Don't Know What to Do

Silverlady55

Would welcome some advice please as really don't know which way to jump at the moment. I have a failed IVA and was planning on borrowing some money from a family member to try and make full and final offers to my creditors. But just when you think you might finally be able to get out of a mess, life goes and chucks something else at you! I've now had an accident so I am off work because of this. I'm still in the probationary period of new job and on statutory sick pay. I don't know how long I will be off, it could be a couple of months or longer. My employers have been lovely, but I am worried I could lose my job if I am off a long time. I am already getting debt collection agency letters from some creditors. I really don't know what to do. I don't feel well enough at the moment to enter into lots of communication with these agencies/creditors as I really don't think they will go away and give me a break for a while, just because I write and say I've been involved in an accident. So I am seriously thinking do I just go bankrupt. My job could be at risk if I do that, but the way I am currently feeling, I just feel like I want closure. I know once I get back to work (if I have a job to go back to), I will have to pay into an IPA. Can anyone who has gone bankrupt tell me please just how bad it is/or is it not that bad? I have no assets and I don't ever want anymore credit in the future. Also would I have to tell my husband if I did it? The debts are all in my name and from before I met him. He knows I have them, but he doesn't want me to go bankrupt. I am worried if I do it I will have to give his income details etc and this won't go down well. I did look at a debt management plan before my accident, but it would take me 8 years to clear my debts if they froze interest and charges and I can't currently afford to do this at the moment due to sick pay. Any advice would be welcome please.

National_Debtline

Hi Silverlady55,

Welcome to MSE

When you are trying to weigh up the different options for dealing with debts (DMP, full and final and bankruptcy) a key factor is your debt level. Unfortunately, is unclear from your message how much you owe? It is also unclear how long ago the IVA failed? These things can have a big impact on which option will suit you best and whether you will be in complete control of your options. When an IVA fails the IVA Company or the creditors reserve the right to try and make you bankrupt. Have you been threatened with any bankruptcy action at this stage? If you have then it would be worth taking some tailored, independent advice.

Bankruptcy may have reasonably limited implications for you, because you mentioned that you have no significant assets and that do not want credit again in the future. However, the extents of the consequences of bankruptcy are determined by the individual. For example, if bankruptcy would affect your employment then bankruptcy could have a bigger impact on you than someone whose job wouldn’t be affected (especially if this would prevent you re-entering the same industry). Also, please be aware that if your debts are less than £15,000 then bankruptcy may not be the most suitable insolvency option anyway; you may be able to consider a Debt Relief Order (DRO) to get the debt written off.

You stated that all of the debts are in your sole name, so this should limit the impact on your husband, whichever decision you ultimately make. In insolvency options (such as Bankruptcy and DRO’s) you are more likely to be asked to complete a household budget at some stage - just to make sure that you are splitting the household bills fairly, but your husband will not be asked to make payments to your debts. You should also be aware that if you have anything in joint names (i.e. a joint bank account) then you will have created a ‘financial association’ between each of your credit files and this means that the way you deal with your debts could impact on his credit score.

Finally, with full and final options, this can be a way of clearing the debts quickly and with less of an impact on your credit file than an insolvency option, however, the key issue would then be, do you need to pay your family back? I understand that family are unlikely to put the same pressure on you as the creditors, but if they do expect the money to be repaid then you will still need to do a repayment plan with them at some stage, so the overall debt problem has not been completely resolved.

We have a factsheet called ‘Options for dealing with your debts’ that helps you to weigh up the pros and cons of each choice, which I hope helps you. Please post more details to help narrow down the suitability of the options. https://www.nationaldebtline.org/EW/factsheets/Pages/35 EW Options for dealing with your debts/Default.aspx

Laura
@natdebtline