Facing Bankruptcy

failingfast

Hi, I hope someone can help!

I've had debt problems for a couple of years, which I had been managing via a DMP, and have just been advised by a debt charity that bankruptcy would be the most suitable option for me.

My debts amount to just over £9k (all unsecured), which may not seem a huge amount to some, but as a single parent working part-time I find it overwhelming! I used to work full time but changed to part-time due to the kids suffering with my unsociable hours (always being at the childminder). I don't have the option of working full-time again as I've just been told that my tax credits will stop due to an alleged over-payment, which I am appealing against. If I lose I won't be able to afford the childminder again.

I'm really worried that if I go bankrupt (if I can find the money for the fee) that I will lose our home (private rent) and possibly have to send the kids to live with their dad as I don't want them to be in a BnB or wherever.

Can anyone offer some advice please? My heads spinning!

Thanks.

Ox1987

I sympathise, I am in a similar situation as I have 3 kids and am just about to start a DMP which may or may not work. My main worry is if if fails and I have to declare BR then will my kids be ok and where will they live. You need to check with your LL over BR. How old are you kids, how are they coping. I believe depending on how old they are your council may put you in temp accomodation until they found you something more permanent if available.

failingfast

Hi and thanks for replying!

My kids are 11 and 6 and they know nothing about the financial situation. My main worry with losing the home is that the council could well turn round and say they wont rehouse us as the bankruptcy is my own fault, therefore I have made myself homeless.

Im speaking with council and CAB this week about all of this so fingers crossed. Good luck with your dmp.

Ox1987

Thats good im concerned about the impact of DMP and/or BR on my kids. I am sure that they will see you as priority and also is it not that you have wilfully not paid just cant pay and/or private LL has kicked you out. Let me know how you get on with the council

failingfast

Also does anyone know if its a good idea to contact my creditors to tell them Im considering applying for bankruptcy or would this agitate the situation in the meantime?

tigerfeet2006

Hi and welcome to the board.

Who said BR would be the best option and was a DRO mentioned?

tigerfeet2006

If you are up to date with your rent and can continue paying it then there is no reason for your LL to want you out as it would cost them a lot of money to find a new tenant so it would be easier to let things continue as they are.

failingfast

Hi again

It was SC that suggested BR as the most suitable option, then a temporary repayment plan as a 'stop-gap'. My tenancy agreement DOES have a BR clause in it and I have arrears of around £300 but have agreed a repayment schedule with him and am sticking to it.

tigerfeet2006

Hmm! OK, they are privy to your circumstances so I am assuming there is a reason a DRO was not recommended.

How long will it take you to pay off the arrears.

failingfast

Im repaying at a minimum of £50 per month, a little more if I find I can afford it. I'm fortunate that I have a tolerant landlord! It's the BR clause in my tenancy agreement that is worrying me most. The fact that I have made, and kept to, a repayment agreement may become irrelevant if I do decide to go BR. Also my parents are my guarantors so, as I understand, they would become liable for the arrears and any monthly rent due if I cant pay/go BR. They were working full time when I took on the tenancy and have now both retired so can ill afford to pay.

tigerfeet2006

So around six months? Can you afford to wait until the arrears are paid off?

Sorry to bang on about this but what were the reasons SC gave for recommending BR over a DRO? Just trying to get it straight in my head.