£12,000 + Worth Of Debt, Looking To Wipe

topguyuk

Dear Members,

I am aged 22 and have been unemployed for about a year. I am due to start a new job within the month and have debts.

Whilst 18 I ran up over a year or so around £12,000 worth of debt (credit cards, contract phones etc) - I was stupid/foolish I will admit. I couldn't resist temptation and just kept spending.

Now 22 as mentioned I want to wipe the debt clear, I am wondering what is the best way? I am not in skilled employment and therefore my wage isn't brilliant.

Due to the amount/my wage would bankruptcy/debt relief order be a good idea?
If not how about a debt management plan.

Any advice would be greatly appreciated.

Cheers

DarkConvict

You shouldn't be looking at wiping debts off, but paying them off. Sadly money isn't oh a made a mistake ill do xyz and carry on, debt has running consequences for along time.

DRO has certain conditions like total debt must be under £15,000 and you have no real assets.
IVA is about protecting assets so i assume this is no good for you.
And to be honest you shouldn't be considering bankruptcy at such a young age, your the same age as me.

Debt management plan (DMP) with a charity like national debtline or CCCS would be a good way to go about it, a DMP is about paying back your debts at what you can afford. The £12,000 must have gone somewhere anything you sell up?

If you want to take action but are totally clueless, ring national debtline and CCCS and get advice from both.

Also, paying back debts can be eaiser than you think, post up your SOA (see first timers sticky) and lets see where you are spending your money.

topguyuk

Thanks for your reply.

Whilst you say I shouldn't be considering bankruptcy at such a young age, I have no assests of any value and so therefore what would I have to lose? Yes it would affect my credit rating for 6 years - so surely it's better to do it now than later on in life?

If not I shall look at the DMP, thanks for the info

DarkConvict

Bankruptcy is the end of the line, i've seen people go bankrupt over just £10,000, but equally seen people with £100,000+ debt pay it off in under 6 years.

If you go BR, you have to pay £530 upfront whether it gets accepted or not. You will by default be made BR for 12 months, and given an IPA for 3 years. An IPA is that you surrender 50-70% of your surplus income after basic living expenses, usually it is 3 years but it can be longer. Also if during your bankruptcy you don't play ball a bankruptcy order can be placed making you BR for upto 15 years, and disposable of assets to avoid paying can land you upto 7 years in jail for fraud.
A friend who has gone BR for the 3rd time, yes 3rd time is potentially looking at the end of that sentence because well.. i dunno, doesn't listen and doesn't learn i guess.
Another stupid thing with BR is that it is handled by an insolvency agent, well that not unusal, what is unusual is that how you are treated during your BR depends on who is assigned to you, a guy was warned by his lawyer that if you get person x,y you will keep your house, if you get z they will make you sell it. Whilst there is laws on insolvency it is mostly down to individual circumstances, policy of your local insolvency office and how the person handles your case deals with it,
Also BR will kill several professional careers, finance and law are two areas where been made BR can prevent you getting a job. Also the oddity is, you can be asked if you have ever committed a crime within 6 years, but they can ask if you have EVER been made bankrupt, you have to answer yes.

Also not all debts are covered by bankruptcy, student loans, court fines, child maintenance payments and a few others. Also if you have huge debts due to gambling the BR may not even be approved.

If BR is realistically your only option then fine, but you need to talk about the options with someone trained, like CCCS, National Debtline, CAB etc.

A DMP would be worth a go first in my opinion.

niksyg

Hi topguyuk -

You sound just like a guy I work with - he was on a DMP and has now gone onto an IVA. I think he is a complete moron...yes he has lots of debt and needs to look at paying it off, but the reason he has gone from DMP to IVA is that he still goes out and isn't at all careful with the money he does have. Not saying that you are a moron but just don't think that a plan will solve all your issues - YOU have to make the biggest difference.

My advice would be to write a SOA, as DarkConvict said, but make sure you are realistic with your outgoings.

Try making your own plan to reduce your debts, think about making sacrifices rather than just 'wiping' the debt off by entering into some sort of plan. I have managed to pay off over 2k from my debts in the last year by cutting back and budgeting properly. If after 6 months you are not seeing a change or feeling happy that you are dealing with your debt, then perhaps consider a DMP. At 22 you should be making the effort to deal with your mistake and learn from it...there is a potentially very valuable lesson to be learned here.

Apologies if I sound harsh, but I think it's all too easy for you just to pass the problem onto someone else - at 22 years old you should be fixing your mistakes - take some responsibility!

Tixy

Hi topguy

Like the others have said bankruptcy/dro might be the right option for you, but you should be looking for alternatives first.

You are 22 now,do you really want to take that huge step now, who knows where you might be within the next 6years.

I'd suggest a couple of things to look at long before you start thinking of bankruptcy.

1 - is to complete a detailed statment of affairs to show your income & outgoings and all your debts. This will make you see in black & white your true situation. If you post on here people will help and make suggestions for you. http://forums.moneysavingexpert.com/showthread.html?t=107280

2 - speak to one of the free debt advice organisations about what they would recommend for you in your position. http://forums.moneysavingexpert.com/showthread.html?t=2077631

Happytogetdebtfree

All the best topguy uk it might be better to post a statement of affairs so maybe we canadvise queer you can cut back and make dents in the amount owed :-)