Facing bankruptcy and need advice

Jojo1410

Hi all
I've posted in the bankruptcy forum (titled "Need some help on what happens next). Basically, after building up a huge debt which was manageable and is now not, my largest debt has been passed on to a debt collection agency. Before I speak to them I need to make sure I'm fully prepared and at the moment I'm feeling incredibly uncertain about what to do next.
I'm separated from my husband and since he is now unemployed I don't receive any maintenance for my two teenage children. He was previously paying £700 per month. Coupled with a new rise in mortgage payments of an extra £100 a month and another £20 being taken from my wages each month for increased pension payments, things have now got to unmanageable proportions.
Six months ago I got in tough with CCCS and they advised two options, bankruptcy or an informal payment arrangement to buy me some time. I did the informal arrangement with Halifax (Loan of £23047) and Barclaycard (£2036). I pay Halifax £11 a month and Barclaycard £5. I tried to pay off my store card but have now ignored it for a couple of payments and haven't given them anything.
My student loan payment will kick in next month and I've calculated about £100 a month out of my salary, although as it has not yet started I don't know the exact figure.
So here is my SOA. I've put £40 for entertainment although it is usually spent in driving my kids to friends houses. I live in a small country town and their friends are 10 miles away so they can't bike there yet. Other than that we don't go anywhere as we can't afford it. I don't smoke and as much as I'd love a glass of wine now and again, I don't buy alcohol. Any real expenditure on entertainment is non existent. My fuel costs are high as I travel 26 miles each way to work.



Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1705
Partners monthly income after tax....... 0
Benefits................................ 133
Other income............................ 0
Total monthly income.................... 1838

Monthly Expense Details
Mortgage................................ 591.5
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 93
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 45.5
Telephone (land line)................... 26.5
Mobile phone............................ 22.5
TV Licence.............................. 18.18
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 320
Clothing................................ 20
Petrol/diesel........................... 320
Road tax................................ 22.4
Car Insurance........................... 32.73
Car maintenance (including MOT)......... 29
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 8
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 23.53
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 20
Entertainment........................... 40
Holiday................................. 10
Emergency fund.......................... 10
pocket money............................ 20
School meals............................ 50
Teachers union NASUWT................... 13.95
Total monthly expenses.................. 1856.79


Assets
Cash.................................... 0
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 177000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 167367...(591.5)....0
Total secured & HP debts...... 167367....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax personal loan..........23047.7...11........0
Halifax overdraft..............300.......0.........0
Barclaycard....................2036.3....5.........0
Next...........................131.78....0.........0
Student Loans Company..........6129......100.......0
Total unsecured debts..........31644.78..116.......-


Monthly Budget Summary
Total monthly income.................... 1,838
Expenses (including HP & secured debts). 1,856.79
Available for debt repayments........... -18.79
Monthly UNsecured debt repayments....... 116
Amount short for making debt repayments. -134.79

Personal Balance Sheet Summary
Total assets (things you own)........... 177,000
Total HP & Secured debt................. -167,367
Total Unsecured debt.................... -31,644.78
Net Assets.............................. -22,011.78


Halifax have passed the loan to Blair, Oliver and Scott debt collection agency and they are awaiting my SOA too so they can set up an arrangement. However, I'm wondering if they are likely to accept the current arrangement of £11 a month or are they likely to push for more? I can't see where the extra money can come from as things are tight enough already. So, should I go down the bankruptcy route and get out of this or pay minimal amounts and not move forward at all? I can't see my financial situation changing any time soon.

Also, my mortgage is in joint names with my ex. We have been separated over 4 years now but not divorced. The Halifax (my mortgage provider) has twice refused to put the mortgage into my name only as they see it as too risky. This was before my debts became unmanageable. My ex has just been through an IVA too and is in no position to take over the mortgage or buy my share.

Any help or advise you can offer, I would be so grateful for. Thank you so much!

Jojo1410

Hi Moderator

Just reviewing my above post, I put this in the wrong forum.. I should have put it in debt-free wannabe as advised. Can you move it for me or should I repost?

Sorry, but I'm new at this.
Thanks.

generaloneill

I believe if you are bankrupt, they wont write off a student loan, you will still be liable for this.

taffy056

You are spending a fortune on fuel for your vehicle, is there anyway you can cut that down ? Maybe car sharing might help.

Jojo1410

I've explored the issue of car sharing. There is no one from my area going to my town. I have to travel cross country and am not near any major roads. There could be the option of changing my car for diesel but would need some available cash for this? I don't know of a way to change my car simply. Any ideas?
Also, if I am facing bankruptcy, then it may be a good time to give up the house and rent somewhere. This way I could move closer to the main road links and have a better chance of a car share. The mortgage is interest only. I could probably find somewhere to rent for a similar amount.

fatbelly

Are you not claiming child tax credits?

Does the council know you are a single adult (25% discount) for Council Tax?

If you really have 10k equity I wouldn't rush into bankruptcy. Probably go to token offers on the non-priority debts and try to get the income/expenditure balanced.

Jojo1410

I can see I made a mistake on my benefits. I receive £134 for child benefit and £99 for child tax credit. I receive the single persons discount for council tax. In your experience, and apart from petrol, am I overspending anywhere? I can't actually believe I earn what I do and am yet so stretched for cash I struggle to reach pay day month to month.

And if I go for token offers, what is the long term outlook? Is it a matter of biding my time until I earn enough to pay my debts? My wages increase is fairly insignificant each year so I can't see how things will change enough to make a difference.

stuartjl

I'm wanting to be a debt free wannabe too. By looking at your SOA, you need to downsize, get a cheaper house. Talk to your creditors and ex about the house, its your biggest asset and stone around your neck.

Jojo1410

I'd be more than happy to find somewhere cheaper to live. But, is the only option to sell my current house and then rent? Renting a 3 bedroom house for me and my two teenagers would be just as expensive as paying my mortgage.
I guess the debt collection agency may have ideas on this. Halifax are of little help with my mortgage.

fatbelly

Jojo1410 wrote: »

I can see I made a mistake on my benefits. I receive £134 for child benefit and £99 for child tax credit. I receive the single persons discount for council tax. In your experience, and apart from petrol, am I overspending anywhere? I can't actually believe I earn what I do and am yet so stretched for cash I struggle to reach pay day month to month.

And if I go for token offers, what is the long term outlook? Is it a matter of biding my time until I earn enough to pay my debts? My wages increase is fairly insignificant each year so I can't see how things will change enough to make a difference.

You can go back to your soa and edit it. You're now only £34 off a balanced budget. It's about controlling expenditure and the car is an issue.

Long term is always difficult and unpredictable. It'll be even more unpredictable if you move into rented. With an Assured Shorthold tenancy, two months' notice and you're out (no grounds required).

There is some equity in the property but after costs, and dividing by two, you'd be lucky to be in four figures.

Blair Oliver Scott will probably not be helpful. You can show them your soa and start paying £1 per month. If they kick up a fuss it may be worth getting someone to act for you. I'm thinking CAB, as they have no minimum.

rising_from_the_ashes

fatbelly wrote: »

You're now only £34 off a balanced budget. It's about controlling expenditure and the car is an issue.

And .... these should be fairly easy to make up with a few cuts:

Jojo1410 wrote: »

Council tax............................. 93 Is this over 10 months or 12? If 10, switch to 12 to lower the monthly figure a bit
Electricity............................. 50 This is high, check what you leave on, readings against bills, comparison sites etc
Gas..................................... 50 As above - don't leave heating on in rooms you're not in/bedrooms etc. As a comparison I pay £64 total for both G&E (3 bed semi in Scotland)
Oil..................................... 0
Water rates............................. 45.5 High for 3 - have you got a meter?
TV Licence.............................. 18.18 This should be £12.12
Groceries etc. ......................... 320 This is really high - try the Grocery Challenge on the Old Style board - a family of 4 can manage on £220/month incl household cleaning stuff/toiletries etc (incl nappies) - should be able to get £150/month of this with gradual reductions
Petrol/diesel........................... 320 Keep a lot of how much running around you are doing for the kids - it may need that this needs to be restricted if it's the only way to cut down
Buildings insurance..................... 0 Need to get this ASAP
Contents insurance...................... 0 As above
Haircuts................................ 20 Try student nights, cutting kids yourself etc
Entertainment........................... 40 As per fuel comments
Emergency fund.......................... 10 Need to try to increase a bit to avoid further debt if something breaks (use £30 from grocery savings)
pocket money............................ 20 Could the kids get a paper round etc?
School meals............................ 50 Check you're not entitled to any help with this
Teachers union NASUWT................... 13.95 Is this really essential?

Hope that helps ... I'd also try to avoid bankruptcy if poss as you can balance the books.

Have you looked at putting the house on the market and seeing if it sells?

Yes, it might not be idea (to some) to rent but if you could clear the debts, rent for a while then there is always the option to buy again in the future if you wanted to.