student thinking of going bankrupt....

mullen1981

hello, im a 32 year old student nurse and Im in a bit of a sticky spot and need some advice?

two and a half years ago i was in debt due to losing my job and having debt from a house, i wanted to get myself out of the debt and looked at a iva or going bankrupt. I decided on a iva with payplan due to wanting a chance to pay off the debt. During the two years i was in the IVA i had various disasters with regards to work and i lost jobs and found them quickly but at a much lower pay- as a result i was being given payment breaks till i found work and they resumed at the same amount despite being on lower pay- i was always told "we will load the missed payments to the end of the term" - great i thought till this option was eventually stopped. By this time (about 18 months ago) the payments had gone upto £400 per month which was from originally £150 per month at the start of the IVA. Still i managed to pay these off but at the end of last year i literally ran out of money due to working on a zero hour contract at work. My IVA failed this Febuary and since then I've been at a loss as to what to do...

i went to my local CAB and asked what my options were and due to having £23k in debt and no assets at all - bankruptcy was suggested. Until now, i was stupidly too proud to go bank rupt and this is despite having no mortgage, a motorcycle worth £900 and no savings or assets what so ever.

I've now came around to thinking bankruptcy is a option i NEED to take but I'm petrified.

The main problem i have at the moment is the debt from payplan has been passed to third parties who are calling non stop and despite me telling them I'm considering going BR and that i don't have any money to offer them they are STILL contacting me non stop demanding money i just don't have!

The advisor at the CAB suggested i make a token payment of £1 to each of the creditors on my IVA failure pack, and even if they refuse still set up a standing order. I tried calling them and telling them this and the creditor who i owe £13k to just point blank refused. I advised them i literally have not a penny to pay them and they just seem to be getting very pushy.

my problem also now lies in the actual cost of the BR... i don't have £700+ to actually go BR right now so it would take me at least 6-8 months to save for this, but what happens to the creditors who are chasing me for debts now and who refuse the £1 payment?

I can afford to pay the token payments till i have the money to go BR but how long will they accept that for (if they do?!) and what happens when they want there money now? i obviously don't have £23k sitting in my bank or i would give them it..

at the moment I'm renting a house with my partner, i have no bills in or anything for the house in my name apart from my motorcycle/insurance, mobile phone, and i give my partner cash in hand for my help with the house. i have no expensive items apart from my laptop that i use for uni and thats it.

i currently get £300 per month nhs bursary and £700 every 3 month for student loan which i break up into monthly amounts to a get £200 so all in all i have roughly £500 income, my current outgoing are £400. i work part time on a zero hour contract so some months i might make £200, some months nothing. i got my last student loan in april and my next one will be october so thats 6 months on £300 a month bursary.

will bankruptcy make things better for me? due to being in a iva for so long i know how to live within my means i.e if i don't have the money i don't get it etc but if i get my bankruptcy in the new year what happens during that first year as in, what happens one month if i make a little bit more or less do i pay into it the BR like you do on a IVA?

also after that first year what happens in terms of my credit? i know it stays on my file for 6 years but does that mean i have to wait 6 years before i could get a car on finance etc?

finally will going BR affect my university course? (adult nursing) or of getting job as a nurse once qualified?

I've really been petrified of typing out this post as Im worried i get abuse for being so young and thinking of BR, but the debt is not off being daft with money i just made mistakes when i was younger and lost money on a house.

any support or advise would be great


thank you

TheGardener

Hi - firstly however bad BR is - its probably not half as bad as where you are now. Most of us on here ended up with BR because of a series of decisions we made or circumstance we could not influence. If you want to cheer your self up a bit read the famous BR's post and see how many 'rich' people have been BR
You need good advice and to speak to the debt charities - they are all free. Start with Stepchange on line - they have a debt remedy tool. Or try National Debtline or you local CAB IF they have debt expertise (they don't all have it)
Going BR would not as far as I am aware have any impact on your job as a nurse - its mostly financial jobs and school governors that are affected.
If you plan to go BR you basically stop paying everyone while you save up - on your income it is highly likely you will get some help with the fees - again you need to speak to the debt charities.
The bike should be fine if you need it to get to work/training and the OR is not interested in laptops or other basic electrical goods.
You are unlikely to get an IPA on your income
You may be able to get credit in less than 6 years but it will probably be expensive credit and will depend a great deal on how you manage your financial affairs after BR.

mullen1981

TheGardener wrote: »

Hi - firstly however bad BR is - its probably not half as bad as where you are now. Most of us on here ended up with BR because of a series of decisions we made or circumstance we could not influence. If you want to cheer your self up a bit read the famous BR's post and see how many 'rich' people have been BR
You need good advice and to speak to the debt charities - they are all free. Start with Stepchange on line - they have a debt remedy tool. Or try National Debtline or you local CAB IF they have debt expertise (they don't all have it)
Going BR would not as far as I am aware have any impact on your job as a nurse - its mostly financial jobs and school governors that are affected.
If you plan to go BR you basically stop paying everyone while you save up - on your income it is highly likely you will get some help with the fees - again you need to speak to the debt charities.
The bike should be fine if you need it to get to work/training and the OR is not interested in laptops or other basic electrical goods.
You are unlikely to get an IPA on your income
You may be able to get credit in less than 6 years but it will probably be expensive credit and will depend a great deal on how you manage your financial affairs after BR.

thanks for your post - i breathed a sigh of relief when i was reading it as i was expecting a back lash ha

as i mentioned due to being in a IVA I'm used to living within my means so i know i can't get any finance etc but when i go BR will that be the only way my employer will know due to my tax code changing?

i went to my local CAB and she went through my finances and what bankruptcy is all about but i did leave feeling a little deflated, as she was constantly checking her watch to make sure we didn't go over the hour and hurrying us on. i personally found that the CAB gave me information i could of found out online, i wasn't expecting a magic wand to make all the problems go away but i was left thinking they were going to make a difference.

if i chose to not pay my creditors till i can afford to go BR (which sound ironic) how do i keep them from even taking me to court?

thats one threat I've seen in a debt letter, they will start court proceedings despite me telling them i can't pay, what will happen then?

dancingfairy

If you have a search on here you should be able to find the telephone harrassment letter. You should send your creditors this to give you a bit of breathing space so they are not constantly ringing you.
Speaking to them on the phone is a waste of time as a) they might not listen to what you say b) their main aim is to pressurising you into paying what you obviously can't afford and c) you have no record of what they said. Keep all communication in writing.
Unfortunately if you tell the companies you are going to go bankrupt, it can just make them all the more desperate to get money out of you. If they know you are thinking about going bankrupt they know they only have a certain amount of time/options to get the money out of you before the debt is included in the bankruptcy.
Check whether you would have to pay the full bankruptcy fees as you may qualify for a reduced rate.
Do you have anyone that can lend you the money? Would the college/uni be able to help you out with a bursary or anything?
Would the NHS help? (I know in a few industries some places will help with bankruptcy fees).
df

TheGardener

I didn't have a great experience with CAB either but I used the online debt remedy tool at StepChange and called them for help filling in the paperwork - they were amazing! Then I read everything I could find on this forum (which is amazing) and gradually go my head round how it all works. do read the stickies at the top of the board
Are you in a Union at work? If so - find out if you can get help from them with fees and with such a low income you will probably be able to claim remission of some of the court fees.
If you work for a large organisation like the NHS, even with a NT code, its unlikely to get back to the 'boss' its easy to hide in a big payroll dept and if you are a student working you could hint that the NT code was to do with your student status - there are lots of reasons someone might get a NT code and they are not allowed to ask really - do you even earn enough to pay tax?

Just keep reading and if you need anything clarifying, post a question on here - there is no such thing as a dumb question

alastairq

Hi...and welcome to the enlightened club!

Your story only goes to hilight how easily an IVA can fail....[An IVA is another form of Insolvency, anyway].....

http://debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/

The above is not so much for you, as for those others whoa re lurking here?

MAybe worth having a further delve on that site for information regarding Bankruptcy too?


Keep paying hte £1 per month token payments to all unsecured creditors regardless of whether they like it or not.

Set the payments up as Standing Orders, or pay by a method why leaves a paper trail.

The reason for the token payments isn't about keeping a creditor quiet. [that will never happen...learn to be immune to their protestations?] The reason is, in simple terms, to demonstrate to a Court, if necessary, that you are 'willing to pay'?

This is important, if one or more of your creditors decides to seek a CCJ against you. Whilst you have no issues acknowledging the debts [or, if you do have issues, tell the Court]....you can show, via the evidence of token payments, that you are not ignoring them.

It is also important at this stage, to avoid 'favouring' one creditor over another. [despite their best efforts at persuasion]


Now that you have been compelled to accept that BAnkruptcy is in fact, the way forwards [and should have been done before you started out down the IVA route, too??].....CCJ's, etc..whilst an inconvenience, will eventually be trumped by the BAnkruptcy.

Since, technically, bankruptcy cannot be pre-ordained...but only occurs, at the hour, on the day.....there is no point informing all & sundry [creditors] of your plans..[for that is all BR is at the moment, plans!].....!

But it is important that you start right now, preparing for life after the Bankruptcy petition.

You do this by firstly, opening up one or two basic bank accounts, with either Co-op [Cashminder] or Barclays. Do not mention BAnkruptcy, even if asked.
These are currently the two banks who are BR-tolerant...but each has its drawbacks, as noted on this forum.

Re- your BIke?

Well, the insurance may pose an issue, depending on how you pay for it?

Whilst BR itself does not preclude you from obtaining credit...your zapped credit records will put folk off......

Of course, the bike itself could prove an asset in eventually aiding funding for the BR petition?


BTW, even if an IPA were sought once BR.....the IPA/IPO system is far more flexible at responding to changing personal circumstances, than any IVA payment system.
[and, one doesn't have to play catch-up, either]

Also, remember, and IPA is an agreement, and not imposed upon the BR.

But, as all have said above, ask questions on here......we do not judge, or moralise.

National_Debtline

Hello there,

Do have a look at the Debt Camel site that was posted up by Alistair, it's really very good.

Bankruptcy can appear to be quite a daunting thing to go through, but in reality it may be a very simple process. It's absolutely vital to ensure that you are fully aware of how the process works and what the potential implications are. Many of these implications are very similar to those within an IVA. Two examples are that your name would appear on a public register and that your credit file will be significantly affected.

Please do take time to have a read through our bankruptcy fact sheet. It's very comprehensive. You're welcome to to call if you have further questions. Alistair has already outlined the key points to consider, I hope you feel a little more optimistic that bankruptcy could be a very positive route forward.

Best wishes,

David @ National Debtline.

owlet

Hi, I can also highly recommend Step Change. They helped me at each step and then went through the forms with me to make sure they were correct.

macbabypam

No problems with the NHS and bankruptcy in your capacity as a nurse. I also work for them and was also allowed to obtain a lease car while BR. My NT tax code was never mentioned by anyone.

Try not yo worry, BR is a daunting process to begin with but you will get some relief on knowing you have dealt with your debt problems head on, then just live your life.

alastairq

Tax codes of any sort are highly confidential.

Anybody working in a payroll department, anywhere, is subject to confidentiality rules...the slightest whisper, and they're gone! [Or, should be!]

There are many reasons why a NT code is applied....BR rules are but one of them.

Bosshugo111

Sorry I can't be if help on your thread but Can I ask why do you have to pay to be made bankrupt?? You make yourself bankrupt because you can't afford it so why do they charge you to do it? I'm considering it myself so interested to know?? Also after you go bankrupt it shows on your credit file for 6 years, after that 6 years do you still have to declare it when companies ask such as insurance companies? Thanks