Good enough reason to go bankrupt?

inneedofsugardaddy

Hi,

I'm seriously considering declaring myself bankrupt, but would like some advice on whether or not I'd be successful. I currently work and after bills and household expenses I have around £200 left each month to pay my creditors, which I am currently doing.

However, at the rate I am currently paying, it will take just under ten years to repay my debts. Would this be a good enough reason to apply for bankruptcy, so that I could save myself 7 years of repayments?

My boyfriend and I are also planning on having a family, next year. I would like to be in a position that I don't have the added stress of trying to find the extra money for my debts at this point, and I will also be on reduced income once maternity pay came into effect. However, if I was bankrupt, would this all be taken into consideration? Are allowances made for those who are starting a family, and are you allowed to have some savings in preparation for baby essentials, e.g. pram, clothes, food, etc?

Also, what type of things are allowed under 'living expenses'? Would this include saving money for household repairs and replacements, and emergencies? I try and visit my family every couple of months, which costs approximately £50 - £100 a time... can I put this on the form? What about pet food and veterinary bills? Holiday savings? My boyfriend and I share a car (it's owned by him) and I help pay for the insurance. Is this allowed? Will it affect him, as one of the forms asks this question and the reg and value of the car is asked for, and don't want to get him and his finances involved, as we're keeping everything separate.

Many thanks in advance,

L

mel12

Hi,
It could be - does the £200 a month cover the minimum monthly payments, or have you had to agree reduced payments with your creditors? If you can't make the minimum payments then you would be allowed to go bankrupt though it may or may not be the best option and you need to take advice from one of the debt charities (your bankruptcy can be refused if you don't do this- but its mostly to make sure you understand the consequences of going bankrupt you're not obliged to do what they suggest but its a good idea to seriously consider it).

confuzzled2012

hi, i've looked into bankruptcy a lot as i'm thinking of doing this once my house is sorted, i doubt very much you could have savings or money to visit family, i doubt they'd allow for you to pay insurance if it's your boyfriends car, you can i believe include money for household repairs/emergency if it's your own home but if rented then this would be the landlord/council responsibility, correct me if i'm wrong, i've read that much my mind is jumbled up.

alastairq

You have to understand, petitioning for Bankruptcy is really something of a 'last resort'...

That situation arrives when an individual is Insolvent..ie cannot meet their debts as they fall due.

However, the long term effects of having a bankruptcy on your credit records may well prove insurmountable.

The BR will have an effect on simple things like household insurance....not just for the 6 years the BR remains on your records...but often...for life.

Should your relationship not prove to be a lasting one [pardon my cynicism]...then the BR will impact upon your ability to do things like, obtaining a mortgage to purchase a property.

In a BR, the Official Receiver works on the basis of the situation now...not what might be in the future.

If a BR person is under an IPA...and their circumstances change [for example, becoming pregnant, ceasing work, etc]...then the amount payable into the IPA can be adjusted accordingly.

Much of what you ask about may well have to be funded from within your SOA..not as a specific allowance.

This is how an SOA works.....the BR is 'allowed'[subject to negotiation] certain amounts for essential living expenses....but there is no obligation as to how those monies are spent.

kepar

If the £200 covers your debt repayments, then you are not insolvent

inneedofsugardaddy

Hi,

Thansk for all your responese. Unfortunately it doesn't cover the minimum payments. I have arranged monthly payments with all my creditors, and am paying a pro-rata amount to each, based on what I have left at the end of the month. But I'm really not sure if I can cope with having such little money for the next ten years. I was thinking that if I perhaps went bankrupt, I could be 'debt free' in 3 years instead. I understand some of the difficulties of going bankrupt, but I know I would never be able to afford a house, so wouldn't try and get a mortgage anyway. I'm as bad as bankrupt according to my dredit report anyway, due to a failed IVA. I'm just not sure I can really cope with the stress for the next ten years.

Thanks,

L

alastairq

I suggest you firstly go and talk to one [or more] of the debt advice charities, listed in Fermi's stickie at the top.

They will present to you a balanced view, with suggestions as to how to move forward.

When looking at long-term arranged payments, it must be remembered that the current financial situation may not exist for long.

Life-changing events can move the goal posts....then the individual is left with but little choice perhaps, to petition BR.

Also, whilst your creditors may well be content for the time being with what you are paying them, that attitude may not /will not last.

Payment arrangements are often reviewed after a short while.

Then what?

It may well be that..even though you currently feel you have X amount as surplus....going through your SOA with a debt charity adviser may well find you looking at a much smaller surplus..in reality.


If you feel you still have options for dealing with your debt, then perhaps you are not ready to consider bankruptcy?

The only other real alternative to BR is...to do nothing.

And that really isn't an alternative....or..even, fair to all those involved.