Any advice would be great.. SOA etc

agz123

Hi All,

I have racked up a large amount of unsecured debt mainly with credit cards - approximately £15,000. Also a few payday loans which bring the amount to £17,000. I am strongly considering going bankrupt as of early next week, because i just cannot meet the payments each month.

I can hold my hands up and admit, the debt has been built due to negligence on my end - 75% of debt related to gambling losses. I have been to various gam anonymous clinics and also been to the NHS clinic in London. Slowly but surely, the addiction is filtering away and would like to have a fresh start.

I need some advice, because at the moment I live at home with my mum who is the homeowner. I pay her rent/board at £550 per month and also pay half towards the utility bills. I also have a car which is valued at £1300 which i need for my travel to work as I work shifts and early starts on most occasion. I wanted to ask whether the OR may see my rent/board payment as excessive? My mum does work but does not earn as much and is in receipt of benefits but also has to provide for my younger brother.

Total Income after Tax and NI: 1235
Rent/board: 550
Council Tax (50/50 split): 70
Gas: 50
Electric: 50
Petrol: 90
Car Insurance: 95 (New driver with 0 years NCD)
Food/Housekeeping: 200
Clothing (Smart office clothes required for work): 45
Mobile Phone: 35
Food at work: 30
Hairdressing: 10

The above are somewhat a close assumption of what my outgoings are at the moment. Again the bills are split (50/50) between my mum. Also, my salary is paid directly into her bank account and then distributes the cost accordingly. This was a method we agreed to help my gambling addiction and control of money. Would that seem to be issue with the OR?

Thanks

Hudson1984

can't offer advice but I do feel for you on this. Been there with that level of debt and whilst my gambling addiction was merely fruit machines it was a hard nut to crack even at my little level (for me ever pound coin I got when I went out I saved, put in a jar instead of the fruit machine - seeing the money accumulate ment more to me than the small wins here and there so it replaced the thrill)

you do seem to be paying alot in rent, I don't know where you live and if that's competitive but is there an option for you all to move to a cheaper house? if you're paying half it would seem wise to consider it.

agz123

Hudson1984 wrote: »

can't offer advice but I do feel for you on this. Been there with that level of debt and whilst my gambling addiction was merely fruit machines it was a hard nut to crack even at my little level (for me ever pound coin I got when I went out I saved, put in a jar instead of the fruit machine - seeing the money accumulate ment more to me than the small wins here and there so it replaced the thrill)

you do seem to be paying alot in rent, I don't know where you live and if that's competitive but is there an option for you all to move to a cheaper house? if you're paying half it would seem wise to consider it.

I started at the age of 16 and it started of small, but just over the last two years the stakes increased and increased. A horrible addiction which had me fighting depression only a few months ago. I am now 22 and still find it hard to believe I am on the verge of bankruptcy at such a young age

luvchocolate

I do feel for you, but try to see it as drawing a line on your past and look forward to a better future.
Yes you are young but that will work in your favour you have a long life in front of you and we will all give you help and support.
Take care x

caffsean

I've got to agree with Hudson you do seem to be paying a lot in rent, in the area I live in you can get a 2/3 bed house with garden etc for that price (especially as your mum is the homeowner I'd have thought it would be a bit lower). Are you also really spending £200 per month in gas and electric (as the bills are split 50/50 this would be the combined total), As a family of 5 ours is approx £150.

I also wonder whether you should have to be paying 50/50 as your brother also lives at home, it should really be your mums responsibility to cover the extra portion of the bills that he's used as she is receiving the benefits etc for him (so she should technically be paying 2/3rds of the bills if that makes sense)

It might be worth discussing this with your mum and asking for a review of household expenses and see if any savings could be made that could then go towards paying off your debts, the OR will certainly question everything and ask for proof of all bills. It might be worth ringing stepchange and having a talk through with them too.

agz123

luvchocolate wrote: »

I do feel for you, but try to see it as drawing a line on your past and look forward to a better future.
Yes you are young but that will work in your favour you have a long life in front of you and we will all give you help and support.
Take care x

Thank you very much. I have been reading this forum for months now and its amazing how much advice and support is available.

In regards to looking to move out, it's not that simple. My parents went through a divorce 4 years ago, which was funded by legal aid on behalf of my Mum. The court settlement meant my mum was given our current house which has a pretty large mortgage repayment. Also, if she decide to sell then there would be not much equity available to her - as legal aid have decided to offset the cost against any available proceeds if the house was to be sold. At the same time, my mums income fluctuates due the nature of her work and is not in the best of health at the moment.

battyboimatt

Total Income after Tax and NI: 1235
Rent/board: 550 (Too high as your living at home)
Council Tax (50/50 split): 70
Gas: 50 (Semms High if this is half for the bill, are your bills really over £300 each every quatter)
Electric: 50
Petrol: 90
Car Insurance: 95 (New driver with 0 years NCD)
Food/Housekeeping: 200
Clothing (Smart office clothes required for work): 45
Mobile Phone: 35
Food at work: 30 (Don't think this would be allowed, this would need to come ouf of your food budget that you say is 200)
Hairdressing: 10

2kadmin

Hi,

I thought I would offer some thoughts and advice, particularly the rent question.

After the bankruptcy I was told my rent was too high £800 for a two bed flat. I responded with great where do you suggest I move too? I don't have any money to rent anywhere else deposits, fees, etc. I doubt that a new landlord will accept me given my bankruptcy status on a credit file. I duly registered on the council housing list but as I was in a home and I could technically afford the rent, surprise surprise I didn't even get on the list.

Reading your budget, I would think you have lumped together a few bills, if you change it slightly it starts to look a lot better.

Income 1235

Rent 500
Council Tax contribution 70
Gas: 35
Electric: 35
Petrol: 90
Home insurance contribution: 25 ?
Provision for car MOT/Maintenance: 15 ?
Car Insurance: 95 (Post-BR you might not be able to pay this monthly)
Food: 230
Clothing (Smart office clothes required for work): 45
Mobile Phone: 35
Provision for Birthday and Christmas gifts for immediate family £10 ?
Hairdressing: 10 ?
Provision for Dentist: 5 ?

Mobile phone – Is this a contract and in your name? If it is then it will get cancelled, Pay as you go phones generally are more expensive to run, also you might need to provision to replace your phone if you cannot expect to get a new phone on renewal. (Assuming you NEED it?)

Hope this helps.

2k

agz123

2kadmin wrote: »

Hi,

I thought I would offer some thoughts and advice, particularly the rent question.

After the bankruptcy I was told my rent was too high £800 for a two bed flat. I responded with great where do you suggest I move too? I don't have any money to rent anywhere else deposits, fees, etc. I doubt that a new landlord will accept me given my bankruptcy status on a credit file. I duly registered on the council housing list but as I was in a home and I could technically afford the rent, surprise surprise I didn't even get on the list.

Reading your budget, I would think you have lumped together a few bills, if you change it slightly it starts to look a lot better.

Income 1235

Rent 500
Council Tax contribution 70
Gas: 35
Electric: 35
Petrol: 90
Home insurance contribution: 25 ?
Provision for car MOT/Maintenance: 15 ?
Car Insurance: 95 (Post-BR you might not be able to pay this monthly)
Food: 230
Clothing (Smart office clothes required for work): 45
Mobile Phone: 35
Provision for Birthday and Christmas gifts for immediate family £10 ?
Hairdressing: 10 ?
Provision for Dentist: 5 ?

Mobile phone – Is this a contract and in your name? If it is then it will get cancelled, Pay as you go phones generally are more expensive to run, also you might need to provision to replace your phone if you cannot expect to get a new phone on renewal. (Assuming you NEED it?)

Hope this helps.

2k

Thank you 2k and all.

I agree with the renting elsewhere as i have no spare income/savings to fund a deposit. Also i forgot to add I am currently paying for a Sofa purchased from DFS on their interest free plan for 4 years. I was led to believe this was classed as 'hire purchase' however when i had a conversation with stepchange the other day they explained it was a loan of some sort? Could someone clarify the situation with that? Also, as my salary is paid into my mothers account I'm assuming the OR will want access to that and in regards to car insurance the monthly direct debits can be released from her account but technically I am still funding it.

I don't want to completely run away from my troubles and not pay a penny back, I am due a pay rise which I believe will increase my Salary to £1315 after tax. I believe I could pay anything up to £100 in an IPA, and still have enough to meet the 'reasonable needs'.

Finally, the last two months I have been doing a fair abit of overtime at work? Surely the OR cannot take this into consideration?

Thanks all again.

2kadmin

The loan on the sofa will be written off as part of the BR, DFS simply arrange a loan for you and it’s not secured on the goods.

Whilst I am thinking about it be careful to ensure all relevant Direct Debits are cancelled, so anything that solely in your name that forms part of your bankruptcy, is not coming out of your mums bank account any more.

The OR will most likely want Bank statements for the last few months. So this might prove tricky but a letter from your GP or someone else who is involved with the recovery from your gambling issues might well go a long way there. Plus your mum might need to hand over bank statements and highlight the transactions that relate to you.

I don't see Bankruptcy as running away, it is acknowledgement that you have faced up to the problem and it is simply insurmountable.

You really need to do a proper budget though, sit down and think about all the things you actually spend money that are not luxuries. Do you contribute towards home phone line? Broadband? Water bills? TV license? You'll possibly need your mums help but it is worth doing, you'll then have a good idea where exactly you stand, in terms of reasonable needs and if an IPA is affordable, pay rise or not.

As for paying the OR you almost certainly will get a NT tax code, this will mean you'll pay the tax you would have otherwise paid PAYE to the OR. I seem to remember that they take an average over three months of take home pay, so be careful if the overtime is likely to suddenly stop. You may need a letter from your employer to confirm this.