hello. help and advice needed.

randomrules

Hello everyone,

I realise that no one will be able to give me all the answers I need in one post, and that I will be unable to explain or give enough detail in this initial post to enable people to give help, but I thought it important to at least get started.

I am currently 30k+ of unsecured debt (credit cards, loan, overdraft). I have suffered from depression in the past and I am currently in the depths of it again. I am also a compulsive gambler.

I have visited my GP and I have been signed off work on SSP for the past 6 weeks and I am on anti-depressants. I have been going to see a therapist for the last year and I am currently waiting to for appointments to see an NHS therapist. I have also begun to attend GA meetings and am looking to get referred to National Problem Gambling Clinic. I have closed my gambling account and do not intend to gamble again.

However, due to my income being reduced and a stupid gambling binge I have reached a point where next month I will be unable to make min payments on my debts.

I am ringing Payplan Tuesday morning to have a chat with them and to see about arranging a DMP in the short term, until I know what the situation is regarding my health and my return to work. It is possible that I will be unable to make a full return to work and may have to work part time if my condition does not improve.

I am not keen and spending 10/15 years to clear debts using just a DMP, but I do not believe I will have enough desposable income to make an IVA viable, I have no assets so I think long term Bankruptcy is perhaps my best option in order to have a clean slate and a 2nd chance to rebuild my life and health.

My main concern is that I wish to move out of my parents house at some point in the next year or so. I am wondering if it would be possible to squirrel money away by being frugal while living within my DMP budget and then use this to find a private landlord who would rent to me - and then commence bankruptcy proceedings?

I am not attempting to pull a fast one - but my main concern is that if I proceed with BR while still living at home with parents - and I am subject to a BR payment order - that the OR will be unhappy if my cost of living changes because I move out and I am no longer able to meet the cost of the payment order.

I realise this is a long post and that I will probably have a much better idea once I have spoken to Payplan on Tuesday, but I just wanted to get this up here to start the conversation about what I might do next.

Best of best,

RR

alastairq

but my main concern is that if I proceed with BR while still living at home with parents - and I am subject to a BR payment order - that the OR will be unhappy if my cost of living changes because I move out and I am no longer able to meet the cost of the payment order.

In Bankruptcy, an IPA/IPO is a payment into the bankruptcy estate, of any surplus income identified from the SOA.

This Payment can be varied up, down or zeroed altogether if the BR's circumstances change at all during the 3 year period an IPA/IPO runs.

If no surplus income is identified whilst an Undischarged BAnkrupt..then no IPA will be sought.

[An IPA is an agreement...so the BR will be able to argue their corner]

The OR does not judge....and does not impose....therefore, should the BR's circumstances change during the period concerned, what will happen is an adjusted Statement of Affairs is generated, to allow for that change of circumstances.

Be aware that, if the OR identifies that debts have accrued due to gambling, then they may seek a BRO/BRU....which, effectively, extends the length of time any restrictions under bankruptcy are kept in place.

Unless one plans to become Prime minister, or a director, then these restrictions should have little or no impact on the Bankrupt.

tigerfeet2006

You may find Amiga's diary helpful to read.

https://forums.moneysavingexpert.com/discussion/1802595

randomrules

Thank you both for your swift replies.

alastairq wrote: »

If no surplus income is identified whilst an Undischarged BAnkrupt..then no IPA will be sought.

[An IPA is an agreement...so the BR will be able to argue their corner]

The OR does not judge....and does not impose....therefore, should the BR's circumstances change during the period concerned, what will happen is an adjusted Statement of Affairs is generated, to allow for that change of circumstances.

Just to clarify - If there is no surplus identified whilst an Undischarged and no IPA is sought. Does this stand once the BR is Discharged. What I am asking is - what if 1 year after discharge because of change in circumstances there is a surplus? Will IPA be sought from that point on even after discharge?

I understand that if I move out that SOA will change but my concern is that if I have no savings or surplus and BR myself without having built up some money for deposit for a room somewhere - I am will be effectively trapped at my parents house and unable to move out.

Hence my plan to be frugal on a DMP budget in order to allow myself to build up some money as a means to live independently.

But will these savings be swallowed up if I declare BR before I move out? Again, I'm not trying to dodge a bullet and I have no problem paying an IPA - but my main concern is that I will need to move out of my parents within the next 3 years and I am wondering if it is wise to BR before or after the move.

Sorry for all the questions and if I'm not making much sense - this is all pretty new to me.

And thank you for the link Tigerfeet - I have spotted that thread a few weeks ago and started to read it which I think is what gave me the courage to take a serious look at my life. Time for another look I think.

Best of best,

RR

egrescrimp

The IPA would need to be agreed whilst you are undischarged, if during your bankruptcy it's deemed you have surplus whilst living with your parents then that would go into an IPA. If however your circumstances change and you move out and have your own place then you would need to discuss the changes and have your IPA changed to meet your current reasonable living expenses.

It would probably make it easier for you to save up the deposit etc needed to move out and then move out. Then declare bankruptcy once living on your own and base the SOA on your living requirements at that time. Would make it easier to rent prior to bankruptcy too

randomrules

Hello again,

I haven't yet been in touch with pay plan or anyone. It turns out I only started on SPP this month due to being paid a full wage for my first 4 weeks off. (However, I didn't notice this because I blew that full wage gambling and then some. The fact that I didn't even really notice a full wage being paid into my account tells you all you need to know about how financially stupid I have been.)

I am not proud of this and I want to change. I totted up how much I had blown on gambling just in the last month and it is over 6k. This isn't the usual amount - but can only imagine it was some kind of suicide by debt attempt.

The reason I haven't contacted pay plan is a difficultly in drawing up a SOA.

I am unsure of how much I will receive at the end of this month in SSP (as I worked a few days here and there as the start of a possible phased return). So it is hard to say just how much money I will have.

Also, because 6k of my debt only appeared this month it has yet to appear on a statement, so it is hard for me to know exactly what each credit card will be asking. A lot of the gambling was via cash advance so I know I will be paying higher rates on this but I'm not sure how to work out what the min payment will be.

So without a clear idea of my incomings or outgoings it seemed pointless to contact pay plan until at least next week when I know what I've got coming in - as regardless of what I am asked to pay, I won't have enough.

My final question is also to do with drawing up the SOA. I am currently back home with my parents. They have been very good to me in not really asking for any rent - although I do help out with petrol in the car and other little bits here and there.

Since having to confess the mess I am in my dad is understandably angry that while he has been basically giving me free room and board (while struggling to pay his own debts off) I have been getting a full wage and blowing it out my backside. He would now like me to contribute to the household.

I have no problem with this.

I am not sure how detailed the checks are into outgoings for a DMP, but if I put down a payment for keep to my parents and start to pay them (and this doesn't appear in past bank statements - will this look bad?)

Also, if I am unable to return to work full time, there is a reasonable chance I will have to BR anyway. In which case, my worry is again that the OR will look and only be able to find a few months of these payments to my parents and will question it.

Would I need a letter from my parents or something to explain. It just seems unfair that my parents should suffer for my stupid mistakes and I can completely understand my dad asking for some keep - because I am costing him money and he is effectively paying my debts as well as his own. Not sure how much he wants yet - but I am sure it will be less than if I was thrown out and had to try and find my own place.

In other news I have been to my second GA meeting and have self excluded from my gambling accounts and I'm seeing the GP tomorrow.

Sorry for the long post once again. Any advice warmly welcomed.

egrescrimp

Firstly, don't worry about building up a SOA based around your debts do it based on what you need to live on reasonably! forget how much you owe for a moment and work out what you need to have a reasonable life and then people can work out what your best option is. I'm sure you can take a rough estimate of what you'll receive each month or week to help build a SOA?

Secondly, what level of contribution does your father want you to pay? will it cover all bills etc? you shouldn't need a letter from your parents but should the OR question any expense you have such as a higher than normal electricity bill, you'd need to provide proof of this.

randomrules

My dad hasn't talked figures yet. But I imagine it will be a lump sum of a couple of hundred quid or so - to cover everything. I doubt he is going break it down by splitting electric bills, gas bills, etc down.

Will a lump sum be OK for on SOA of DMP and BR? Or would they want to see everything split and itemised?

To be honest, I am probably worrying over nothing - it is just that I don't know what the level of proof for SOA is.

If what you put down is generally within the guidelines and a true reflection of what you spend to live - is this generally accepted without evidence (evidence only being needed when something is particularly high cost - or an unusual item)?

The trouble is my spending as been very erratic over the last year or so as I haven't been very responsible - so it would be hard to look at my statements and prove that I actually need 100 quid for shopping or whatever…but if as you say, I just start with a clean slate and work out the minimum I need to live eat and sleep then I guess that it the way forward.

Thanks for the reply.

egrescrimp

Keep in mind what you can put down for a valid expense in a DMP is probably very different for what you can put down in bankruptcy, one example which probably doesn't apply to you is pocket money. If on a DMP or going for a Debt Relief order you can put pocket money down as an expense but not in bankruptcy.

You need to provide a break down in your SOA, you can't just say I earn £900 per month and need £800 to live on and you can have the rest. The figures don't have to be 100% spot on but they do need to be reasonable. A good example is food, you don't need to put the exact amount down to the very last penny you'll spend but then you can't say as a single person you need £400 per month. A reasonable amount would possibly be around £160 per month, if the OR had a problem with that claim they would work with you on a compromise.

If you have a car, you can break down the cost of your MOT, Road Tax, Car insurance, Maintenance, fuel into monthly supplements for example your Road Tax might be £120 every 6 months but as you won't have a credit line to rely on you can say you need £20 per month towards your road tax (I recommend putting it away to one side for when it's due though, don't leave yourself short!).

Don't worry about what your spending has been like over the last year or even 6 years, the SOA is based on what you need going forward now that you are taking action to resolve your debt problems.

You can have an emergency fund, normally £10 per person for who your income covers. So if you have no dependents on your salary a £10 emergency fund would be perfectly fine.

This is a fresh start for you if you take the bankruptcy route, anything you've done in the past is just that .. in your past! Please try not to worry about your past spending habits and what you may of previously scrimped by on to survive, those days would be gone and you get the chance now to have a reasonable living allowance to rebuild your life with

Good luck with whatever route you take and try work on getting some figures from your father to help build your SOA

Noodles78

randomrules wrote: »

I just start with a clean slate and work out the minimum I need to live eat and sleep then I guess that it the way forward.

First thing you need to do is get some Professional advice on your situation. When I say "Professional" that doesn't mean paid advice. CAB, Stepchange, NDHL, etc, etc are a free service & just as good (if not better in my opinion) at advising us mere mortals with our financial situations. They will also advise you with your SOA but please also use the help of people on this forum who have gone or are going through the Bankruptcy process as their experiences & knowledge of the process are just as important.

Something I can help you with though is that Bankruptcy doesn't mean you have to live to a "Minimum". A Bankrupt is allowed to live a "Reasonable" life style. Reasonable does not mean basic!

randomrules

I've been in touch with Stepchange and sorted an SOA. Agreed £250 per month with my dad to cover everything.

Arranging token payments via Stepchange and I have rang all my creditors to let them know I am in difficultly. All accounts on hold for 30 days until Stepchange get in touch with them.

Feeling a little better about things now I have spoken to them. I realise there will be tough times ahead no doubt whatever happens - but at least I have got things moving.

Thanks for all your support so far.