General advice/experiences help saught :)

PixiePie

Hello everyone - sorry if this isn't the done thing, but I'm brand new here (having initially found the site in general through a totally unrelated matter). I was wondering if I can pick people's brains? I understand the best thing is to talk to the national debt line people etc, but it's scarier saying things out loud and I just end up in floods of tears, so first step (before I freak out the phone line people again) is to ask here. Sorry in advance as this is a bit long

OK - I have to go BR - I'm about 50K in debt with no chance of ever getting out of it, so it's my only option, and I want to sleep at night again. My situation basically is that about 18 months ago I emigrated, then swiftly returned due to family health matter and found myself homeless and unemployed. I couldn't get a 'proper' job due to being homeless, couldn't afford a home due to not having a job. I mainly lived with my partner in his Business Premises (a rented business unit - we weren't meant to be living there obviously, but had a sink so we could wash in a baby bath and cook with a microwave) and worked with him to bring cash in to eat/pay rent. The nature of our work is freelance, and we had secured a commission for a BIG job that would allow us to move into a proper house, so all was well and I took out a personal loan to help with living costs (ie eating mainly) whilst the job was ongoing (we don't get paid *anything* until well after the job is done, that's the nature of the business). To cut an already long story shorter, the job fell through and we didn't get the money. However, with both of us working on the business and me helping the business side of things turnover increased by 180% and we were making enough to move into a live work unit (yeah! we got a deposit and first months rent together ).

However, things are going a little sticky again due to clients going BR and therefore us not getting our money/jobs not happening fully and the bank pulling in our overdraft meaning some cash flow problems. This is a seperate situation from my personal BR obviously, but has implications on what might happen with me.

My overall question is how much of my income will the OR take to pay back my BR basically? I have now managed to get a full time job as a teacher again now I have an address and my contract starts in Sept, so obviously no money coming in until then. Unfortunately we don't have enough money at the moment what with our cash flow problems for me to go BR now (the irony of 'I have no money, but you want me to pay to say I have no money!), but as soon as this is found (we are currently living on one meal a day due to lack of funds) I will get/fill in/send off the forms and start it all.

Once my contract starts I will be getting roughly 1.4K a month, but our rent is 1.4 K a month, and therefore this money is needed for that - we can't move as a) we don't have the deposit to and b) we need the place we have as live/work units are quite rare (and usually a lot more than this one costs) and need to be living near where my new job is so I can get there. There are long boring reasons why we need to live in the kind of property we do as well, but I think I've waffled enough now.

So, am I dreaming to think BR is actually going to change my situation, or am I going to be homeless again? Really at the end of my tether (yes I know it's all my own fault and I have *so* changed due to this), and know I have to face up to things, but one of the scariest things is not knowing what to expect with the OR.

Many thanks in advance
PP

PixiePie

Many thanks for that - I'm just a bit worried the OR will say I have to move into another place as technically I could rent a property for about £900 a month and still be near work (but I guess then I would have to pay out a couple of hundred or so on bills and pay for my own food as well, which OH currently does, but he has to have access to a large room for his work, which the £900 place wouldn't have).

Another quickie shoved in - do my outgoings have to be *vital* - ie payments into a pension - I'm under 30 so it's not *vital* I pay into this at the moment I suppose, so will I have to not pay into it (will have to tell employers soonish if I want to opt out that's all).

Many thanks again

PixiePie

Cheers for that addo - v helpful See my rent is stupid, but I don't have any other outgoings apart from teaching related costs (ie union membership). I have enough clothes to last me another 5 years (my buying things attitude has totally changed), my food/bills/petrol/car tax/insurance/upkeep on car is paid for by OH, I don't own a mobile anymore and the home phone is the work phone, so paid for by the business, I haven't been to the hairdresser in about 3 years and if I do my Mother pays ( I go to her hairdresser if I visit them), holidays are flights only which OH pays for (family live abroad so we go visit them), or we just don't have them (OH hadn't had a holiday for about 20 yrs when we met), no pets, OH pays for my eyes - basically, OH pays for *everything* other than rent (or will come Sept, when I start getting paid, as I don't have any money at the moment so can't).

Unfortunately no, it's not a castle at all (I wish lol). It's an old Victorian factory that has been converted into separate units, some just business some work/live. We practically need the work/live as we work about 18 hours a day 7 days a week (we work in a creative industry where pay is pants, but labour intensive so need to put the hours in and trying to get a fledgling business to world domination (ok not quite, but to a point where we can afford to get married and have kids)), so travel times/costs would be an issue if we lived away from a big enough unit to make our product (and we need *big* ceilings and space - we make stilt walkers costumes, BIG mascot type outfits and HUGE inflatable outfits) as well as the double rent etc etc. We need to be in London or have business premises in London due to our client base, so the rents there are silly hence double costs being ott and my new job is also in London, hence rent being stupid (and whilst I want to get out of debt etc etc (there are a few other reasons for me being in debt btw that I didn't put down, like my own health) I really don't want to live in a rat infested studio apartment (I know I shouldn't be choosy, but if you know accommodation in London,it can get pretty grim), which is the only thing that will bring my rent/travel costs down to less than about £800 minimum a month. This place seriously is not luxurious - we have gaffer tape around all of our windows and broken window panes, damp in the bedroom, we had to put down our own flooring to make our bedroom/sitting room habitable and the entire room list is - 1 small bathroom, 1 small kitchen, 1 bedroom/living room, 1 workshop, 1 storage room and 1 office room. But as I said in earlier post - finding live/work units (and not those that the work area is a desk under the stairs) is pretty hard still.

The thought they won't make me move/homeless makes it *so* much easier to contact Debtline and get the next step sorted. Just need to find the stupid fee now. Argh.

NekoZombie

Hi, welcome to the board!

No-one has mentioned this, but the loan you took out while you were homeless and jobless - was this for a lot of money? The OR will definitely be interested in that as at first glance it looks like you were taking credit when you had no hope of paying it back. I'm sure this wasn't the case, but you need to make sure you make that clear.

PixiePie

Hi and thanks Neko - it's something I thought about at first when looking into BR as my main sickening thought was 'I'm going to jail' - whether or not I had done anything illegal as such, was just paranoid that BR's might go to jail to teach them a lesson for being pants with money.

Whilst I was physically homeless and living in the unit, I was still registered at the address I lived in before, where some friends still live and they hadn't taken me off the electoral role, so that's how I was able to get it, and really thought that I would easily be able to pay it back due to the job we were working on paying out more than enough to cover the loan (loan was 9K, job was worth about 45K). I explained to the loan people this, but not the fact that I wasn't actually living at my registered address anymore (I was desperate as needed to cover the other debts I had already (stupid person that I am) and didn't have a large enough income coming in to cover them (see below), and thought it would all be sorted out in a couple of months when the job was done).

When I say I didn't have a job, I mean what I would term a 'proper' job with my pay going straight into a bank account every month - I was working for OH's business, which became 'our' business to us if not in fact, and he paid me about £400 a month, although not into my bank account and not in one go but then strictly speaking I used this money for work related things (as I've said before, we work stupid hours 7 days a week and don't do anything outside of work, so there's not much else to spend the money on) and to help keep up my other debt repayments (as the loan was to pay these debts whilst I didn't have a large enough income to cover them every month).

What's a lot of money to the OR? :S

NekoZombie

I guess it depends on the OR. I'd be careful with the above story as it definitely sounds like you did some misleading in order to get the loan, although realistically if you do get a BRO it shouldn't have too much of an impact. Try to avoid a BRU by offering full co-operation to the OR if they do have any issues, as I think a BRU has heavier consequences.

PixiePie

Thanks again Neko for the advice

What's a BRO/BRU - I know what it stands for, but what does this actually mean? I've resigned myself to the fact I will never be able to get a loan/credit card/mortgage etc again in my life (not that I would ever want anything other than a mortgage, but what with house prices as they are I don't see that ever happening anyway), so the only thing I can think of left is they take my earnings for the rest of my life (which sort of makes it useless me going back to a job I thoroughly hate) or send me to prison. Which scares me rigid, as I'm sure I would be beaten up/raped/murdered (I'm a pathetic type, typical middle class background that I have in my minds eye as the sort that are not loved in prision). Plus if I go to prison I can never work again as a teacher so that sort of hits them in a no win situation as I can't work to pay any of the money back on a IPA then (Apart from the peanuts I would get in our business job). To be honest, I really am resigned to living with this for the rest of my life, discharged or not, I just really really really can't bear the thought of going to prison.

Is co-operating just being available whenever they say jump, and answering all questions as fully and honestly as possible? Or more? I wouldn't be able to take time off work to attend meetings/take phone calls after Sept as teachers aren't allowed days off, but obviously willing and want to do everything else in my power as above.

fermi

Hi PixiePie,

The Official Receiver may consider the way you took the loan out to be foolish, and even not entirely honest, but they see people do lots of similar things when they are in a desperate situation. They are very good at separating cases such as this from the ones where people deliberately set out to defraud or not pay back a creditor.

So don't worry, there is not a chance on earth of you going to prison.

There is a small possibility that as Neko says you may be subject to a BRU.

See: http://www.insolvency.gov.uk/guidanceleaflets/bro/bro.htm but ignore the bits about court as they only apply to a BRO.

Even then a BRU is likely to be for a very short period. I personally suspect you would not get one, and that you would just be on the end of a few stern words from the OR.

For an Income Payments Agreement, the OR would only take 50-70% of your spare income after fair living costs have been deducted, and only if the surplus is greater than £100 per month. The IPA can only continue for 3 years, and can be reduced or even suspended if your income drops.
Getting an IPA is a bit of a pain, but nothing more.

The most essential thing is to be honest with the OR, and they will treat you fairly and with kindness.

NekoZombie

Yep, I agree with Fermi on that one.

PixiePie

Can I just say a huge thank you to all who posted - all your advice is wonderfully helpful in making me understand what happens once I've actually filed th BR, which makes everything a lot less scary. Was even brave enough to call the National Debt Helpline who were so so helpful and not at all judgemental, even when I fully admitted the extent of my idiocy (to both them and myself really) over the past 10 years. One of the best things they told me was not to contact my creditors again as they will only hassle me, and as I have no assets there is nothing they will gain from it, just stress me out more before I am able to file BR. Very reassuring to know the correct things to do

I now have a plan of action and am positive I will perhaps even be able to find the money to go down to the court (I'm in London, so a scary visit to The Strand argh) asap, when I will finally be able after a year of not being able to sleep due to it get a good nights sleep.

If we can ever afford to have children the only thing I will ever want for them is to never be in debt, as I strongly believe without debt, you can do anything, with it, you can't do a thing.

Thank you once again, and shall update you when the relief-ful moment comes (by the way, yes I feel huge regret for my actions and am not pleased that I am having to do this, just relieved that I am making positive steps to resolve it).

NekoZombie

Well, I have some good news anyway. I too went bankrupt at the Strand - they don't charge the court fee for personal bankruptcies, so that'll save you a bit of cash for post bankruptcy celebrations. Or food.

:beer: