Bankruptcy at 25 and running own business???!

oliviaolivia12345

I am strongly considering declaring myself bankrupt.

I am only 25 and I have just gone self-employed to run my own freelance business (Sole Trader), so it is a depressing prospect to say the very least.

On the other hand I have £10,000 of debt in Credit cards and student overdrafts (excluding a £12,000 student loan) but, I have no assets and very little risk.

I have various questions:

My plan is to:

a) First reclaim about £1000+ bank charges from various Credit cards before I go thorugh the whole process of BR. - several of my cards are already defaulted and I am paying reduced monthly payments - can I still reclaim charges on these accounts?

b) If I am successful in retrieving Bank charges, can I just write to the Creditor and tell them I am declaring myself bankrupt and that I will no longer pay - i.e. can i just stop paying monthly repayments until I am officially bankrupt?

c) Before going BR should I open a new current account or building society account to use when my other accounts are dissolved? Or, will that account be closed when I go bankrupt even if there is no overdraft etc?

Your help is really appreciated!

ZTD

Have you sought professional advice before deciding on this course of action?

Gemmzie

I didn't think that you could run a business if you were bankrupt

oliviaolivia12345

I am not bankrupt. But if I a, self-employed, they can't stop me from working?! I work as a sole trader, I do not a have a registered company name etc..

oliviaolivia12345

This is the advice I have been given by National Debt line

Shineyhappy

Good luck with whatever you decide, but I would get advice from several different people and organisations before you make any decisions like that.

oliviaolivia12345

I have! that was the over-riding advice I have been given by several agencies. This is beucase I have no assets and a very low income (less than £8,000 a year). Can anyone answer any of the questions I have laid out? I could really use some advice from here!

Shineyhappy

Have you thought about getting a regular job? I don't want to be nosey, but it seems you are focusing on the BR option only. If you were able to reclaim your charges you would only have 9k debt which may not be worth declaring yourself BR over with all the implications that brings.

Maybe you might get more idetailed advice on the BR board?

oliviaolivia12345

I work 40 hours + from home as a freelnacer but I am earning a low wage.

I would have to give up my current freelance job contracted until July, and give up my business to do that. It seems easier just to go BR in the situation I am in and build up my work. I have tried negotiating with banks to no avail.

9K debt is still alot!!

oliviaolivia12345

what/where is the BR board please? thanks.

CLAPTON

to address your questions and comments

... i dont really see why being 25 years old and self employed is a depressing prospect.

but :

a. yes, you can reclaim charges on defaulted debts although you are unlikely to actually receive any money as it will probably be retained to pay off some of your debt.
..and if you do get any money and then declare bankruptcy the OR will want the money.

b. yes you can simply stop paying. they of course take you to court but if you are going bankrupt then there is not much they can do.

c. difficult to say about the bank a/c ..it depends upon the OR and the bank. best to assume that it will be closed.