Should I file BR or should I stick it out?

fridgeracer

hi everyone,

I owe £5200 on a loan, and £4000 across x2 credit cards.

I get paid between £800-£1100 per month as a self employed courier. I have cut down all my living expenses to the bare minimum for survival. I live with my partner who is at college and trying to find a part time job however so far has had no luck in even getting 1 interview.

Our living expenses are cut down to the absolute bare minimum - we do not go out and spend, we do not waste any money on anything unless it's food or bills to keep our flat and for me to keep my car to actually go to work and do my job. This amounts up to £1189 per month. The loan is £212 and the credit card debt is a total of around £50. So that's around £1451 per month.

I am normally always borderline struggling with staying even at £0.00 / in credit on my bank account - but this last month it's just been terrible. Food somehow cost more, fuel was wasted faster, electric bill went up out of nowhere, car needed maintenance costs, and so on. It was unexpected.

I am desperately trying and have been trying to either get an IT job because that is what I am qualified for (basic 1st / 2nd line support) for nearly 1 year now and while that is failing, trying to get another job part time to build up a better salary along with the courier job. So far no luck.

I feel like I am drowning. My flat is worth £130K and I have the mortgage at £85K, so in theory if i did sell it and used the equity to pay off all the debt, then i could breathe better but ive basically thrown away money that could be used when back on feet to get another flat. Meanwhile we would just have to rent out.

Or, I dont know... bankruptcy? Do I even qualify at just under £10K of debt? If I didnt have this debt, and I had 1 other part time job i probably would be able to provide the upkeep and the bills. If I did file for it, what do I actually lose? Does my flat get taken? Can I protect just my car and everything else gets sold? I don't even have much. Just a TV, microwave, washing machine, tumble dryer, and just cheap ikea furniture. Anything else I have is just 1 small wardrobe of clothes and 1 pair of shoes. Do I lose my clothes as well? How far does bankruptcy take you to the stone age? Will i end up homeless?

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I don't know what to do, keep trying for this 2nd job to get more money and afford my debt and bills or sell the flat and start again or go bankrupt? But I am on thin ice. I have not missed a payment before and I don't have debt collectors calling me but I am about to. I am overdrawn £700 and I don't have anything to make that go away. So when £1451 comes again next month to pay, what am I going to do? I feel sick...

PippaGirl_2

I would get an appointment with the CAB and ask them to organise a DMP for you. Creditors ime respond really well to the CAB and my creditors instantly froze interest and accepted token monthly payments once requested to do so. This will give you the breathing space you need to think about long term plans. BR is a big step and your debt level is relatively low compared to the majority of people who consider BR, a DMP may be a better option for you. CAB do this free of charge.

fridgeracer

thanks Pippa, i`ll try that and update the thread when i know more. anyone else with more / other advice - please help.

capeverde

For those sort of numbers I wouldn't even consider it. I honestly wouldn't go for a DMP either as the effect on your credit file would be not that much less than bankruptcy. I appreciate it can be difficult, but given the equity in your property I would concentrate on your partner getting a job and even for a short time consider getting a second job yourself. Live like a pauper for 12 months or whatever to pay off your debt and then concentrate on getting a better position to move forward in life. Write your targets down and break them into smaller amounts to make them achievable.

Mouse1812

You have £45,000 of equity and £9,200 of unsecured debt.

Option 1, Bankruptcy: Flat will belong to the OR and will eventually be sold. After costs of bankruptcy (£ thousands) and repaying your creditors you will be left with very very little.

Option 2, Sell the flat: After selling costs (£ hundreds) you should be left with more than £30,000 cash.

I would suggest bankruptcy is the LAST thing you want.

arcon5

Agree with above. Bankruptcy would see you in a worse position.

wazza24

I doubt a judge would grant you Bankruptcy to be honest; you have a property which is in equity. That would clear your mortgage and debts if you sold it. There’s no chance, sell your property, clear your debts and your in the clear. Going Bankrupt would basically do the same thing but would also leave you as a credit leper for the next 6 years......

tigerfeet2006

Get yourself over to the Debtfree Wanabe board on here and post there, they will help you get rid of the debt. I agree with the others BR is not a good idea in your position.