Thinking of Going Bankrupt - Why did you go BR?

takingtheleap

So, I have a mess of credit cards. I have commuting expenses greater than £700 per month and can't get a job closer to home. Combined with my other monthly commitments, I had to resort to credit cards just to keep going.

Well, I've been extremely stressed for close on five years. Reviewing my finances I see on three of my cards that I have paid more in interest than I have borrowed. I have simply run out of steam trying to keep things going. I can't see how I can get myself in the clear with the interest I'm paying.

I have started to seriously consider going bankrupt. I work in a profession where this would mean I could no longer practice and I would have to career change as well - daunting at 40!

It just feels like I'm going to spend the rest ofmy life working to pay interet. I understand you have to repay what you have borrwed but in the case of some cards, I have repaid the sum borrowed, plus interest and now owe more than I originally borrowed.

What was your tipping point?

Ineedaname

Hi there, everyone's case is different. I buried my head in the sand in a sense, remained on a DMP for nearly 5 years waiting for my health to improve enough that I could cope with BR.

Have you spoken to one of the free advice debt charities yet? That's probably your best course of action for now as they'll be able to take you through all your options, DMP, IVA, DRO or BR.

dojoman

Have a good read through the board, you will see a lot of peoples reasons for having to go BR, in the meantime here is the link to the debt charities where you can get free and impartial advice:)



https://www.nationaldebtline.co.uk/
https://www.citizensadvice.org.uk/
https://www.cccs.co.uk/

alastairq

hi.....your situation is being faced by countless millions every day.....it's good to see you have realised that, at some point it has to stop.

Moving nearer work isn't really going to help, as the debts remain.

Do you have any property assets?

Have you considered negotiating with your creditors for a reduced payment rate? Although this may mean ceasing to use credit cards to live with...which may mean you taking a hard look at income, expenditure and surplus earnings?

All of which may well lead to the conclusion you have already recognised.

Bankruptcy itself does rather go hand-in-glove with a change of lifestyle expectation.

Accept that, and BR isn't quite the ogre the finance industry want us to believe it is.

In your instance...and age..a career change adopted earlier rather than later is best....not a good idea to prevaricate.

Along with a career change, I suspect a total lifestyle change would also need to be adopted?

maybe it is time to call it a day, move on and simply, 'earn a living?'

Certainly. becoming a bus driver, for example, pays the bills, has zero prospects to worry about, less stress if you're careful...gets you out of the rat race you're currently in....[more like a 'rat-run?]

capeverde

like the above poster says, its pointless procrastinating unless you have a defined way to pull yourself out. Im similar to you in age, but dont let that be a barrier. I sold my companies in 2005 as I was suffering badly from panic attacks, as Id invested all of my life on the stock market, so I decided to trade full time which went amazingly well for a couple of years, it also allowed me to work from home. Unfortunately, I suffered 3 large setbacks in the space of a week and as I was using margined trading, the figures were quite lifechanging. I then relied on credit cards and a new business I set up coincided with the downturn and I soon found myself in a position where I was being dictated to by my debt. In fairness, I also wasnt ready to start a new company as my panic attacks hadnt totally subsided and they affected my ability to make certain decisions. So I was now in debt to around 60k and most of it was on cards with just one bank. I then received a lifeline, an old friend offered me a position in his company with a fantastic salary etc, so we moved to the other side of the country, only to be told he had run out of work after three weeks. I then managed to find a contract which paid the right money, but again a couple of weeks before this was due to start the guy found he had cancer so had to postpone things. It was at this time I spoke to RBS. I explained the position and asked to speak to somebody about the debt. I was staggered when told that nobody could discuss this with me as I wasnt behind with any payments and in my 15 years with them Id never onve made one late payment. I harrassed them into discussing these things, but to no avail, I simply couldnt get through. They said I had to wait until I was actually late, which isnt the way I normally operate, I like to deal with things before they become more of a problem. It was at this stage I made a decision. I put 3 offers to them in writing, the first was that they restructure the debt to something more manageable and enable me to pay off capital as well as interest, I also asked for a 3 month holiday. Not much to ask, for somebody with my track record with them and the millions of pounds that had passed through my accounts over those 15 years trading history we had. The second offer was a one off payment of 41p in the £, which I was to borrow off family and the third was that I was to go bankrupt. They turned the first two down so I didnt mess about and went bankrupt within a couple of weeks. They did try some last minute calls, but the process had started. I also figured there was no point in using the other routes as your credit history is wrecked whichever way you go, so you might as well use the method that will give you a better chance and a cleaner start. The best thing Ive ever done. The wife started a company whilst I was bankrupt, which I worked for without pay, as its all hands to the pumps in these situations. The OR was aware of the situation and there is no rule that you have to pay yourself. Now ive been discharged things are back to normal, the business has just leased its second factory and we employ eight people full time. Not bad for 15 months. The RBS would have been close to being paid off if they had applied some common sense, but thay would have been too much to ask. We're looking to break 7 figures in 2012. Another thing, I still have two reglar current accounts open and working. I informed the OR and after discharge, contacted them again and they confirmed they had written to the bank claiming no interest. The accounts havent been downgraded to 'basic' and they now have regular monies paid into them.

MTDancer

Just a thought: my hubby was an IFA and he found out he could still practise (with limitations) when bankrupt. Contact the FSA and talk to them

fiveyearplan

I went bankrupt because of a business that didn't quite go to plan.

the_bright_side

capeverde wrote: »

The wife started a company whilst I was bankrupt, which I worked for without pay, as its all hands to the pumps in these situations. The OR was aware of the situation and there is no rule that you have to pay yourself..

I can’t believe your OR allowed this. As a BR you are not allowed to be a director or be involved in the formation and management of a LTD. company. I know you say it’s your wife’s company and you just work there but they would normally look at the behaviour of the company and your involvement i.e if you stopped working for the company could it continue to operate etc.


And as you say there isn’t a rule, but the OR should ask why you are not getting paid. I assume your wife was getting a salary, this could be looked at as avoidance so you didn’t get an IPA.

The reason I mention this is that I wanted to go BR and work for my wife’s company but was told I couldn’t for the above reasons, so I ended up in an IVA so I could

takingtheleap

I just wanted to add a little more flesh to this to be sure I'm thinking straight!

I can service my debt. I have 4 cc's with around £15k on them. I have two personal loans which will be paid off within the next few months, freeing up approx £400 per month. I was planning on applying this to pay off the largest card. I'm paying it off at £200pm but this would push the repayments up to £600.

One of the other cards I'm paying off at 10% per month so it should be clear in 10 months or so.

The BIG fly in the ointment is job insecurity. I work for a small company and my boss is notoriously fickle and nasty. I am well paid though. My wife earns almost as much as me but her job is public sector and very secure. We need both incomes to keep things afloat.

My problem is that I'm not sure I can take the pressure much longer. I wake most nights just before 4am and lie awake worrying about it all coming crashing down around my ears. I know that if I can stick at it for another 18 months to 2 years I should be ok but it's the constant worry of not making it that far which is making me think of pulling the trigger on BR and at least the uncertainty would be over.