Help, advice needed please

Dave_Adlam

Hi Guys,

I am new to this site and have been searching for some advice about my debts.

I apologise if this is long winded in advance!!

Up until last September I was on a debt monthly payment plan with a debt management company. I paid them £ 200 every month and after they took their fee the creditors were paid with the remaining balance. I had been paying this for the last 3 years and the creditors had not stopped the interest each month, meaning after 3 years of paying £ 200 a month I had paid nothing off of the debts!!!

The debt management company advised me that I could apply for bankruptcy and they could help me with everything for a fee. As my debts are no more than £12k an IVA was not an option. They said the fee and the bankruptcy court fee would be £ 1000.00 in total and I could continue paying them the £ 200 each month and once the money had been paid in full they would then file my petition for bankruptcy. I have paid them £ 820.00 to date.

As I was paying the money to the debt management company my creditors were starting to harrass me again as they were not getting any money. My partner emailed them for me and informed them that I was paying into a bankruptcy settlement plan with the debt management company and could they please give me some time to do this. They didn't listen and continued to ring me, late at night, most nights and constantly during the day.

All the stress of this caused me and my partner endless arguements and unfortunately we have since seperated. I then got informed by the company I had been doing work for since last July that they had no more work for me. By the time the New Year came I had very little work and has my partner and I had split up she had now moved out so I no longer had an income coming in from her each month towards the household bills and the rent which is £ 700 per month.

I was fortunate enough to have a friend who had been able to lend me little amounts of money along the way to make rent payments where I have been short from any money I have earned.

I then called the debt management company and informed them that my partner and I had seperated and that I was finding it hard to get work at the moment so I did not know when I could make the final payment of
£ 180.00 that they required for the bankruptcy. They agreed to hold my account until March 2010 and then I would contact them and let them know if anything had changed.

During this time I got a tax rebate of £ 2953.36. I paid my friend back the £ 1000.00 I owed, (this was the total I had borrowed off of him over the last year when things were tight). I then went a brought a new TV, which I know now I shouldn't of but, when my ex partner and I seperated she took the TV as she had purchased it and I was left with a 21". I was also very angry at the fact that I had worked hard to get that rebate and the fact I had no work lined up for the next 6 - 8 weeks I used some of the money to buy the TV and have used the remaining to pay bills, rent etc and get by.

I am now worried that if I do go through the bankruptcy process (the debt management company are calling me on the 12th April to finalise everything) I will then get into trouble for buying the TV and made to sell it to give to my creditors. It is a plasma, which, the courts consider to be a luxury so, they will no doubt take it off me. I do not have a car and nothing else in my home is over £ 200 in value for each item, except my new TV. I paid £ 550.00 for it.

Would I be able to ask the debt management company to start a new payment plan with the £ 50 - £ 100 I have left each month and pay my creditors token payments for the next 12 months and then see if my circumstances have changed. They could distribute whatever is left from their fee of the £ 820.00 they have of my money to the creditors instantly.

Will the official receiver and or the courts know that I brought the TV in January if they only want to see bank statements for the last 3 months? The bankruptcy won't start until the start of May so they won't see the statements for January but, will the tax rebate show up somewhere along the line and then I will have to explain where the money went? I am worried about this too as I read on a site that if you pay any money to a friend or relative in the year of your bankruptcy either, prior to or after, the official receiver can and will demand all or some of that money back, depending on the amount given. Why should my friend have to suffer when all he did was help me out?

If I was to hold off on the bankruptcy I have read that my debt management only do payment plans for the minimum of £ 200 per month. Is there a company out there who can help me with my debts and the little amount of disosable income I have left?

If I was to file for bankruptcy, would I then have to declare my tax rebate?

I hope you haven't fallen asleep and that someone can help me.

Many thanks

Dave

tazzy2010_2

Hi Dave have you phoned debtline or gone to the citizens advice bureau - they can help you with your debt problems free of charge x

fatbelly

Follow Martin's guidance and seek independent advice

http://www.moneysavingexpert.com/loans/debt-help-plan#help

With debts less than 15k the first option to consider is a debt relief order.

With any insolvency solution (bankruptcy, DRO) the payment to your friend could be viewed as a 'preferential payment'.

P. S. Bankruptcy only costs £360 + £150, going to £450 + £150 in April. Your dmc is ripping you off.