is bankrupcy the way to go?

Chaotic_pennies

Hi as a couple we are thinking of going bankrupt. We have accumulated over £37,000 since starting uni, plus student loans on top of that!

We started using credit as I fell pregnant in my second year and had to take a year out of uni as I was going to have to take over6 weeks out I was recomended to take the year out. Which left us in limbo, as when on a year out you cannot claim benifits or get a decent job when already evidently pregnant(was cleaning a few hours a day untill 81/2 months). With nursery costs etc the use of credit continued.

Now ten years on the above has accumulated and the better job has not yet been attained and we also now have a highly allergic daughter (who costs a fortune to feed, we get some help via lower rate DLA).

We applied for an IVA but were turned down on the basis that after reviewing our financial statement we do not have enough 'spare' income to meet the rquired min payment. We have just (made first payment last month) started a management plan with the CCCS and pay them £218 (less than our total amount of DLA and WFTC).
This seems to have sent the creditors into a new found frenzy of letters and phone calls contradicting each other, ranging from we are glad to accept the new payment proposal to you must pay £--- now or further action is imenant.

I suppose what I would like to know is:

Has anyone been in this predicament and gone for bankrupcy? with a positive outcome?

Is it normal for the creditors to hound you even after recieving the finacial statement (showing no disposable income)?

Well even if their is no real answer it was good to ramble!!

Thankyou,
Chaotic pennies

earwig

i think before any one can answer you question they would need a soa see ss sticky it tell you how to do one my oh is bankrupt and the cccs told him to go bankrupt so the fact they havent told you to suggest they think you can pay your debt back at a reasonable amount in a reasonable time

earwig

hi cp
sorry forgot my manners:D welcome to this site you will find poeple on here who can help you answer your questions

CLAPTON

yes it is normal for your creditors to hound you for a few months

repaying 37,000 at a rate of 218 per month, your DMP will take over 14 years to complete.
that a very long time to live on a very restricted budget. unless you can see an improved financial future (i.e. your income will increase signicantly or you could clear the debts with house equity) then bankruptcy is a sensible alternative to consider


but post a SoA

jellycat40

Hi there, I went bankrupt at the end of May. Can't say my life has changed much apart from being able to sleep at night and not having any credit!

I have a bank account, live in the same house I did before (rented) and have kept my car.

It is not without drawbacks as we will need to move next year and credit scoring could be a problem in a new rental, obviously I can't get even a tiny overdraft so have to manage my money much more closely than I used to and if I havn't got the cash I can't get whatever it is my little heart desires but it is still worth it.

Good luck

Louise

Chaotic_pennies

Hi amazed to see responses already.

The cccs stated it would take 16 years to clear debt, provided creditors stop adding charges and interest (which seems unlikely). Maybe they are hoping we will have more cash when the kids leave home. Ha Ha !!

rog2

I will be made bankrupt in October - my situation is somewhat different to yours - I was managing my debts, with a lot of help from this site, until one creditor (HMRC) decided to petition for my BR. I probably feel more sorry for one of my other creditors, who treated me well (Not a Bank or CC company), than I do for myself - after two years of an uphill struggle, I will now have the opportunity for a fresh start.
I wish you well in whatever you decide - one thing, though, Student Loans can not be included in Bankruptcy.

Biffa

Hi Chaotic,

Can you post a SOA on here so we can see how bad things are? Different eyes may find a different soloution for you.

Have gone bankrupt and now been discharged and it didn't hurt at all!

Chaotic_pennies

Hi as far as I can tell this is a SoA, let me know if anything is missing. But would first like to say that the bank situation is so bad because for a number of months they kept taking the payments out of our already close to the limit bankaccounts despite the Direct debits being canceled and already over drawn. We offered to pay half of the loan repayments but didnt accept it.

While I am on the subject can you be sold (mis-sold) a loan for £10,000 (for debt consolidation) if you have no income other than £60 child benift on the basis that your husband will pay dispite him already having an equal loan himself? I now am fully aware that this was complete stupidity on our part but we were so desperate to keep all afloat it seemed like a good idea untill 3 months later when we had to find £450 a month. This we did manage for a number of years untill WFTC increased out payments by more than double when my daughter was awarded DLA, which we queired and were assured was correct. Untill we sent in the supporting docs the following year and they said we had been over paid by over £200 a month which would be reclaimed by paying us nothing, then increased to £70 a month (which is £200 less than our entitilment). Thats when we became seriously screwed. This has been further compounded by my husbands company changing their pay date by 2 weeks.

Debts

lloyds loan (me) 7619.00 204.00
lloyds loan (him) 5455.00 201.00
loyd acc 510.00
lloyd acc 202.00
lloyd acc 718.00 (they move on to the next when one is triple its original OD)

CCards (Me)
barclaycard 2730. 82.00
lloyds 2800. 84.00


CCards (Him)
lloyds 2800 85.00
mint 4800 145.00
Cap one 6150.00 185.00
scot 3920 118.00


INCOME

take home 1410.00
Child ben 110.00
DLA 76.00
WTC 70.00

OUTGOINGS
cccs 218
rent 495
c tax 105
water 36
gas/elct 48

house ins 8
tv 11
phone 30
life ins 20

Car tax/ins repairs 90
fuel 220 (we live 66 miles from his work and cant move as no credit rating to get new home as we rent)

Household is about 450 ( as we strugle to feed my daughter multiply allergic)
food etc

Even with charity shops and car boots it averages out at about £40 on clothes school uniforms etc

We also have an emergency fund of £30 a month which is usually gobbled up by hospital appts for both kids, car parking etc (the bus costs even more would you believe!)

Its hard to know what to do when the ins and outs dont add up and every thing has been cut back. Mindue its a good job their isnt any left for wine cause i would definitley be drinking it!!!


So I guess my question is after all that bringing it home as to quite how horrid it all is:

What will they take from my house if we go bankrupt will they touch the kids toys and books etc, or take the washing machine and fridge. It says that you can keep furniture so do they take ornaments/ pictures of the walls. Because stuff like that would really freak out the kids and my sons condition (peadiatric chronic urticaria, like allergic hives all over the body) is so severe if hes stressed.

I know they say every situation is different, but all the good stuff in the house went when we were students for food and rent etc.

Im rambling again, sorry. I do feel that I have to say that we really did try to stay on top of this but every time we get straight an unforseen crops up and we are back worse than befor.

Thanks to all that responded to my last ramble!

going2die_rich

Not sure if this applies to you and your partner but also consider any possible future employment issues. Many places such as banks etc (even the call centre part of the banks) run credit checks before hiring to ensure that they don't have bad history or CCJs etc.

This might not be applicable to you but it is something to remember if your jobs are in the financial sector.

Chaotic_pennies

hi the total amounts and the monthly repayments look a bit muddled on the post. its not all one number THANKFULLY