Advice wanted please!

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
2 replies 580 views
SpikeyjayceeSpikeyjaycee Forumite
45 Posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
This is my first post on here and I'm after a bit of advice. I currently have 3 loans (Lloyds TSB about £11k, Amberloan £1k and Barclayloan £1.5k) and owe about £500 on Capital One credit card.
At the moment I am struggling to pay the instalments (haven't actually defaulted yet) but as my husband is out of work and claiming JSA, he can only contribute about £200 a month to the household budget. Before he got made redundant in June 2006 he was giving me almost £700 a month. He himself is in debt to the tune of £15k and has an appointment with the courts on 7 November to file for bankruptcy (he's been in debt before, started paying regular instalments, but then with redundancy, has defaulted again so bankruptcy is logical step).
My question is should I open a new bank accont, transfer all my essential living expenses thereto and default on the loans coming out of my Lloyds TSB account, or should I contact my creditors and explain the situation and ask for reduced monthy instalments? I did think about bankruptcy for myself but as I haven't actually defaulted on any of my loans yet, I don't think I am eligible?
My income is £1,274 a month and my expenditure is the same - this does not take into account the loans and credit card which is an extra £250.
Any advice gratefully received.


  • jonesMUFCforeverjonesMUFCforever Forumite
    28.9K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Are you going for bankruptcy as well then?
    If not a reduced payment programme may be better for you but it will stuff your credit rating with LTSB.
    Your account will probably be transferred to their Collections dept who may let you keep cheque book and debit card but again they may not.
  • anniecaveanniecave Forumite
    2.4K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    I would have a look on the debt boards. I don't believe you need to start defaulting on loans before you can declare yourself bankrupt, but I suppose once you have come to that decision, then you might as well.
    You would need to look at whether you've any hope of ever paying all your debts back. Do you have any assets? Eg any part of a mortgage paid on a house, a car etc? If you go bankrupt I think you would lose all that. If your income is approx the same as your expenditure and you have no way of cutting down the exp and you have serious loans, then bankruptcy may be your way forward.
    Once you had gone bankrupt Lloyds would probably convert you to a cash/basic account anyway, and your credit rating would be stuffed, but I presume that would all be sorted out as part of the bankruptcy.
    Indecision is the key to flexibility :)
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