Second Opinion

Labrynth

Hi,

Its my first time posting here. A friend of mine told me about this site, and recommended I post here for a little advice as he said youre all really helpful. So here goes...

I am currently in around £15,500 worth of debt. I am currently on benefits and attending a college course. The debt is from one bank loan and one credit card (from the same bank). I have missed last months payments on them both and I am about to miss another month. I started to panic about this so I went to the citizens advice bureau today to ask if it was worth declaring myself bankrupt. He said that I dont need to as they are both non priority debts. Also apparently thats not really a lot of debt to have !!??? it feels like a lot to me lol!

Anywho...The citizens advice asked me to go home and tally up all of my outgoings, and then they will write out a financial statement that will basically say that I can afford to pay Nil towards my debts and I will have to send that off to the bank. They said that hopefully the bank will write the debt off, but said they may insist I pay £1 per month until I am working full time again, and when that happens I will have to up my payments.

Has anyone done this before? It sounds way too easy somehow. Does anyone have any experiences to share?

Thanks a lot for any replies

Dolly_Smith

I think there's very little chance they'll write the debt off to be honest. It isn't a huge amount (I have about similar on 1 loan, 1 card and an overdraft) compared to some

I'm interested as to why you went to the CAB after only missing one, possibly two payments - if the debts are with the same bank it's worth calling them first and seeing if they can help you with the situation

don't jump to quickly into bankruptcy - I really feel that's a last resort when there's really no way to turn

whatamess_2

Hi and welcome to mse.:D
Some one will be around to offer advice but what you do need to do is a soa and post it here.
Read the first time posters thread for advice.

Labrynth

Thanks for the reply Dolly.

I went to the CAB as I didn't really know what steps to take and thought they would be the best people to ask for advice. I think I felt too guilty to tell the bank as I knew I wouldnt be able to carry on paying the debts when I started my college course. I got into this debt when I was with my ex partner, and after we split (long sob story) I was signed off work for 2 months with stress and depression. I started my college course so I could change my life and make it better. I need to get the debt problem sorted though as it is causing many a sleepless night! I've been in this situation before and it feels a bit daunting as I'm not sure what to expect.

Labrynth

OK, thanks whatamess, I'll do that right now and post shortly

kathfisch

Welcome and well done for posting! :hello: :T

Get your SOA up here when its done and we'll have a look for you

[Deleted User]

Once your income and expenditure has been established, it needs to be verified, (as best as it can be) so that the lender can see that you are not making things up.

Don't forget - they do get told all sorts of things.

Once it is known how much you have to live on, and usually it's not a lot if you are on benefits, the lender will require to see proof of the figures and if it comes from CAB then they will usually accept what has been sent to them as an honest representation of your financial status.

It is quite normal for only £1 per month token payment to be offered to the lender. And it is quite normal for them to accept this. Don't forget to ensure that interest on the amount outstanding is frozen.

It is in the lenders favour to accept even the £1 per month as they are at least getting something back. Of course, this means it will be a long time before the debt is fully repaid but they rely on the prospect of your financial situation improving as time goes by so you can finally start to pay more off.

The debt will not usually be just written off. However, if you can cobble together a lump sum towards it, you can make them an offer of full and final settlement.

Bankrupcy is a little extreme for £15k of debt. It sounds a lot - but it's a drop in the ocean compared to some people who realistically have no option of ever paying theirs off.

You should use the CAB as the go-between between yourself and the lender. This will take any heat off you and they will be less likely to try and bully or harass you.

(Not to say they would but some people do experience this from lenders).

Labrynth

OK... heres my SOA

Monthly Incoming

Job Seekers Allowance = £228

Monthly Outgoings (debts included as I still have those)

Bank Loan = £316
CC = £77
Bus Fares = £50 (I just worked that out - think I might walk from now on!)
Clothes = £20
Phone Bill = £10
Food = £80
Pet Food = £20

Debts

Bank Loan = £12,500
Overdraft = £500
Credit Card = £2,500
Missed Payments on Bank Loan = £316
Missed Payment on CC = £25

OK I think that just about covers it.

Thanks

whatamess_2

I take it that you still at home as there is no rent, ct, utility bills there.

If you have a look at the old style board there is some excellent advice there for cutting your food bill.

Labrynth

whatamess wrote:

I take it that you still at home as there is no rent, ct, utility bills there.

If you have a look at the old style board there is some excellent advice there for cutting your food bill.

I'm currently lving with my mum as I split with my ex and he chucked me out. She has kindly said I don't have to pay rent til I am working full time again. I don't know what I would do without her! As far as the food bill goes I like to buy my own food as I am already getting a free ride with the rent, so I dont want to take advantage! I will take a look at the board for advice on cutting back though.

Thanks a lot

whatamess_2

Its a bit quiet here tonight. There is bound to be someone along to give some good advice.

Enjoy mse, by the way it does get a bit addictive.:D

Messy