Help

aycliffeguy

Hi

I am after some help – I used this forum a few years ago, and unfortunately am in a similar situation now as I was then.

I went bankrupt in June 2009 and was discharged in June 2010. A large part of this was a £30k negative equity issue with a Northern Rock mortgage, plus a few other debts rolled into it.

Things went well for a couple of years, however I have recently separated from my wife, and a large element of debt has landed at my feet. I will try to post as much info as I can in the hope of getting some good advice. I am thinking about bankruptcy a second time, although this is not ideal I am unsure of any other way out.

I do not own my own home anymore, however in 6 years time after another bankruptcy I would like to do so again (sooner would be great however I am thinking whilst the bankruptcy is on my credit file it will be almost impossible).

My basic SOA each month before debt payments is as follows. If anybody can think of anything I have missed please feel free to throw it in the mix. There is virtually no household bills as I am in an all inclusive rate for a room rent in a private household.

Income
Monthly Income £2377

Outgoings
Rent £315
Income Protection Insurance £59
Mobile Phone £39
Fuel £160
Car Insurance £32
Car Tax £20
Car MOT £20
Car Servicing £20
Food £140
Gym £20
Xmas £25
Birthdays £25
Cat £20
Personal Spend £250

Total Outgoings £1145
Net Surplus £1232

I should also say my monthly income is after providing for a pension contribution; if I did not pay into a pension my monthly income would be £2475 with a net surplus of £1330.

Clearly I should be in quite a healthy position; however the debts are the issue. I have outlined the monthly payments and in bracket the outstanding values.

Ratesetter £272 (£14688 remaining over 54 months)
Parents £200 (£2000 remaining over 10 months)
Nationwide £110 (£5200 balance, £5200 limit, paying interest only balance not reducing)
Vanquis £134 (£3000 balance, £3000 limit, paying interest only balance not reducing)
Natwest £150 (£4700 balance, £4700 limit, 0% interest free over 30 months but in my parents name not mine)

On my next payday I also have some payday loans due:

Wonga £505
Cash Genie £195
Payday UK £129

Finally I have 4 payments left on an employer loan which comes straight out of my salary, this is for £560 per month.

All a bit of a mess, I’m reluctant to go bankrupt as I believe next year I would be a bit better off each month if the pay day loans and employer loan are gone, and also the parents loan will almost be gone, but am not quite sure how I get there unless I go down the route of lots of missed payments on my credit file. But if I do that am I not just easier going bankrupt?

Any help would be very much appreciated.

Thanks so much in advance
Craig

[Deleted User]

aycliffeguy wrote: »

however I have recently separated from my wife, and a large element of debt has landed at my feet.

Not following this :huh:

Where did this "large element of debt" suddenly come from?

aycliffeguy

Apologies perhaps not worded very well. Some of it was debt within the marriage that I was aware of. Some of it my proportion of debt that I "discovered" upon leaving the marriage in January - I did not know about certain elements of the debt.

One other point to mention, I am due some equity out of the marital home, I estimate this after legal fees to be £4k, which I expect to receive in February 2015.

Thanks

marliepanda

I make your regular debt repayments at £860 (lost exact figure)

You cannot service that this month with your payday loans, plus the employer loan (which I assume is coming out of your pay still)

Your net income is £28,536 and your debts total more than that. You are not in a healthy position, and that is BEFORE employer loans and payday loans. Your debt is more than your salary no doubt.

A DMP is possible but would take a long time, bankruptcy could well be a good option.

You must however think how you got into this position. You have a decent salary, but you have borrowed over that. Before you had negative equity as the cause, I can only assume you no longer have this to blame.

What has caused you to borrow well over £30,000? If you do not address in what ways you are living beyond your means then this will happen again and again.

aycliffeguy

Hi marliepanda, thanks for the reply

The employer loan will come out of my pay regardless, I cant really budge on that and the consequences of not paying it off are not worth thinking about.

The £30k is a culmination of various - some living beyone our means whilst married (expensive honeymoon, plenty of holidays, nothing tangible to show for it), plus some debt my wife incurred which I did not know about.

I can be totally honest, towards the end of the marriage I threw money at the problem rather than accepting the relationship had reached its end. Stupid but I guess in my head I did not want to accept it was over.

The only regrettable part of it was the loan from my parents - we had loan sharks turn up at the door to collect on a debt my wife had taken out without me knowing. That was the final straw and the reason I finally walked out.

[Deleted User]

aycliffeguy wrote: »

plus some debt my wife incurred which I did not know about.

If your wife incurred it alone, then you aren't liable for it.

National_Debtline

Hi Craig

I would be very wary of taking the bankruptcy route a 2nd time. At first glance it looks to me as though you may be able to get (and stay) on top of these various commitments with some sound planning.

A second bankruptcy in six years could quite possibly result in a Bankruptcy Restriction Order being imposed against you, and thus extending the length of time that you are subject to its effects beyond the usual 12 months.

You should also bear in mind that when applying for a mortgage, you are likely to be asked whether you have ever been made bankrupt.

Negotiating with your creditors to accept affordable reduced payments for now is probably your best bet, if only becaused it gives you more time to think things over fully. You need to make sure that you seek debt advice from one of the established free providers and not just base your decisions on forums like this one.

The three payday loans are likely to cause you problems unless you tackle them directly. I am assuming they are due to take their money directly from your bank on payday. You should consider cancelling their permission to do this so that you can then negotiate on your terms - see our payday loans fact sheet on how to do this.

One question: Is your current monthly income of £2377 before or after the £560 you are repaying on the employer loan?

Regards

Dennis
@natdebtline

leicestersq

Hello,

I was looking at the facts you gave. I wonder, those 3 payday loan payments, are those one off payments?

Do you have any cash at all?

You appear to have a surplus of £370 a month, or £390 if you could cut out the Gym costs. Your payday loans are £829, so you have a real credit crunch this month if you have no cash.

Also, if you take out the £560 a month for three months, the immediate deficit gets much larger. I dont know what interest would be charged on the payday loans if you make no contribution at all, but I would guess that it would make it very difficult to the point where you were repaying enough to be able to clear the debts in a reasonable timeframe.

I think I would try and negotiate with my creditors from here, as advocated by the National debtline in another reply.

aycliffeguy

Hi National Debtline, thanks for the link ref payday loans. Could you give me some more info on the Bankruptcy Restriction Order and the limitations it brings.

The net income is before the loan repayment unfortunately

Thanks

aycliffeguy

Bedsit_Bob wrote: »

If your wife incurred it alone, then you aren't liable for it.

I know technical correct however, rightly or wrongly, I'm a believer that marriage is a joint thing, not just when times are good but times are bad too. She has taken some of the debt herself also.

[Deleted User]

Has she also only taken half the assets?

What, for example, has happened to the matrimonial home, furniture, kitchen appliances, etc. ?