CCCS a ring, and hopefully get a better understanding of what my options are, if any. The one thing does confuse me is that my original debts have been passed on from one DCA to another, so I'm not sure who deals with what anymore.
I thank you all once again, it is much appreciated. It is reassuring to know that I am not on my own in this. I will keep you posted on my progress.
Bye for now,
Snoop0 -
blind-as-a-bat wrote: »snoop1charlie did you know as your on benefits, and on the min the govermant says you need to live you should only be paying a token £1 to all your creditors, if there demanding higher tough, they will never get more even if they took you to court, but of course they wont have told you that and they will make a lot of noise if you do reduce it, but its just that, noise, they cant legaly send anyone to your house without your agreemant, nor take anything without first getting a CCJ and then a warrent to sieze goods.
I had no idea of this to be honest, and it is very useful to know. I am paying well above the £1 minimum payment to most of my creditors, even though they are aware that I am on benefits. You are right about their strong arm tactics and they would no doubt make a lot of noise if I had the audacity to reduce my monthly repayments. I have often thought that if it ever went to court then they (the court) will see that I have been very reasonable, and could only realistically afford to pay the minimum payment each month. I have lost count of the number of times I have been threatened with court action, and thought well it'll cost them a bomb to take it to court!
I guess what I have been worried about is someone knocking on my door, like bailiffs, and seizing my goods. I already live on my nerves and have been diminished by the constant phone calls and letters, so I guess this is their great masterplan to beat me into submission. My other main worry is the large amount of money owed to Lloyds TSB, i.e. £19,000, which I pay £15.00 a month towards. If I reduced my payment to them what would be the likely outcome? It may be a blessing in disguise that they petition for my bankruptcy, as it would certainly save me the court fees. Bearing in mind the amount involved, would they petition for my bankruptcy? This is the one major debt I am really worried about!
Snoop0 -
Tha only way that baliffs can come to your house and take goods is if they take you to court and obtain a CCJ, you default on payments to the CCJ, they then get a court order for baliffs, they come to your hause and they take a list of goods and if you then continue defaulting they will come and take goods in the list BUT if you don't let the bailiffs in, which you don't have, then they can't take anything.
Don't forget if they get a CCJ and you are paying it then they can't harrass you and have to stick .by what the judge has set as well as you
The only people likely to petition for bankruptcy are HMRC, Council Tax and Amex unfortunatly. Though we are seeing the odd one or two coming through by other people, but I wouldn't hold my breath.Namaste DeeDee x0 -
snoop1charlie if you can get your number changed, then they cant threaten you on the phone, although i have not dealt with the ones you mention i do know of there tactics, and they do lie about what they can do to force you to pay more.
You should never ever talk to a DCA on the phone as they dont record them as they claim, as proven when someone actually complains, all of a sudden they never called you at all:rolleyes:
They can send a collector to your door, with prior arangemant (though some do ignore that bit) but they have no power whatsoever and if they dont leave when asked they are trespassing, now while that is not a criminal offence, so the police wont act on that alone, they are acting in a manor that may leed to a breach of the piece, which the police do have to respond too;)
There threats are reall all empty ones, you just need to realise that you may find this an intresting read http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft664.pdf
It lays out what is and is not acceptable for a DCA to do, although getting someone to act on any breach of those guidlines is a long drawn out afair.
You could send all your creditors something like thisRegarding your threat that a Doorstep Collector will call please be advised that there is only an implied license under English Common Law for certain people to visit me on my property without express permission; the postman and people asking for directions etc (Armstrong v. Sheppard and Short Ltd [1959] 2 Q.B. per Lord Evershed M.R.).
Take note, I revoke license under English Common Law for you, or any of your representatives to visit me at my property and if you do so without my permission, you will then be liable to damages for a tort of trespass. You would also be conspiring in a trespass if you sent someone to visit me nevertheless. Any trespassers you attempt to send therefore will be dealt with accordingly including but not limited to, the request of police attendance.
Please also note that having a letterbox on the property does not give you, or anyone working on your behalf, either implied nor expressed rights to enter the properties boundaries consequently any attempt to enter the properties boundaries under the claim of using the letterbox will be dealt with in the manner outlined above.
Furthermore Please take note, for legal reasons, and for of accountability, this matter will be dealt with IN WRITING ONLY from the date of this letter so please be advised, as you have now been informed of this, any further letters simply asking me to call you on a telephone number will be ignored.
modified to suit, but you will need to send it recorded delivery to prove it was recieved, but once it removes the implied right to enter your property (driveway etc) It also puts it in writing you will not deal with them on the phone, but they will egnore that bit, its easier to change your numberThats it, i am done, Blind-as-a-Bat has left the forum, for good this time, there is no way I can recover this account, as the password was random, and not recorded, and the email used no longer exits, nor can be recovered to recover the account, goodbye all ………….0 -
OK then, lets say youve taken the advice of CCCS, CAB and/or Debtline
I think youve gone the whole extra mile to service your debts, but things are against you and only a deep dark tunnel awaits you if you keep trying.
You want to wipe all your debts and rebuild? fair enough
£325 fees and your there mate, at the start line
can you find it in a reasonable time given that you will stop paying all creditors as of now?
you can go BR faster than any of them can get a CCJ anyway
no creditor with any sense will make you BR, so dont wait on that/them
good luck, ask away and post a SOA on here though being purely on benefits you wont get a IPO/IPA.Now we all know how it felt to play in the band on the Titanic...0
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