Bankruptcy Coming Up: Help!?

jasonbudd1984

Hi

Due to various reasons (but mostly very poor mental health) I have a very significant amount of debt on credit cards and loans.

I can just about service the debt repayments on these presently, and tread water as it were.

However come May next year I am due to have a serious operation and I don't know whether or when I will return to work. This obviously has some impact on my finances.

I will be applying for PIP and ESA in May and declaring bankruptcy in the same time frame.

I own no assets and live with my parents. I am keen to understand how going insolvent could effect me long term.

I have been reading about the bankruptcy Income Payments Agreement, this needs to be applied before you are discharged is this right? I anticipate I am not going to be able to work for at least this amount of time: so say after this first year and by then I am a discharged bankrupt, if I were to get work would I still need to make payments towards the debt?

I understand how all this will go on my credit file for a number of years, and I could get a BRO.

I am just trying to work out what to do for the best.

HappyMJ

You only make payments for a year in almost all cases. The only time it would exceed a year is if you are not co-operating.

You really need someone to look at your circumstances in full but if you've got no assets, no income and no prospect of that changing in the next 12 months then either a BR or a DRO would be a reasonable option to consider.

As you now know you'll be going to go BR or get a DRO in May try and avoid taking on any further loans or credit. You can stop paying the ones you have now saving the money for the fees and a small emergency fund (one you keep in cash at home) just don't take any more credit on.

egrescrimp

HappyMJ wrote: »

You only make payments for a year in almost all cases. The only time it would exceed a year is if you are not co-operating.

You really need someone to look at your circumstances in full but if you've got no assets, no income and no prospect of that changing in the next 12 months then either a BR or a DRO would be a reasonable option to consider.

As you now know you'll be going to go BR or get a DRO in May try and avoid taking on any further loans or credit. You can stop paying the ones you have now saving the money for the fees and a small emergency fund (one you keep in cash at home) just don't take any more credit on.

The IPA would be for 3 years, you can only be given an IPA if you are earning a wage (benefits cannot be used to fund the IPA).

If you aren't given one during the 12 month period, then you won't have to pay anything should you get a paid job at the 13 month mark for example.