Considering Bankruptcy as an option......will it ruin (or save) my life

Cody

Dear Forum;

I have posted on the forums several times with my predicament, but this is the first time I have posted on the bankruptcy page with the view that this might be real a possibility.

So, in a nutshell.

Ran my own company for 6 years, built up ~£35K CC debt during this due to subsudising my low wages during this, and have recently acquired £40K of debt due to liquidation of company and personal gurantee on company overdraft. To date have never been late with a payment on any CC.

I now have a secure job, but not high enough to pay min repayments anymore.

I rent, have no assets of note.

I live with my partner who is on statutary min maternity, we have two under 4s. My partner has a good credit history, no debts at all. We have no shared finances.

Recent History

I have been speaking with CCCS regarding a possible lump sum IVA (my new employer has agreed to advance me a lot of salary to help me). Today the CCCS suggested I consider bankruptcy as a realistic alternative. I have been loathe to consider this option but now I am contemplating it with seriousness.

What will it mean?

If I choose bankruptcy, what effect will it have on my life, and for how long?

Will bankruptcy affect my ability to travel to other countries that have specific visa requirements?

Will it make finding a new home difficult (we need to move house soon).

If I recieve a pay rise or a bonus whilst under the bankruptcy, will I any excess be put into the bankruptcy?

What is life like as a bankrupt in general (I am starting to think nothing much changes, life is just the same, just with some more financial restrictions. People dont shout at you in the street and throw eggs at you (or maybe they do?)).

I am sure egos might be dented, but this would be overshadowed by the release of the debt? True?

Is there a hope in hell of ever getting a mortgage if a bankrupt, and if so are we talking 5-10 years?

Would anyone who has entered bankruptcy recomend it, is there anyone who wouldnt?


Apologies if my post is a bit meandering, this is new, uncertain ground for me.

Cody

louiser123

we went bankrupt in 2001. both hubby and i and we had our home as an asset and car. our total debt was £21k joint. we toyed with it for ages took advice and then eventually saw no alternative and just bit the bullet. we were in an IVA which was set ridiculously high so defaulted on that and the creditors petitioned our bankruptcy. maybe we were lucky i dont know but we had a super trustee and we came to an agreement for us to pay back the equity in our home by monthly installments totalling£12k over 3 yrs. we handed back the car and bought a run around. in those days bankruptcy just wasnt a talked about subject and was shameful. BUT it was the best thing we ever did. we were freed from so much anguish and stress which i am sure would have affected one of our health eventually. we were bankrupt for 5 yrs as the law hadnt changed then and we had a real fresh start. our debts were not through buying unwarranted items and being frivoulous it originated from a real life changing event (rather not open old wounds and go into that!) but for us it was a life saver truly. good luck in whatever you decide but i can say i have no regrets not one x

StillStanding

Cody wrote: »

Dear Forum;

I have posted on the forums several times with my predicament, but this is the first time I have posted on the bankruptcy page with the view that this might be real a possibility.

So, in a nutshell.

Ran my own company for 6 years, built up ~£35K CC debt during this due to subsudising my low wages during this, and have recently acquired £40K of debt due to liquidation of company and personal gurantee on company overdraft. To date have never been late with a payment on any CC.

I now have a secure job, but not high enough to pay min repayments anymore.

I rent, have no assets of note.

I live with my partner who is on statutary min maternity, we have two under 4s. My partner has a good credit history, no debts at all. We have no shared finances.

Recent History

I have been speaking with CCCS regarding a possible lump sum IVA (my new employer has agreed to advance me a lot of salary to help me). Today the CCCS suggested I consider bankruptcy as a realistic alternative. I have been loathe to consider this option but now I am contemplating it with seriousness.

What will it mean?

If I choose bankruptcy, what effect will it have on my life, and for how long?

If you are in employment, you would have to pay an Income Payment Arrangement (IPA) for 3 years. This is all of your available surplus income after essential outgoings.

Will bankruptcy affect my ability to travel to other countries that have specific visa requirements?

I need to know the answer to this myself as I'm planning on moving abroad next year. I've spoken to a US Immigration lawyer, and she said bankruptcy does not affect immigration to the US. It may be best to check with the Embassy of any country you are planning to move to. You must inform your Official Receiver of any changes in address during bankruptcy

Will it make finding a new home difficult (we need to move house soon).

If you are renting you may be able to find bankruptcy friendly landlords/letting agents

If I recieve a pay rise or a bonus whilst under the bankruptcy, will I any excess be put into the bankruptcy?

Any change in income would have to be declared to your Official Receiver during your bankruptcy

What is life like as a bankrupt in general (I am starting to think nothing much changes, life is just the same, just with some more financial restrictions. People dont shout at you in the street and throw eggs at you (or maybe they do?)).

Well I haven't gone bankrupt yet so can't comment on that one. From reading the other posts most people seem to find it better than expected

I am sure egos might be dented, but this would be overshadowed by the release of the debt? True?

Is there a hope in hell of ever getting a mortgage if a bankrupt, and if so are we talking 5-10 years?

Would anyone who has entered bankruptcy recomend it, is there anyone who wouldnt?


Apologies if my post is a bit meandering, this is new, uncertain ground for me.

Cody

I'm sure someone more experienced will be along soon to answer your questions. I've just commented on what I do know.

wildheart83

Bankruptcy certainly saved my life. I had been earning good money, then was made redundant due to the collapse of the construction industry and really struggled to pay my day to day bills let alone anything towards creditors. It still amazes me how quickly the vultures circle, and even though I phoned and wrote to each of my creditors explaining the circumstances, they point blank refused to accept token payments.

By going down the BR route, it allowed me to take a job that was paying a very low salary so that I was at least working. I wouldn't have been able to do this with £20k+ of debt around my neck.

The consequencs are severe, but I don't have to worry about where I'll find money to pay for a credit card I missed, or finding an extra £20 to cover a late payment fee etc and for me that's worth it.

Cody

Thanks everyone, has given me food for thought.

I am interested to know the pain of bankruptcy (so I can tell whether it is something I can handle). I imagine it makes getting credit impossible. full stop (not that I wish to have credit again), and hinders everyday life in many intrictae ways, a trip to the shops or booking a holiday become more difficult. I suppose its about weighing up the good (no stress about meeting repayments) with the bad (difficulty getting credit, tenancies, and generally being 'mistrusted' and stereotyped).

Does what I say echo true?...or not?

the_suns_is_out

Hi Cody, I am into the 4th month of my bankruptcy now, and I can honestly say, it has totally changed my life for the better. I spent the 12 months prior to it losing sleep thinking about money. No matter what I was doing I was still worrying about paying bills, how much I didn't have to buy food, etc.

I still spend a fair amount of time thinking abount money, but now it is in a positive way, keeping my spreadsheets up to date so I know how much I have saved for when I need it, like when I got my tax disc and was able to pay cash, because I had it ready sitting in the bank.

In terms of effect on my life, I can't think of much bad. Telling my family was bad, but they have been so supportive. I've spoken to a number of people about it, and I have not found anyone to be negative towards me about it. If they were there would not be much I could do about it!

I have not had any issues with tenancy as my landlord knew about it all. I guess I would expect to have some issues should I need to move.

Trips to the shops, I have found no issues with. I try to take out the cash I have and only spend that, although because I am very forgettful I do use my card when I have no cash and "pay myself back".

Booking a holiday - I couldn't tell you. That's the last thing on my mind at the moment, I am just enjoying watching my little "holiday fund" amount add up on my spreadsheet.

louiser123

Cody wrote: »

Thanks everyone, has given me food for thought.

I am interested to know the pain of bankruptcy (so I can tell whether it is something I can handle).i have to say it was and has been since painless! I imagine it makes getting credit impossible. full stop (not that I wish to have credit again),it does but thats a good thing and after a few yrs you can re build your credit status. and hinders everyday life in many intrictae ways,never found that it hinder our life in anyway whatsoever, in fact it made it much better a trip to the shops or booking a holiday become more difficult.i found no problem with this at all, we had no debit cards so we either paid cash or cheque (had savings account with cheques) or used a prepaid card (no credit check required) I suppose its about weighing up the good (no stress about meeting repayments) with the bad(difficulty getting credit, tenancies, and generally being 'mistrusted' and stereotyped).getting credit should be last thing in your mind once you have bitten the bullet you shouldnt need it! i cant comment on tenancies as we own but i have seen other rent with no problem, you only need to tell those you wish to know there arnt many of our friends read the gazette and to be honest if they have a problem with it are they really friends?! unless your job contract has a clause which i doubt unless you work in finance you have no need to tell anyone. you will find the stress of finding repayments dissapears!
Does what I say echo true?...or not?

so in a nutshell none of what you have said echoes true to us, you learn to adapt and life is so much better x

kepar

louiser123 wrote: »

so in a nutshell none of what you have said echoes true to us, you learn to adapt and life is so much better x

I imagine it makes getting credit impossible. full stop (not that I wish to have credit again),it does but thats a good thing and after a few yrs you can re build your credit status.

.getting credit should be last thing in your mind once you have bitten the bullet you shouldnt need it! Contradiction

You need to take credit on to rebuild your credit status at sometime.

Many on here talk about never wanting credit again, then in another sentence talk about wanting a mortgage.

Cody

Thankyou all for telling me your experiences, has been very useful.

Personally, I would like credit again at some point....one day/year in the future, but used totally differently and for assets, possibly like a car and definately a mortgage one day. Will never wish to use credit to subsidise general living expenses, and will never, ever sign a personal gurantee for a company overdraft again.

JustinCredibleGillespie

As the saying goes............

Hindsight is always 20/20.

We never know what life has in store for us. Most on here are recovering from a financial nightmare and we're all open and honest about it. One thing we do know......We wont make the same mistake twice.

JCG

xx