Enormous debt - advice needed

Bunyip_2

I have unsecured debts (credit cards, overdrafts and personal loans) of £215,000, which I have used to support myself, family and business as I have attempted to start up a business over the last six years. The business has not produced the income that I expected and the limit on my lines of credit have now been reached (been circulating debt on cards etc. to get by for some time now). As yet I have not defaulted on any payments.

I have a house, which is now on the market and will yeild a surplus of about £75,000 above the outstanding mortgage and I have taken a job in an area of social work, which will give me an income of £5,000 p.a. and will provide accomodation for my family and myself. I have tax credits of about £8,000 pa and the only other asset is a car of about £2,500 if I could sell it (but need it for my new job). Because of the change, my wife will finish her job in January (which produces an income of £3,000 per annum).

Please, no judgements or moralising - I don't sleep very well at nights as it is and I fully realise that I have mismanaged what I have done. But I would be very grateful for any advice.

mjdh1957

Hi and welcome to the Debt-free boards.

There's a lot of good advice on here so draw up a chair, have a cup of tea and do some browsing.

For specific help, people will want to see a full Statement of Affairs (SoA), with all your income, outgoings and debts in, then you can get realistic advice off them.

Good luck!

Uniscots97

Not quite sure what to suggest here. But hugs and someone who might be able to help will be along shortly. You came to the right place.

bonnie_2

are you not better of going bankrupt, i don't think you'll ever be able to repay that amount and if your getting acomodation with the job, your made.
Welcome to mse.

livinginhope

Morning bunnyip,welcome to DFW:hello:
Nobody here will judge you,lots of us are in debt up to our eyeballs and know just how you are feeling right now.
Would it be possible for you to post a statement of affairs with your incomings and outgoings so that we can understand your situation a little more.
How are managing to pay the bills at the moment? are you using credit cards? if so please stop,contact CCCS or Payplan for some advice,they will help you with your options.
Well done for facing things,especially this time of the year when you want it all to go away :grouphug: keep posting
LIH

anniestar

Good morning and welcome. Nobody will judge or lecture on here. This is a very helpful and supportive forum. You will get loads of advice and help. Please try not too worry TOO much(very difficult I know) but often the sharing with people who have been there and can understand makes a hell of a lot of difference. Good luck.

THE_LONE_RANGER_4

hi , i know i will get some stick on here for suggestng this i would sell all my assests tuck away some of the money and if your now or going to be a tennant go bankrupt

in-trouble_3

just wanted to say welcome to the board, no one will judge your here, they are a great support and offer great advice, they have helped me tons.

our light bulb moment was last month, and its terrifying adding up all yours debts, but they are people that do help.

Bunyip_2

Not sure if there is a template for this, but here is my SoA from 1 February 2007 (new job) - prior to this the income position is slightly worse:

Monthly household income:

Salary 416
Tax credits 650
Other income 600 (not guaranteed - consultancy work and will reduce tax credits)

Total maximum household income: £1,666


Monthly household expenditure:

Food / groceries / etc. 600 (family of four)
Electric / gas 150
Car running expense 200 (includes putting some money away for new tyres, repairs, servicing)
Schooling 700 (this seems ridiculous, but all the schools are full in the area in to which we are moving, other schools are too far away and would adversley affect my job in having to take my kids there - we will be based in a very rural area with limited / non existant public transport)

Total minimum household expenditure £1,650

All rent and council tax are paid for by my employer.

The debt is across 25 different accounts and the minimum monthly repayments are in the region of £4,400 per month. (I can list them if it is helpful).

I would prefer not to go bankrupt, unless I really have to as I am a charity trustee and also, by profession, an accountant (although not practiced for a long time, but want to keep it as a backstop).

mjdh1957

Hi Bunyip,

There is a 'sticky' at the top of the list of threads about how to do a SoA so have a look at that. You need much, much more detail for anyone to give you more specific advice. And include all your debts and minimum payments to give a true picture.

At first glance your outgoings seem very high - £600 a month on groceries is excessive and you could reduce this very easily. There are lots of ideas on the Old Style Money Saving board, so have a look there.

With that level of debt you may not have a choice about bankruptcy, as your creditors can force you into it. Have you looked at the CCCS website for details of their debt management plan?

Pobby

I am at a loss to see any other route than going bankrupt.£4,400 per month to service debt is huge and would require a massive pre tax income just to service this.

Although bankruptcy is a bit of a pain to accept on an emotional basis,it is very easy to do.A friend of mine did this a few months ago and he was amazed at how easy and painless to do.As far as the accountancy bit is concerned,my accountant is a discharged bankrupt and he is never short of work.