Is bankruptcy worth my while

WolvesFan1973

Hi All,

Happy new year.

I've perused the forum for a few weeks and there's some really comprehensive info, but I have some specific questions I was hoping I could get some answers to...

Here's my situation (in brief).

I have 2x overdrafts - £1,800 and £3,000 - remnants from my university days and variously extended over the years during times of financial trouble.

2x credit cards - £1,200 and £3,600 respectively.

I also have a personal loan, the balance of which is £2,500. It's almost half way paid off. The loan is from a failed start-up business as a soul trader.

Up until this year, I've serviced the debt.

I've been a freelance copywriter all of my professional life. However, in Sept 2011 my two main clients both closed their doors, putting me out of work.

I've never earned a lot, typically around £14,000. So servicing the debt has represented quite a high percentage of my monthly outgoings. I have no savings and don't own a property.

I've had periods where work has dried up, which is where most of the debt has come from.

Recently, servicing the debt has become almost unmanageable, to the point where I find myself regularly out of cash and having to live on credit for a week or so. I almost always have to pay my quarterly utility bills on the credit card, otherwise my cashflow can't cope.

I rarely buy anything other than the essentials. (haven't had a holiday for two years, clothes from charity shops etc)

My debt costs me around £247 per month.

As far as assets go, I have nothing apart from a cheapish car that I will be using when I start my new job.

If I went bankrupt, I'd relieve myself of the monthly burden and have some financial breathing space so I am not constantly living hand-to-mouth and using credit to plug the gaps.

So my questions are...

Is there another obvious solution here?

Is it worth it, given the size of my debt?

I pay car insurance by monthly DD, will I have to pay it upfront if br?

Will my new employer be told?

After six years, will I still struggle to get a mortgage?

I use my parents address for my bank and credit cards because I've moved house a lot and have had trouble not getting mail because it has gone into other people's box. Will going BR therefore affect my parents credit rating?

Any tips or advice much appreciated.

Cheers.

Annisele

So, total debt is is about £12,100. (£1,800 plus £3,000 overdraft, £1,200 plus £3,600 credit cards, and £2,500 loan). That means you might be eligible for a Debt Relief Order rather than bankruptcy - but it doesn't necessarily mean a DRO is suitable for you.

I think that you should certainly speak to a debt advice charity; information on those in the stickies.

For more help on these boards, you might want to post a Statement of Affairs over on the Debt-Free Wannabee board (stickies on that board explain how), showing your expected earnings and expenses once you start your new job.

Since we don't know what you'll be earning, it's hard to make a guess as to what your situation really is. I suspect that if your new job paid £100k a year you wouldn't be posting - but if it does, you couldn't go bankrupt even if you wanted to as you wouldn't be insolvent.

Similarly, if your rent is going to be £200 a month, that's a very different situation to if you'll be paying £800 a month. Are on your own, or are you also feeding/housing/clothing a partner and children? Do they work?

Are you claiming all the benefits you're entitled to?

As to the mortgage, I've no idea what lending criteria will be in six years time. At the moment, no deposit means no mortgage - even if your credit history is squeaky clean. Four years ago some lenders were handing out 100% mortgages like candy. Unfortunately that question is something of a crystal ball affair.

tigerfeet2006

Hi and Welcome to the Bankruptcy (BR) Board.

The first step is to make a list of all your creditors, debts and assets. Secondly and most important is contact one of the following 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 you are not ‘clicking’ with one of the Debt charities do try another. We advise you to try at least two for your own piece of mind. Your BR could be refused if you have not sought advice.

* Blue text on this forum usually signifies hyperlinks, click on the blue links below *


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.

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

For ‘essential’ BR info this is Fermi’s sticky.

BR friendly home insurance thread.

BR Friendly bank accounts sticky.

BR Abbreviations.

We often ask you to post your SOA so we can see if you have included what you need to:-
MSE SOA Calculator - Click here Select the MSE format at the end. Copy and paste onto your thread.


If you are new/old to this board and receive/see a comment that is not helpful or insensitive please don’t let it put you off posting, often these comments are made by people who don’t normally contribute to this board and don’t speak for us.

What to do if you get an insensitive or hurtful comment.


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

Best wishes TFx

Ineedaname

Regarding your employer, they are unlikely to be told if you go BR, but if contemplating this route you should check your contract for any BR clause as those are appearing more often these days.