Is bankruptcy a fresh start?

Drum_Master

I have been looking at many options to help me settle my debts. I currently have 30k debt and about £300 of excess income a month.
I ow 7 creditors and half of the debt is to a loan that is £300 a month which makes working out how to proceed difficult in regards to settling all debts. I have looked at snowballing method but where do I begin considering I cannot cover all the minimum payments as the loan requires so much.

I have also now been made aware of bankruptcy being an option. I have no secured assets and a £500 car that I need for work. What is putting me off is that within the next 3-5 years I am beginning to work my way up the pay scale but this is not guaranteed. I currently earn 18k but expect myself to be earning 22-25 within the next few years. This being said if I choose 'A fresh start' (Bankruptcy)which is possible, I would be required to pay my entire excess for the next 3 years in an IPA. I do not understand how this is a fresh start?

Does anybody have any advice of how I should proceed? I am unsure what to do and have read many options and spoken to many companies but its the next 3-4 years that I am working towards. Do I pay all I can now and as I earn more will loosen money up for my personal gain (relationship, sport, socializing) while slowly working the debt away or do I go without for the foreseeable future (bankrupt) and fall into a slump of potential depression with nothing to look forward too (even socializing costs money with travel) while paying everything possible into an IPA? or do I go another route? IVA is just as bad for 5 years or DMP for 10-15 years! I am stuck and a little lost....please help

Can I offer settlement to companies and pay over a long period at a reduced overall cost? Do I not pay and force companies hand? (even though I could not offer lump settlement to all debtors at the same time).

As said......... any advice....any..... would be gravelly appreciated

Thank you

antonia86

Hi azulay111. I would suggest you do a SOA (Statement of Affairs) http://www.stoozing.com/calculator/soa.php and see where you can cut back - if you like post it on here as the board members are great at suggesting areas you can cut back on your expenditure.

Once you have a robust SOA you can see what you options are.

Drum_Master

Thank you Antonia86,

I have done this quickly and am not sure of the exact interest % but this is roughly right. Please all your Help would be highly appreciated.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1250

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 56
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 12.5
Telephone (land line)................... 0
Mobile phone............................ 26
TV Licence.............................. 6
Satellite/Cable TV...................... 0
Internet Services....................... 5
Groceries etc. ......................... 125
Clothing................................ 25
Petrol/diesel........................... 200
Road tax................................ 12
Car Insurance........................... 30
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 932.5


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax crecit ard.............2500......75........0
lloyds overdraft...............2500......40........20
santander overdraft............2500......20........20
Tesco Loan.....................15500.....296.......7
M and S Credit card............700.......25........17
Virgin Credit card.............2000......57........0
natwest overdraft..............2000......40........20
natwest overdraft..............3000......40........20
Total unsecured debts..........30700.....593.......-


Monthly Budget Summary
Total monthly income.................... 1,250
Expenses (including HP & secured debts). 932.5
Available for debt repayments........... 317.5
Monthly UNsecured debt repayments....... 593
Amount short for making debt repayments. -275.5

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -30,700
Net Assets.............................. -30,200

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

fatbelly

Hi azulay

I think you've analysed your situation very well in your 1st post and your soa is one of the better ones I've seen in that everything seems to be listed and your spending seems under control.

I've also dipped into some of your earlier posts to see how you got to where you are now. I'm tending towards bankruptcy as the preferred option as it is the shortest timescale.

Can I just clarify the big Tesco loan. Is £15500 the current balance figure? When is it due to complete?

Drum_Master

Dear FatBelly,

Thank you for your reply,

Fortunately I am naturally a problem so I will analyze every angle to work out the best solution. My proffered notion as you may have seen would have been settlement but unfortunately this has now not been made possible. I am currently looking for a new job that may could come with a slight increase in pay along with a downsize in petrol output. lets say up for 20k and 100 a month petrol. so I would have 200 more excess a month but this cannot be guaranteed.

What would be the best way to go about this now? Even if I did not pay debts and offered settlement as I saved the money back but I couldn't delay all companies like this. If only I could do something about the loan........The loan has about 4 years left to complete.

As most people in my situation, in hindsight I do not know how I let this get so bad but I want to earn myself that fresh start and although bankruptcy kind of allows that, I feel as though it is a way of escaping the problem but leaving yourself in a position where I would fall into a pit with nothing to look forward to for 3 years while I pay back an IPA however much I earn and progress during this period.

I would not be able to attend Family, friend commitments and even the occasional hobby for fitness, I would not have the money to participant (even socialize due to petrol costs) and personally do not feel that this is a positive way to dealing with the problem. Yes I would be debt free but could I relapse and make things worse if my situation became dire and depression set in? Surely there has to be some leighway? how can you survive with nothing? Additionally everybody would become aware of my situate which I would rather not be known.

Thank you for your advice and any further from anybody would be cherished! I have realized Ive rambled a bit but any clarification need , just ask.

Thank you

dancingfairy

You seem to have a rather warped view of bankruptcy. You will not be left with nothing. It will not be widely publicised. Yes it will go on a register somewhere (London Gazette) but unless someone is searching for you online to see whether you are bankrupt then it shouldn't be widely known.
You are allowed a social life in bankruptcy. Clearly you have a moral and legal obligation to pay into your bankruptcy but you are allowed a reasonable budget. I believe you are even allowed a small budget for holidays in the uk and for things like presents. You also have control over your budget, for example if you allow yourself 200 a month for groceries but in 1 month you only spend say 150 then you have 50 'spare' to spend on something else or save for an emergency fund.
Obviously no one is going to say you HAVE to go bankrupt. If you prefer to do a dmp and /or make settlement offers then that is entirely up to you.
df

dancingfairy

You can start a dmp with 300 a month. Obviously if your wages improve dramatically then you can offer more into the dmp or save up for full and final settlements. On 300 a month you are looking at a rather long dmp of over 8 years (unless you get a payrise or can get full and final settlements) but it is still doable.
Best of Luck whatever you decide.
df

Drum_Master

Hi Fairy,

Thank you for your advice.

Maybe I do have a slightly warped view of bankruptcy but its due to the research I have made.

I undertsnad that all important aspects such as bill rent etc is accounted for but nothing extra. Ok I can go without food for a month and have abit extra but thats not really right, that is playing the system. I understand that preiously you took 50% of yruo extra but the rules have been changed. That surely is a fresh start while also maintaining some of your commitment. I just feel that it is a situation that will last 3 years and affect others around you as I would become a bit of a burden.

Any more insight you can give would as alwats be appreciated. How does the IPA fully work? I understand that it is personal to each controller but how generous are they usually? do they understand some of your needs?

Tixy

As df says. they will allow you a budget for things like presents, haircuts etc.

Maybe post on the bankruptcy board of the forum, or have a look on there at some other SoAs posted on that section and the replies they received from the regulars on there.

Posters like debtdoctor and others are good at advising on what you would likely be allowed by the OR and even what costs you can increase.
Unfortunately most people do have to play the system slightly when producing their SoA as everyone's situation is different.

Drum_Master

Thank you for everybodies advice. I am so gratful that people out there only want to help.

I will continue my hunt for a fresh start and approach the forum's about SOA's