About to go bankrupt, should I?

TobyD_2

Hi there, I'm 27 in about £9375 in debt, on a monthly income of about £400 (incapacity benefits), I'm hoping to go to college in Sept, however I will need to rent a place as there is no student accomodation. I have stopped paying the two main credit cards that I owe, Halifax and MBNA. This was advised by the CAB, they also said that it seemed the only option I really had to sort my problems was to go bankrupt. My main bank account (with £500 overdraft), LloydsTSB had been making ridiculas charges which made me fall behind with everything. I have opened a new account with Barclays and left LloydsTSB alone, except their charges have made me go over the £500 overdraft. I did start on claiming my charges back but stopped at the point before I was to make the actual claim legally, not the brightest thing to do I know, but the depression overides logic sometimes.
Obviously the phone calls have been coming and unfortunately I've been hiding. I live at home with my mum at the moment but really want to move away to go to college. I am on incapacity benefits due to depression and the whole thing is making my life unbearable. The prospect of bankruptcy seems to have come to a head as I have been to the courts and had a petition appointment booked for Tuesday.
My question is, am I doing the right thing? Or is there a better option? I realise my debt isn't huge compared to a lot of people, but my income is fairly minimal too. Any advice will be much appreciated.

Thanks, Toby

fermi

Hi Toby,

Welcome to the BR board.

You've been advised by CAB, which is good. From what you say about your situation I can see why they may have suggested bankruptcy as an option.

It's likely to be a bit quiet here on a Friday night, but stick with us over the weekend and we will help you go through your situation; see if there are any alternatives; and answer any questions you may have about bankruptcy.

Your debt is small compared to many, but it is the circumstances that count, and quite a few on this board have gone BR for less. To some 9-10K may as well be £1 million.

Hopefully by the end of the weekend we will be able to sort out a clear path for you.

EDIT: Quiet yes, but Richard_S has obviously managed to kick the kids off the PC at last. :rotfl:

Richard_S

TobyD wrote: »

Hi there, I'm 27 in about £9375 in debt, on a monthly income of about £400 (incapacity benefits), I'm hoping to go to college in Sept, however I will need to rent a place as there is no student accomodation. I have stopped paying the two main credit cards that I owe, Halifax and MBNA. This was advised by the CAB, they also said that it seemed the only option I really had to sort my problems was to go bankrupt. My main bank account (with £500 overdraft), LloydsTSB had been making ridiculas charges which made me fall behind with everything. I have opened a new account with Barclays and left LloydsTSB alone, except their charges have made me go over the £500 overdraft. I did start on claiming my charges back but stopped at the point before I was to make the actual claim legally, not the brightest thing to do I know, but the depression overides logic sometimes.
Obviously the phone calls have been coming and unfortunately I've been hiding. I live at home with my mum at the moment but really want to move away to go to college. I am on incapacity benefits due to depression and the whole thing is making my life unbearable. The prospect of bankruptcy seems to have come to a head as I have been to the courts and had a petition appointment booked for Tuesday.
My question is, am I doing the right thing? Or is there a better option? I realise my debt isn't huge compared to a lot of people, but my income is fairly minimal too. Any advice will be much appreciated.

Thanks, Toby

Hi Toby,

As Southerscouser said on the DFW Board you really should consult CCCS or the National Debt Line because it's not really in our place to suggest or recomend bankruptcy; we're just here to help when the professionals have suggested it and you've decided it's your best option.

Both CCCS and NDL are charities so it won't cost you anything, their advisors are professionally trained and will only make suggestions that are in your best interest.

Having said that, bankruptcy is never 100% painless but for somebody on a low income with unsustainable debts and no assets, then it's probably the best way to consign your debts to the "dustbin of past mistakes".

Regards

Richard

Witsend_2

Hi Toby
First of all dont hide away as that is no answer. You have sought advice and stating your situation here tonight, is in it's self is a step forward. Someone I know who is on incapacity benifit had run up debts and last year became bancrupt. The releif they felt was tremendous. I am not saying that this would be right for you. However, what I would advise is to take your time, hold your hands up and not hide away as you will only gain respect for being honest. Have you spoken to your mum about this?

TobyD_2

Thanks folks, seems like a really supportive site, I think that going bankrupt on Tuesday should definately be cancelled for now then. I understand you can't say what to do but as I said all advice is appreciated

missylou_2

I would strongly support getting all the advice you can from all sources available so that you can make an informed decision. Only you will ever know what the right decision for you and your personal circumstances so trust your own judgement.

Only thing I would suggest is making sure that after you make your choice give yourself some time to heal mentally as the stress of studying will not in any way benefit your current mental state.

wherediditallgo

ts_aly2000 wrote: »

If you have been advised to go bankcrupt over £10k then the person you spoke to should be shot. The long term consequences (and there are some) are restrictive. I live with a discharged bankcrupt.

Not necessarily. Firstly, there are people who have gone BR for as 'little' as £5k - when you don't have any income other than benefits, & when your health isn't good anyway & is suffering from the pressure, you struggle to find a way to deal with your debts. When you don't have any commitments in terms of a partner/children or assets, then you're in a better position to go BR than someone who may lose their home, a car, their job etc. You say you live with a discharged BR - if you live as a couple, then you're not comparing like with like, since this person doesn't.

When you're BR you have to accept that you won't have a normal credit card for years to come or an overdraft, because your credit report will be affected for a good 6 years. Your options re getting a mortgage are to pay a higher rate of interest or not get one, & it can make it harder to get rented accommodation. There's no doubt that being BR does restrict you in terms of certain choices you can make, but so does being saddled with a load of debt that you have no way of paying off for several years to come. While you're missing payments, your credit rating could be affected anyway, & when it comes to the point that health is being affected, then it's a no-brainer for me (I have health problems too) - health trumps wealth every time.

Everyone's circumstances are different, & it may well be that the person you live with had far more things to take into consideration before going BR than the OP, so the effect on their life is greater. But I believe that you can either look at the conditions of being BR as restrictions or see them as conditions that allow you to make alternative choices. I'm BR, & the only thing that affects me is not having a cheque book. I don't care that I don't have a credit card or overdraft - I don't need or want credit facilities. Now I can pay my rent & my bills & plan my expenditure properly. I pay my IPA, then I sort out my budget for the month & stick to it. If I want to buy something I pay cash, or I don't get it - simple as that. I've got to save for what I want, because there's no other way of paying for it. I've signed up at loads of freebie sites to get anything I can, & I make a note of any money-saving tips I think will come in useful. I can budget for what I want now, instead of worrying about & then doing my best to avoid the almost daily letters & phonecalls from creditors that used to force me to rob Peter to pay Paul every month. Being BR has forced me to see the difference between 'want' & 'need', & that's not a bad thing at all.

The OP should get more professional advice, but the amount of debt he's got doesn't mean that going BR isn't the right option for him.

JulesJay

I totally agree with all wdiag has said.

I went bankrupt last week for just under 70K due to various factors which included a business failure.

I had no assets to protect which made it easier for me and I took all the advice I could, including talking to the National Debtline, CCCS and the CAB and after 6 months made my decision.

Do not be forced into anything - get as much advice as you can and come on here as often as you need to - we are a very friendly bunch! :j

Take care

Jules x

Broken_hearted

5-10k debt is possible to be paid off on benefits it just takes a while. They don't need to go bankrupt it's just easier.

philnicandamy

Broken_hearted wrote: »

5-10k debt is possible to be paid off on benefits it just takes a while. They don't need to go bankrupt it's just easier.

how is it posible to pay debt off? I ended up on incapacity benefits, my OH paid all rent & utilities & offered all my creditors token payments & even a DMP all of which were declined and I owed £11,500
I'd have loved to have gone down that route instead of bankrupcy, but in the end it was the only route I could take & to be honest healthwise i'm glad I did now...I take offence that you think bankrupcy is still the "easier" option..once you declare yourself bankrupt then come back & discuss

TobyD_2

I have now made my decision, thanks to all of you who have helped me look at the situation from different angles. After looking at the CCCS website they advised a DMP, which will allow me to be debt free in 5 years and 5 months. It is such a relief to know that something has now been done, it feels like I can at last think about something else other than debt. :j