Have to save up to go bankrupt?!!

flis21

I am going to have to declare myself bankrupt. Unfortunately due to ill health I had to leave my £21k a year job and have now got a job earning £11k instead! As such I cannot afford to pay all my debts back. I tried doing an IVA, but it didn't work and I ended up not paying for a few months. They have now sent me a letter saying that they are having a creditors meeting to fail the IVA agreement, which I expected. But I also expected them to apply for my bankruptcy. Apparently this is very unlikely to happen.

So I am now in a position where I have very little left over after I have paid all my monthly bills and I have to try to save up £475 to declare myself bankrupt. Part of me thinks this is ridiculous, how is a person who needs to go BR supposed to get that sort of money?!! Am going to try selling a few bits on ebay maybe, but I always find the fees outweigh a lot of the money I make and I don't have much to sell anyway. I am just feeling reslly frustrated and am now worried that we are going to go down the CCJ / Bailiffs route before I can afford to go bankrupt.

Goldielocks

Some people have taken the cash off a credit card. Bit naughty but needs must - you might get a slap on the wrists from the official receiver but that's about it

flis21

Can't do that, as when we did the IVA had to get rid of all our cards. The only thing I have now that I can use is an overdraft, but that is maxed out. Won't be able to get credit anywhere else due to IVA.

Goldielocks

Mmmmm OK that's scuppered that plan then! What other options do you have mmmm let's see.....Can you borrow any money from a family member or good friend? Try and flog as much as you can on Ebay. Cut right back on non essentials etc.

If you don't mind me asking - how much is your total debt? Are you paying ny of them back at the mo?

G

flis21

My total debt is £35,771! Part of that is my student loan, which I understand can't go into the bankruptcy, so I will still be left with that bit at the other end, but as I am earning less than £15k I am not paying it back at the moment.

No not paying anything at the moment and haven't done for a few months. Been sort of burying my head in the sand about it, but realise that that won't work long term, so I need to try and sort something out.

I can probably try to cut back a bit more, but have tried to start doing some of my Christmas shopping this month. (We have agreed with family due to our financial circumstances to spend a lot less on people this year, but still need to get some bits. I don't smoke, but am going to cut down how much I drink and how many times we go to cinema etc. to try and help.

ZTD

If you stopped paying anything, how long until you could save the money?

flis21

ZTD wrote:

If you stopped paying anything, how long until you could save the money?

Would that include not paying my council tax / gas bills etc? As I don't want to stop paying them. I am not paying anything towards any of my debt at the moment and I have about £50 spare per month so would take about 8 months!! I am going to try and reduce my outgoings and sell a few things so I can get there faster, just find it really annoying position to be in. I know I have to go bankrupt and would rather do it sooner than have it hanging over my head for ages!

Goldielocks

Yes you're quite correct about the student loans, this is not included in the BR. I recently went BR and my total debt was about 60K so you are not alone! Luckily my student loan was the smallest debt (from about 14 years ago cringe!) in the BR and so I have been left with about £1400 to pay which is a whole better than the 60K!!

You are certainly not the only person to struggle in finding the BR fees. I agree - I find it really silly that you have to pay to go BR, I mean the whole reason you are going BR is because you are struggling financially! I was lucky, I got paid just before going to court and so just used my salary to pay the fees. I live with my dad so don't have mortgage to pay and dad has kindly let me off living costs during this difficult period. Reading other people's stories though has made me aware that a lot of people have to scrimp & save for months before being able to find the fees (Mike St Helens springs to mind?).

Have you sought professional advice about BR? I really hope so - it is vital that you are fully aware of what you are doing and the implications.

As for finding the lolly for the fees, well....mmmmm...think the only answer is to really tighten your belt. Why not post up your SOA on here and the more savvy money savers I'm sure can offer suggestions. I know it's hard, but really buying Xmas presents should be the last thing on your list at the moment - you simply cannot afford to do it! Your priority is to find the BR fees asap so you can start the process asap and thus relieve yourself of this burden. Good idea about cutting down on the drinking and nights out. I'm trying to do this myself, just to get into the habit of spending less on 'needless things'.

Can anybody in your family not lend you a bit of money to help towards the fees?

Goldielocks

flis21 wrote:

Would that include not paying my council tax / gas bills etc? As I don't want to stop paying them. I am not paying anything towards any of my debt at the moment and I have about £50 spare per month so would take about 8 months!! I am going to try and reduce my outgoings and sell a few things so I can get there faster, just find it really annoying position to be in. I know I have to go bankrupt and would rather do it sooner than have it hanging over my head for ages!

It is usually advised that you really try to keep on top of your utility bills prior to BR. Don't worry about loans/credit cards etc, don't pay them. The problem with utilities like water, gas etc is that if you default on them, it can be a bit of a pain in the future getting services, especially as an undischarged bankrupt - as obviously your credit rating will be poops.

flis21

Thanks goldielocks. I was going to do an SOA, but have seen other people crucified on here for what they spend on things and would be worried about the reaction I would get. I am suffering from depression, amongst other things, and don't want to provoke anything that would upset me. I know Christmas is not a priority, but I can't cope with not giving people anything. I am making up cheap gift baskets with things I have got free or very cheaply for most people, only exception is my 4 year old niece who I am buying a toy for. It was supposed to be our turn to cook Christmas dinner this year, but I can't afford it so am either going to ask people to contribute to it or ask someone else to do it and we will do it next year.

About the professional advice - CCCS and our insolvency practitioner both recommended that we go br before we did the IVA, but I was rather stubborn and didn't want the stigma of br hanging over us, so tried to do the IVA thing instead, but it didn't work.

Goldielocks

OK well it's your choice about the SOA. How sad that pople are now concerned about posting them on here just because of the minority of twonks who seem hell bent on ripping into people's spending habits!

Only you and you alone know how much you really spend on things. Look closely at your spending habits and honestly ask yourself if there are areas you can cut down on. Just remember that the quicker you can get the fees together, then the quicker you can start the BR process.

Going from a 21K to an 11K job is a huge pay cut! Is there any way you can find a better paid job or even take on a part time job just for a while to get in the dosh for the BR fees?

Well done on the gift basket idea for Xmas. I personally find Xmas a nightmare. I have 6 nieces/nephews and there is always pressure on me from my family to buy lots of presents. This year I am going to be Tight Aunty Goldielocks! They're all so spoilt anyway and get LOADS of presents!

G