Bankruptcy advice for Student-to-be

Skinto123

Hi there. I do hope someone can help me. I am a 27 year old office assistant, and have (somehow!) managed to run up debts of nearly £20,000. This has been ongoing for a lot of years now and, as I'm sure most people will understand, I've been burying my head in the sand for so long now. I earn £900 per month, and long ago have defaulted on the payments for all my debts, and am currently paying off token payments of between £5 and £25 - depending on how understanding the company is. However, I know this can't go on forever and constantly avoiding the phone calls is really getting to me. I know I feel a sense of relief already that I have taken the first step by asking for advice.

My situation is - I live at home with my parents still, and I have a car, but no other assets. In September, I am going back to University full-time, which is really worrying coz, although I am following my dream, I still have debts on my back. The question is - would it be worthwhile for me to declare myself bankrupt?? I am going to be living at home for the next 3 years at least, therefore I am not caring as to whether I will be able to obtain a mortgage or any other credit. I just want to be debt free. What would be the main implications of bankruptcy for me? I live in Northern Ireland, so am not sure if the law is different over here. I do apologise if my question has been asked elsewhere in this forum, but had thought that as every situation is different, I should post my own thread.

Thanks very much,

Julie.

fermi

There is additional info on the OP's DFW thread that has not been posted here:

I am planning on studying nursing in September - which is a 3 year full time couse. Of couse I will get a bursary of a measily £500 per month, which would probs just about cover my debts as well as what I pay to my mum per month. I will make a list of all my outgoings and post it to see if you can help me further. Thanks again to all for replying, I'll post it shortly.

Mint Visa - £30
Halifax overdraft - £5
Egg Visa - £5
Yorkshire Bank - £20
Alliance and Leister - £15
Halifax visa - £10
Preference Account - £10
Capital one loan - £20
Halifax loan - £7
Freemans - £35
Car Insurance - £20
Gym membership - £36
NTL - £13
Petrol - £90
Loan to mum - £108
Keep to mum - £200
Hair - £55 every other month

These are the main outgoings I can think of. My current wage is £900 per month, but of course this is only going to be for another couple of months as I will be starting uni. My parents are very helpful, but theres only so much they can do as we aren't exactly a rich family. I'm in despair looking at all this.

fermi

Hi Julie,

Bankruptcy does seem a viable option in your case, but the first step is to seek professional advice from one of the free charitable services. A judge requires that you have done this before they will grant a bankruptcy, so it's best to get this advice straight away.

You should either:

• Get an appointment to see a 'money advisor' at your local 'Citizens Advice' office.
• Call the Consumer Credit Counselling Service. Tel: 0800 138 1111 http://www.cccs.co.uk/
• National Debtline. Tel: 0808 808 4000 http://www.nationaldebtline.co.uk/
• Payplan.Tel: 0800 917 7823 http://www.payplan.com/

Should you be advised that bankruptcy is suitable for you, then as a student nurse on a very low income it is highly unlikely that you would be required to contribute towards the debts in the form of an Income Payment Agreement.

The law on bankruptcy is designed to release people from overwhelming debt, but not punish them unduly for this. This means that you should not have to give up the sort of aspirations for the future that you have.

If you are studying and consequently have an income that is low enough that you are not expected to pay anything towards your creditors, then the 'Official Receivers' or others in authority have no right to prevent you doing this, and will not do so.

Stick with what you really want to do, and a solution (bankruptcy or otherwise) really can be found to let you achieve it.

Let us know how you get on, and keeping asking questions if you need to.:)

Oldernotwiser

savagevixen wrote: »

Bankruptcy sounds like it may be suitable, have you contacted any of the debt help charities/companies, like CCCS etc?
I have to say though, I would certainly not contemplate going bankrupt and THEN going to university. What will you live off?
And really if you go bankrupt/ or in your current financial situation can you really afford to go to uni?
I am not discouraging learning, but it sounds like the Open University and a job would be better.
I am 31 and Bankrupt and I study with the OU. I could not possibly afford 3 years at Uni!! Although I have kids. My husband did his degree aged 24-27 and that is where our debts came from!
If I were your parents, I would be really worried. Really really worried.

I have to disagree; unfortunately you can't study to be a nurse with the OU. If you go bankrupt before going to university you should be able to live comfortably on your nursing bursary and have 3 years before you need to worry about renting or buying accommodation, by which time you'll have been discharged.

Trying to pay off your debts whilst studying seems to me to be a recipe for disaster and at the age of 27, I wouldn't worry about what your parents think.

Remmer

This is a sign of the times. Someone considering BR at 27 makes me so sad and angry at the banks. Sweet I hope you can find an alternative, if not, then you'll find loads of support here

savagevixen

Oldernotwiser wrote: »

I have to disagree; unfortunately you can't study to be a nurse with the OU. If you go bankrupt before going to university you should be able to live comfortably on your nursing bursary and have 3 years before you need to worry about renting or buying accommodation, by which time you'll have been discharged.

Trying to pay off your debts whilst studying seems to me to be a recipe for disaster and at the age of 27, I wouldn't worry about what your parents think.

To be fair, I had no idea she was studying to be a nurse!!!!! She did not say that and I certainly did not go looking on other boards!!!! I read the post above and it sounded really irresponsible!!!!
Sorry
Good Luck!

Oldernotwiser

I read this post originally on DFW where there's more information; I haven't been following her round the boards!
On the other hand, I've read of quite a number of people who go to university after going bankrupt; it's probably part of the "new start" syndrome and not a bad idea for someone with no responsibilities.

savagevixen

Oldernotwiser wrote: »

I read this post originally on DFW where there's more information; I haven't been following her round the boards!
On the other hand, I've read of quite a number of people who go to university after going bankrupt; it's probably part of the "new start" syndrome and not a bad idea for someone with no responsibilities.

I agree!:rotfl:

Skinto123

To all of you for responding. Yes, Citizens Advice is my next step - I am going to arrange to go and see someone. A new start is definitely what I anticipate - with a bursary of £500 per month there is no way I could carry on with these debts. To be honest - these debts are part mine and part a family member - who died a few years ago. He was unable to obtain credit and being very naive about borrowing etc. I said I would obtain credit for him. But I am not going to blame anyone else - it is all my own fault and a stupit mistake. Each time I go shopping I am approached by stalkers who work for different credit card companies and have the unfortunate job of standing trying to get 'suckers' to get a credit card. It makes me MAD - if it weren't for people like this, I wouldn't be in the situation I am in. I simply tell them I am blacklisted haha. Sometimes this doesn't even work - they still continue. Grr.
If I do go bankrupt, a decision which I am not taking lightly, I will NEVER EVER wish to obtain credit again.
If I do - does this mean my name will be put in the local paper?? What else are the main implications?? I know the basics - no bank account, no credit - but I can handle this. AND I will be living at home for the next 3 years. But will this impair my chances of ever obtaining a mortgage?

Thanks again!!

Julie

fermi

The main implications for you will probably be:

That you will only be able to get a basic bank account: See http://forums.moneysavingexpert.com/showthread.html?t=474254

The bankruptcy will remain on your credit files for 6 years, but you have indicated that this does not concern you too much. During that time obtaining credit will be very difficult, but I suspect that like most of us that could be a blessing in some ways.

You may well be able to obtain a mortgage after your course ends, but possibly not at the best rate or smallest deposit. Bankruptcy does not bar you from obtaining a mortgage for ever.

Considering the path that you wish to take, I cannot see any of the other short term restrictions that bankruptcy imposes being much of a problem.

I'm sure others will be able to think of a few points, but hopefully nothing of real concern to you.

Skinto123

That is very helpful fermi, thanks very much. I will add that link to my favourites. Another question I have thought of (I know I will find out more from CAB but just out of interest) - does anyone know if they will take my car? It is worth about £2000.