Advice needed - do I go bankrupt?

yellowvanman

Hi everyone, I've been looking through the forum over the last few months but this is my first post. I'm after some advice but guess I need to give you all the gory background details to be able to advise me.

I won't go in to the reasons just now as it will take far too long, no doubt I'll fill in the blanks in due course but in short..

Over the last few years I have got in to debt and ended up taking out credit card after credit card to rob Peter to pay Paul, included in there are a couple of bank loans. In hind site I was just burying my head in the sand and ignoring the fact that a. I had a financial problem, and b. at some point it would all catch up with me. However up until last November I could just break even on my income although the stress was taking it's toll on both my work & my personal life. My contract was not renewed due to the current financial climate (had already been reduced to 4 days a week earlier in the year) and therefore my income dropped from £1400 pm after tax to £400 - i get £400 as I started my own IT consultancy (only sole trader not Ltd Co) in the summer as I had an idea contract was looking dodgy.

Anyway I currently owe just under £40,000 (£30,000 Credit Cards & £10,000 bank loans) and have just had a DMP set up with CCCS for £182 per month.

The problem is that firstly half the creditors aren't happy with the amount they are receiving and some are still charging interest and/or late payment charges. Even if they freeze interest and fees I'll be paying them off for the next 200+ months.

I need some advice as to whether or not I should just cut my losses and go bankrupt, I know it isn't an easy way out and has lots of implications but I don't know if I can cope with not seeing any light at the end of the tunnel.

If I do go bankrupt how will it affect my self employment including the fact that I have a van on finance.

Any advice would be greatly appreciated.

Mike

elsie52

Hi Mike

Welcome to this board, and well done on taking the first steps to being debt free by posting.

I don't know what advice to give you, but I can tell you that we were in debt to the tune of £76k this time last year. We also know the same guys that you do.....Peter and Paul.....all we seemed to do was stagger from one pay day to another. We also did the consolidation "thing ".....but we ended up taking more loans out, but still using our credit cards.

We considered going bankrupt......but for us it was not an option. I know that I need to pay my way out of this mess, no matter how long it takes.

We spoke to Payplan, and went on a DMP. Some of our creditors were awkward at first, and then accepted our offers. Some of them are still charging interest, but others have been great, so all in all things will get paid in about 3 years time.

It was the best thin we did, we now have more cash to spend on food and we budget for everything. Its not easy when you start out, but I have peace of mind that I didn't go for Bankrupcy..it wouldn't have been right for me.

Good luck and keep posting, I will continue to read your posts and watch to see what you decide to do.

catherine_h_2

Hi,

I can't offer any professional advice but personally I would stay away from bankruptcy, as you say it has quite a few implications and if you're managing your debts and can afford to pay them off, is it really worth it?!?!

Plus it's worth bearing in mind that circumstances change and although it's 200+months away to being DF, number 1 - you're doing it yourself and not taking the so called 'easy' way out of bankruptcy and 2 - you could be making more money this time next year:D and therefore would be able to up your DMP payments and cutting 200+months to possibly 100 month:T .....just a thought.

It's a case of 'can't see the wood for all the trees in the way' but it does get better and you've taken the major step of sorting out your finances and organising the DMP:D

Another thing......have you posted an SOA??? (not got a link, sorry:o ) If not it's worth doing so......everyone will soon dive in and suggest money saving techniques:D

4littleone

TBH, i think choosing whether or not to go bankrupt would depend on two things.

1. Do you have assets you need to protect such as a house? (i'm also not sure what the position would be on your consultancy business)

and
#2. How likely is it that your situation is going to improve drastically over the next year considering we are in a recession?

You really need to look at the bankruptcy board and have a chat with the people on there for a clearer picture of the implications.

Personally, if i was in your position and had no assets i would choose bankruptcy simply because it would end all the stress for me alot sooner and i would feel i had a frsh start. That is only MY opinion though. You need to get advice from CCCS etc before you make any decision

Take care and i hope things improve for you. :beer:

RAS

Hi

You need to talk to one of the debt charities and discuss the options once you fully understand the implications of each one.

Se here for details http://www.moneysavingexpert.com/loans/debt-help-plan#help

yellowvanman

Hi everyone and thanks for your advice.

Although it's really stressful trying to decide what to do it's good to know there are people to talk to who have been through it all themselves.

As my DMP arranged through CCCS has only just started I'm going to see if things settle down a bit first before doing anything too drastic, I just need to look in to all the options including bankcruptcy so I know what i'm letting myself in for.

I just received a letter from them this morning to say that one of my creditors (MBNA) advised them that they were unable to accept the reduced payment proposal and that they are likely to default my account and pass the debt on to a debt collection agency... more stress!

Will keep posting and let you all know how things go.

Mike.

RAS

This is standard for MBNA. Do not think I can remember anyone who MBNA have accepted.

When did you open the MBNA account?

Leixlip1

I have an arrangement in place with MBNA for the past 2 years. I had to go through their usual trying to sell me loan to clear the debt rubbish and threats of legal action.
I pointed out that I had agreements with all my other creditors (self managed dmp) and was "happy" to go to court to argue my case - they eventually accepted my pro-rata payment offer and on the last two annual updates wrote to me saying that if I didn't say to the contrary the dmp would continue assuming my circumstances hadn't changed. I increase the payments as & when I can to them and my other creditors and touch wood no problems to date.
Guess I've just been lucky with MBNA but I had to be persistant & strong.

chunkey101

I am now in the 3rd month of my DMP and MBNA accepted my plan straight away.

Chunkey

tishywish

MBNA were fairly bad with me - they wouldn't accept the payments, kept sending threatening letters and finally defaulted me then sold the debt to a DCA. I thought that would be really stressful but so far, I've had 3 letters since about September (I think) from the DCA and then nothing at all. I did send a CCA request to them which has resulted in months of silence! I wish MBNA had defaulted me earlier as it's been easier dealing with the DCA than MBNA.

It took a couple of months for charges to stop when I started my DMP, and to be fair even MBNA stopped charges and interest. Since then most of my creditors have been quiet apart from sending me regular statements. Going on a DMP has been the best thing I did.

yellowvanman

Thanks for telling me your experiences with MBNA. I've had my account with them for a couple of years and never missed a minimum payment until last November. Guess I'll stick with it and be prepared to argue my case. After all they can't have what I haven't got!

Will keep you up to date with developements (haven't heard anything from any of my other creditors.. yet)

Have a good weekend everyone. :beer:

Mike.