£40k in debt - Do I Go Bankrupt?

cybermonkey

Hi all, I really hope someone can point me in the right direction regarding my mounting debt crisis.

I have a couple of loans and credit cards, and the total amount repayable is now at the £40k mark. I am in full-time permanent employment but my net salary is a lot lower than it used to be, and every month that passes now I am seeing my outgoings outstrip my income. I'm living month-by-month on the overdraft with my current account, and it's getting to the stage where my health and relationship is really suffering.

I'm considering just filing for bankruptcy but as that costs upwards of £500 (which I don't have), that doesn't seem to be an option. From what I've read on the various debt help websites, bankruptcy seems to be the last option. But seeing as I can't even afford that I am really at a loss as to what to do for the best.

If anyone could give me a few pointers to get this horrible debt monkey off my back I would be grateful.

JustinCredibleGillespie

If you were to stop paying your creditors for a month could you save the £700 needed to declare yourself bankrupt? Bankruptcy is a big step & its something you need to think long & hard about.

Have you sought any advice from any of the debt charities ie CCCS?

Take their online test and see what it says.

JCG

xx

cybermonkey

Thanks for the reply JCG, I've contacted the CCCS and am filling in their online survey right now.

I could stop paying the loans and credit cards right now, but a lot of people are telling me that this will affect my credit score negatively, which is why I'm continuing to pay these every month.

Anyway I will post what the CCCS recommend I do as soon as I hear anything. Thanks again.

tigerfeet2006

Well done on being pro-active and trying to get your life back in order.

If BR is recommended then going BR will trash your credit score more than any missed payments will. In fact even a DMP or IVA will trash your credit for the next six years.

Let us know what CCCS have to say.

ALIBOBSY

You have to have a consulation with a debt advisor prior to bankcruptcy anyway, but in the meanwhile its worth putting your SOA (statement of affairs) over on the debt forum where people can give you advice on your budget. I think many of us have been at the stage where it feels like the money keeps pouring out of the household and each month you get a little further behind. It is possible to pull it back and once you go through things with a fine toothcomb its suprising how much you can cut back and save, the secret is to minimise your spending and maximise your income. Then target the debts.
Bankcruptcy is a big step and if you are just keeping your head above water its likely some good budgeting may mean you can avoid it altogether.

Good luck whatever you decide.
Ali x

cybermonkey

Thank you all for your replies. I woke up this morning feeling lower than I have done for a long time, but after speaking with the CCCS and listening to what you guys have to say, it's made me realise I'm not alone and there is help out there: I just need to ask for it and stop burying my head in the sand.

Anyway, the CCCS recommends that I take out an IVA. I'm just reading through the personal action plan that they have prepared for me, which is very useful so far. It looks like my credit score is going to be battered whatever I do, but in all seriousness it was the availability of credit that got me into this situation all those years ago, so suffering 5-6 years of poor credit to wipe my debts seems like a no-brainer to me.

I will update this thread once I've spoken to someone at CCCS about the IVA...

david01010

Hi Cyber.

Dont mean to take over your thread. But how long do you have to wait to see someone from cccs?

I filled out the online assessment, and it also recommended an IVA. I was prepared for bankruptcy tbh. I contacted them to see if I could speak to someone about the results, and was told that they couldn't offer me advice over the phone because they were a different department to the online guys.

I got a call 2 days later from them and was given an appointment in 2 weeks!!

But I still haven't really talked to anyone about my situation and am feeling rather helpless. 2 weeks is a long time to wait.

Should I seek advice from another company..? Or just sit tight with the missed payments on my cards and loan??

Hope this might help you out too.. Any advice would be appreciated.

cybermonkey

Hi David, I've only filled in the online survey and chatted to one of their reps on LiveChat. I'm flat out at work at the moment so haven't had a chance to book in a phone conversation yet - I was going to wait until Friday to do this but after hearing your story I might speed things up now as I want this situation resolved before Christmas.

If I was you I would ask others on this forum what they would recommend in terms of getting a second opinion. But from what I've seen so far CCCS seem like the best bet, even with having to wait a couple of weeks to get the IVA ball rolling.

I'm pretty sure that the loans/credit card companies won't start sending default notices until 2 to 3 payments have been missed, so if you miss this months' payments while you're waiting for the CCCS you will still be able to speak to this charity before the 2nd month of missed payments kicks in. I hasten to add that I haven't missed any payments yet and the info I've just given is what I've read on several financial websites...please double check that info as I'd feel awful if my info was incorrect.

Good luck with everything and I hope you get a positive resolution soon.

ALIBOBSY

As there is a gap between contacting the CCCS and actually having a full appoitment I really would recommend having a go at seeing if its possible to manage without doing an IVA/bankcrupcy. We were in a situation a few years ago where we ended up looking down the barrel of these sort of options, but we decided to stick with it and get really frugel. After a few ups and downs here we are with no overdraft, only the mortgage as a debt and a credit file which is steadily improving. The fact is most banks will ask if you have EVER had an IVA or been bankcrupt especially for mortgages, so even down the line after discharge etc these solutions follow you for the rest of your life.

Especially for the poster who is currently up to date with payments, it sounds like you are at the "robbing peter to pay paul" stage and may well be able to claw things back, however it often takes a third party to point out how a budget can be improved-although be prepared for people on the debt forum to be honest about what you are spending cash on.

I find most people I know are spending far, far too much on household costs ie, food/toiletries etc. We are a family of 6 and can manage very comfortably on £60-£80 a week all in, and when we have been short or if I need the money elsewhere could do it on £45-£50 a week. Its amazing how much you can cut from budgets you think are stretched to the max. Its about making things from scratch and shopping cleverly.

Whatever you decide, good luck

Ali x

girls

I work in finance cybermonkey and I can tell you that if you are struggling to the point of not being able to live each month with enough money for the basics, and as long as you are renting than I would suggest Bankruptsy. 8 years ago I went through a divorce, was working for a high level credit card company and also advising customers on their debt problems. My ex husband left me at the time with children to take care of, a full time job and £20k worth of debt ( which was his but I was dumb enough to take it on in my name when we were together as his credit was useless) I had to go bankrupt after 2 years of trying to repay. I am now debt free, it stays on your credit file for 6 years from the date you go bankrupt then automatically drops off after 6 years. To be honest, if you have any defaults, late payments or high outstanding, which you do, your credit worthiness won't be that great at the moment anyway. CCCS are great, I would agree to speak to them but as the other replies mention, stop payiong the debts and save the money to start the ball rolling, the 6 years have flown for me, I have a mobile phone contract, had that for about 5 years now and my bankruptsy came off last month so I am in a position to start rebuilding things. i'd havea credit card i think, just to put some information on my credit file, but I'm that used to just using what I have, and after the experience of all that debt, I'd never be in that position again, even though it was down to my ex....good luck, it will get better

david01010

Ok. Thanks for the advice. I have only just been in the situation where I am missing payments.. Half of them this month.

Because I was so scared about it all and have been in the situation for so long.. I was kinda carrying on regardless.. I should have sought some resolution to this months ago, when I could keep up to date and have more leeway.

My loan term still has 50+ months to run and I cant carry on anymore. It has made me sick with worry and have come to realise that my health is far more important than a number on a credit reference agency's file. ( My opinion so it may be wrong ).

Im really upset that after asking for advice a while ago, on here, I didnt act on it and made things worse really.. Only through the worry of what " might " happen.

I forced my lbm, if that makes sense, and now just want it over and done with.

Having counselling sessions for depression/mental health and the likelyhood that I will have a hard time, because of gambling, was just sinking me deeper..

The very real prospect of not being able to own my own property seems like a horrible result.. But 5 years of living on nothing and working hard, just to be nearly back to square one, before I could even begin to look at that situation is too far off.

I hope this doesn't come across as arrogant, I have really tried. But 0% deals, long term low % deals, consolidation loans, are great if you have the capacity to use them wisely. I'm afraid I failed at that.

These options are there for a reason, and Im sure people with less of a conscience than me have used them. I just hope I can too.

Act.. Do Something. It won't just go away. Maybe that should have been my mantra, and wish it had been hammered into me

So good luck to you too cyber.