Bankruptcy the best option?

clairus99

A lot of people have advised me to come here.... so here's hoping you can help out!

The situation is this. I clocked up in the past about £11k worth of debts - about half that in CCJs.

A CCJ from 5y 10m ago, with the last contact from the company being Sept 2001 of £1500 has come back to haunt me, a couple of months before I start university - and I'm currently not earning.

This company, I don't believe have acted illegally, but do find them using what I consider to be unusual tactics. They took out a Garnishee Order on me one time - clearing out my bank account which was only £164 of it but left me unable to buy food or pay rent, and stuck in another town with a restaurant bill I was unable to pay. Anyway. So, no contact for nearly 6 years and I get a threat that they are going to file an order for me to appear in court to answer questions about my finances, which I'd never heard of before.

After researching a bit I learn that CCJs aren't subject to the statute of limitations. I realistically offered them a minimum of £10 payment pm, realistically, and explained my current situation. They basically accused me of lying, based on their Experian search and said no, we want min £30pm.

What I'm most scared about that whilst I'm at uni, running up a £9k student loan, other CCJs are going to come out of the closet and force me to give up my studies. Times are hard enough...!

I try not to live beyond my means these days so surely I can be forgiven for a mis-spent past?

I've had bad credit for years because of these old debts so the "stigma" of bankruptcy and the inability to get good credit for a few years is of no bother to me.

I'm thinking of either seeing if they try to make me bankrupt or risking the £325 or so to become one myself (I believe they can say no and I lose that money, which is hardly in my best interests!).

I've considered debt consolidation companies (the free ones) but it means paying out something like £350 for the next year or so - where am I going to get that from?!

That's the full situation in a nutshell, happy to answer any questions (of course!), and I'm now going to cross my fingers and wait for the wonderful and helpful response that this forum seems to have a reputation of!!

Thanks in advance......

lynzpower

HI there and welcome !

Do you have any income at ALL at the moment? What are you living on?

I dont think you need to go bankrupt, additionally, you do have to pay to do so.

Pop up your SOA if you like and we'll have a nose over it to se if theres any way we can save you some money to start paying the debts off. IN any case, student loans arnt covered in BR so effectively you will still have these debts to pay.

Dont worry, we'll help you find a solution

clairus99

Thanks

No, basically I'm just living off my boyfriend at the moment. I try to spend very little and mainly use the money he gives me on current bills (which I have to juggle!).

I'm not worried about the student loan and I'm aware that it's not covered by bankruptcy - I haven't started yet so I've 3 years to worry about that!!

I don't actually mind continuing my current credit as is (a couple of catalogues and a credit card, equalling about £1000 in total) as I'm not in arrears with current credit. Well... by about £50 maybe, a couple of weeks!

I know I will have to pay for the bankruptcy, I sold my car to my brother and got most of the £ towards that (only about £250 though). I do worry about the risk that they might say no and won't give me the deposit back though!

Sorry, as a newbie, I don't understand what SOA is - do you mean you want me to break it all down?! (!)

lynzpower

Have a nosey at southern scousers first time posters sticky, that should tell you all you need to know about incomes & outgoings.

Dont CCJs fall off your credit record after 6 years

Anyone know?

CLAPTON

just a question that i dont know the answer to but some else may

can a bankrupt apply for a student loan?


also
an SoA is a statement of affairs...lists your income, spending, debts etc.

see
http://forums.moneysavingexpert.com/showthread.html?t=107280

clairus99

Funnily enough I was just having a little look (okay, I confess I am one of those who posts first and asks questions later. I'm trying to change - honest!!! )

Okay.... SOA... a right minefield, but I'll do my best!!

Monthly Incomings:

B'friend's housekeeping pm - £400+
B'friend's salary (does this matter?) - roughly £800 + up to another £500

Total - £1700

Monthly Outgoings:

Rent - £265 (current arrears around £700)
Council Tax - £120 (£80 in arrears from last year)
Gas - £28
Electric - £25
Water - £26
Catalogues - roughly £80pm (everything's on interest free)
TV Licence - £10.54
Sky £46
Phone - £50
Internet - £16
Mobile - £30
Loan from brother - £400 (at £50+pm)
Food/Shopping - £400 (at most)
Car Debt - £600
Petrol - £50
Medication - £13
Credit Card - £30 (paying off mostly, rarely use now)
Various insurances - £41

Total: £1879

OH considers that he pays what he considers appropriate, which is fair enough because the extra £500+ he earns goes straight to paying bills (do not pass Go) and he has his own car and loan on top of that to pay for.

So, already we're juggling bills, and haven't included all those other things that pop up to frighten you, like burnt out clutches, or road tax, or "gone" head gaskets, dentistry, birthdays/xmas, etc. With a bit of juggling we are managing (just about!).

I'm not working right now as I volunteer a couple of days a week in a school and don't think it's fair to give up now when I'm almost at the end of the school year (not doing it next year). I "work" with the OH with this extra money - he couldn't do the job alone, neither can I. Apart from that I'm studying - so getting a job that fits around that is vv hard right now (will be looking for temp work over summer though, touch wood).

Debts..... oy vey.... I've got all this from files I've managed to keep and from an Experian report done in Feb 2006:-

£1500 CCJ (Aug 00) - the one that's set all this off!
£700 rent
£600 car
£800 (2003) - threatened legal action in March 2006
£300 CCJ applied for in 2004 but haven't had any contact
£365 CCJ (2000) - haven't seen CCJ but have moved... it's "registered"
£40 sundry debt
£30 sundry debt
£1218 overpayment of housing benefit from 1995 (chasing me now)
£1220 overpayment of housing benefit from 1995-2003 (")
£950 CCJ applied for in Jun 2000 - no further contact (I moved)
£105 last contact June 2000 - no further contact (I moved)
£175 last contact 1998 have moved (a couple of times!)
£905 CCJ (1996)
£165 CCJ (1996)
£90 CCJ (1998)
£380 last contact 2002
£125 last contact 2001
£16 last contact 2000 (I moved)
£209 last contact Oct 2000

TOTAL £9893 (not sure where I got the extra grand from... maybe I added the catalogue and credit card which are not in arrears).

Just had a thought - I might check those HB ones to see if they're the same thing (letters from different councils hence confusion) - I realise I'm probably not going to get off those, but at least if I get off the rest I can focus on them.

Anyone who wades through that, good luck to you and I owe you a large one!

jen_jen_2

ccj's fall off your credit record but can still be enforced. asking you to go to court for an interview to find out about your finances they can do, also they could garnishee you again when your student loan money goes in (i would if you owed me money)

you say you have offered them £10 per month, was this on a court form or direct to them, offer it via the court and if the court accept it then as long as you continue to pay at the agreed rate they cannot ask for anything else.

you may also want to consider (if your debts are less than 5K) an administration order, along with a composition order it will set payments to all your creditors and may write some of it off, again you have to ask the court for it. much cheaper and just as effective as bankruptcy

clairus99

oh... re the student loan, no you can't write that off, or any fines. that much i know...

also, i checked last week around the net - CCJs last forever in terms of when they can get you for the money.

jen_jen_2

hmm, i can see the advantage of bankruptcy to you, housing benefit wont be included and loan to brother i assume still needs to be paid. you could carry on and sit and wait out the debts, you have moved alot so probably makes you difficult to find.

i dont want to upset you either, but i still think you havent quite got a handle on managing the budget yet. these debts are from 6 years ago, you are spending more than is coming in by £189 and you are still borrowing money from family and in arrears with essential bills like rent and council tax.

i suggest to sovle the CCJ problem, make an offer via court on N244 (application to vary the order ) it may cost £35.

the longer term problem about overspending, i am sure lots of people will be along with tips - as a start what is insurance for? could sky go or be cut down, and do you need £50 on phone and a £30 mobile??

clairus99

I started behaving myself generally about 3 years ago - although I clocked up 2 debts in that time, admittedly. That was due to going from earning £25k+ to earning next to zilch. The two catalogues are mostly for clothes and things that the house needed, like a washing machine and small furniture. The loan to my brother.... that was from last week. He bought my car as a favour to me but I've still got to pay the insurance on it. He's in a load of debt (well.... he's not in debt per se, he just owes LOADS) and I borrowed £500ish off his credit card to pay that off. I gave him about £120 of that on the spot. It works out to me basically paying a little bit higher on the insurance a month compared to what I used to (sounds complicated I know).

As far has handling it, I think it's more a case of trying to juggle it, rather than being just as bad or getting worse. I'm not having a go, and I'm not in denial, honestly, I used to get credit, spend it to the max and really not manage the repayments. I was a lot less settled then as well. I just use the catalogues for what I need now, I question whether I really want something, or need something, mull it over for a couple of days and that's that. Touch wood, we don't need any household stuff right now and I don't need clothes probably until next year now.

The council tax slipped badly last year because of lack of money and the rent because I was paying off other debts with the money I should have paid the rent with. I'm paying them off quite well now, they've been really understanding. I just owe the Council Tax £80 from last year, which is annoying but when I put that next to an electrical bill and then next week another, and then the next week another, it kind of gets left at the bottom of the pile unfortunately. I'm really trying to concentrate on staying afloat and paying off the rent arrears at the moment. By the time I've done that it'll be time to concentrate on paying the Council Tax, PDQ - that'll be the rest of the year then, more than likely. Do you see what I mean?

Sky - I'm happy for it to go, but we're under contract until the end of the year, mobile phone until late next year. The phone bill was an estimate to be honest - we've just gone with a new company. It might be half that. And this is someone who used to spend, on average £250 on quarterly phone bills, so I'm not doing too bad!! I should add (I'm sure it's been said many times here), I don't drink or smoke or waste £ on dvds, cds and that - most of the money we get these days gets sunk into debts and ongoing bills. Not to mention getting cars fixed, blimey...! Aaaand... we can't get rid of these as the extra money we earn requires us to have them. Yes, both of them.

The insurance is for the washing machine, fridge, sky stuff and pc. I've had so many problems and expense replacing these in the past that these new for old deals seem pretty good to me.

The N244 - does that mean repaying the CCJs?

lynzpower

I wonder, is going to University and not earning for such a long time really the best plan? I wonder what would happen if the worst happened and your BF was unable to continue to support you? Could you defer the start of the course for a year and start paying off some of what you owe