a friend in need (substantial debt)

julzdyer

hi all

have been looking at the threads the last few days on behalf of my friends son and i need to ask for some help for him as follows :

he is only 24 years old and has accumulated the following debts

VAT £5000
PAYE £2000
BANK £10000
CREDIT CARDS £12000

he has £3500 saved and a tax refund due of £3000

he has no assets, nothing whatsover and currently has an employed job but he sees no way in clearing these debts at all in the near future

a client of mine has seriously advised him to consider bankruptcy and i am after some advice if this is the best route and what his next movements are if this is the case.

thanks all

julzdyer

k2nga

I have to be honest and say i find it a little easy to say go BR although it may be the best way forward but i would get him to call CCCS or national debtline to get there advice as not only will they advise on any other ways but also if he does decided to go down the BR route seeking this advice would convince any judge that he had taken professional advice.

julzdyer

thanks for that

i do agree, the BR route does seem such an easy option, but for someone so young, who doesnt require credit currently (and wouldnt get it anyway) i think this is the safest and best option

i will get him to make a phone call and move forward that way

k2nga

You are right i think its the best option as he will of learnt a lesson i would hope and BR would give him a fresh start.

I have been helping some friends with a serious debt problem and i knew they would really need to go BR as they had no real other options but i still got them to get advice from the CAB and National Debtline before i helped them fill in there paperwork and book the court.

I wish him all the best and you and please let us all know how you get on and of course if there are further questions just ask away there is always someone on here that can help.

julzdyer

i will sit down with him and his dad today and get him to contact CCCS, or shall i take him to CAB as its only up the road from me?

will CAB assist with the paperwork? if not, is it straight forward to complete? is there a guide online at all?

thanks again k2nga

k2nga

Yeah the CAB are seen as proffesional advice by the courts so you could take him to them and they may help with the paperwork but i would call them first as they are up to there necks at the moment so you might struggle to get in.

You can do the BR forms online at the insolvency website. All you do is set up an account and start filling it in. Dont panic as you dont have to fill it all in there and then as you can save it and return later but they do give prompts along the way on how to fill it in but any problems just ask away.

julzdyer

ok, i have had a chat with the young lad and the good news is that he has already made contact with CCCS.

with the assistance of all others, i have promised to help him sort it all out (i am good friends with his father and also i am his accountant!)

anyway, i have done his SOA

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1450
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1450
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 250
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 70
Clothing................................ 30
Petrol/diesel........................... 120
Road tax................................ 15
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 150
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 875

Assets
Cash.................................... 1000
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
northern rock..................12069.....281.......0
lloyds tsb account.............1190......60........0
lloyds tsb creditcard..........3394......102.......0
accountant.....................2000......0.........0
TAX (PAYE).....................1800......0.........0
VAT ...........................5000......0.........0
credit solutions...............296.......15........0
british gas....................1151......68........0
severn trent...................392.......20........0
lloyds loan....................16293.....357.......0
Total unsecured debts..........43585.....903.......-

Monthly Budget Summary
Total monthly income.................... 1,450
Expenses (including HP & secured debts). 875
Available for debt repayments........... 575
Monthly UNsecured debt repayments....... 903
Amount short for making debt repayments. -328
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -43,585
Net Assets.............................. -41,585
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

can you please help where necessary

finally, he is due a tax refund on CIS tax suffered of c 3k. can he receive this and pay off debts (me, dad family etc) and then go BR?

will there be any comebacks if he does this?

thanks all

julian

julzdyer

forgot to mention that the income of 1450 is only a short term 3 month contract

miss_spooky

Just a quick note. If he uses his refund and any savings to clear family debts and not pay any pro rata payments to any of his other creditors, the OR can do two things. Give him a BRU/BRO for preferiancial (sp?) treatment of a creditor - family & you. AND he can reverse the payments therefore asking for the money back from you and family.

I'd be very careful here and see what CCCS advise.

The only other thing he can do is to not put you & family into his br, not pay you until his discharge then make arrangements to pay.

julzdyer

so i should really suggest that the refund he recieves to bank then and keep?

only problem with that would be that Lloyds will swallow it up immediately and leave him no cash anyway!

tigerfeet2006

Get him to open a Co-op Cashminder or Barclays Cash account straight away so money is no longer swallowed up.