Will i qualify to become bankrupt and whats the worst???

m90axx

I'm 21years old with around 10k of debt. About 7k of it was a car on fiance which i gave back. Fee mobile phone bills. A pay day loan. And 700 council tax. I'm a 4th year apprentice as a plumbing, and my job ends on 29th July 2012. Then its a matter of seeking working so I will have no income. I'm also only on 640 a month the now. I still Live with my parents and I recently signed my new car into my mums name. I was in a car crash and got 3k so gave my car back to fiance company because I was paying 200 per month for it and bought a 52plate astra. Ive also went on pay as you go to avoid more mobile bills. I've opened a Santander account with no overdraft. As my rbs bank has over 400 pound of charges and I've not been using it. I think its untreated changes making me go over the overdraft so then I got charged. How much will it cost me to go bankrupt? What's the worst that could happen? I understand I won't get credit for a while but I don't want it, as I joined a credit union if I wanted a small loan for a holiday or anything.

Please help with advice and what you'd do. I think I'm young enough to rebuild my credit rating.

Darnit_2

You will be affected for 6 years, and it isn't as simple as not getting loans, bankruotcy is a last resort. At your age, you will be trashing your credit rating for 6 years during a period of your life when things will probably change a lot. You will probably, get into a relationship, want your own home, get a job that requires reliable transport, or maybe become self employed etc etc. I think to just go for what appears the easy option now would be very short sighted and you would likely regret it in future.

Here is what you should do.

Sit down with all your bills etc and your family (who obviously know you are in trouble) and get everything worked out. APRs, costs, length of contracts etc. Dont just expect to hand things over to your mum, it isnt fair and won't teach you the valuable lesson you need to learn form this.

Now work out what you need to do to further cut costs (maybe as a family) and increase your income. With your chosen apprticeship, I see no reason why you cant increase your income, if not now, significantly when you finish your apprenticeship.

You then need to work out what yo can throw at the debt immediately and then over a reasonable period of time. Dont spend money at Christmas and make it worse, you dont need to! Small silly gifts as guestures only for everyone as an agreement will sort that one out.

kepar

Did you get any advice with your first car? Did you not take a policy out to cover any shortfall in case of an accident/write off not covered by the insurance? Your repayment for the loan must have been high, your insurance very very high and now you have taken on another car.

Do you actually need a car?

IF

Hi m90axx and Welcome, please contact one of the debt charities. Please try these they don't charge and are impartial. They will go through all your options with you and if they suggest bankruptcy then come back to this board and we will help you all we can. Also if your not ‘clicking’ with one of the Debt charities do try another.

Please don’t do anything rash take your time and weigh up your options and read everything you can x

For ‘essential’ BR info this is Fermi’s sticky - Click here

Main recommended sources of help:

• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)
• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
  

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

And do remember we’ve all been through this and anything you don’t understand don’t be afraid to ask.

Best wishes
If...x

m90axx

I needed a car at the time as is moved out with my partner. I've now moved home to sort finances out before moving back out. I work for my dad and we didnt have work on for a year just there due to way things are the now. I know in the future ill have a better income with my job. I just want a fresh slate sort of thing. I know it will be hard to get a house when the time comes but I'm not too fussed about it the now. I'm more worried and stressed with all this debt. I never got advice when I took my car on. When I bought the astra I bought it right out second hand so no moneys owned on it. And I also signed it to my mum so nobody could take it from me as an asset. I signed a trust deed in may and they want 200 per month which I can't afford if I could continue 200 per month i wouldn't have had to give my car back to finance company. I've been to citizens advice aswell, they weren't much help.

Ineedaname

The thing that jumps out at me is that the car is in your mum's name yet you are the legal owner and presumably the main driver? Although the legal owner does not necessarily have to be the name on the V5, the main driver DOES, or your insurance may not pay out if you have another accident.

So just to be aware that putting the documents in your mum's name does not mean she owns the car and could actually cause you problems with insurance.

m90axx

My mum now insures my car for me now. I've been very warey of all his. So she is now the legal owner and if anyone asks I say she bought it.

kepar

I have read and reread your posts and I am still unsure about your car situation.

You had a car, had an accident and received £3000 from the insurance and gave it back to the finance company.
You have bought another one in your mum's name ans she insures it in her name whilst you are the main driver.

So where do you owe £7000 on car finance?

Ineedaname

If your mum insures the car in her name but you are the main driver then you could still come a cropper on that one as the proposer must be the main driver!

Kepar - There was another similar thread before the weekend and that was the case, still paying for a car that was written off because the insurance payout didn't cover the outstanding HP amount.

m90axx

No I think you are confused. In 2008 I bought a Renault twingo. A month later I traded it in for a Renault gt costing me £200 per month. Then I moved out and couldn't afford it so I gave it back to finance company. The 3k was when I was in a van crash at work. I wasn't driving but insurance paid me 3k for I bought an astra so had a car and no more to pay on it monthly.

kepar

So how do you owe £7000 on car finance?As per the statement

with around 10k of debt. About 7k of it was a car on fiance which i gave back