The process has begun :(

EllieBelly

After lots and lots of stress over the past however many months, years really with hindsight, I'm now at a point where I can't financially keep my head above water and am beginning the BR journey. Cancelled all my debt related direct debits in order to save for the BR fee and have applied for the Nationwide FlexBasic account.

Feel sick about the whole thing and ashamed for having got myself in this situation. Dreading the OR interview more so than attending court!

My income is made up of Child Tax Credits, Child Benefit, Child Maintenance payments and Student Loan - am I correct in thinking I can't/won't get an IPA even though I have a surplus or can they claim money from the maintenance I receive (£319 p/m)?

I can't claim Income Support year round due to receiving the student loan but I CAN claim during uni holidays - is it worth me doing this? Would I be able to keep it? Not even sure if I'd qualify anyway, I seem to recall that they take maintenance into account?

National_Debtline

Hi Ellie


Responses in bold below.

EllieBelly wrote: »

After lots and lots of stress over the past however many months, years really with hindsight, I'm now at a point where I can't financially keep my head above water and am beginning the BR journey. Cancelled all my debt related direct debits in order to save for the BR fee and have applied for the Nationwide FlexBasic account.

Feel sick about the whole thing and ashamed for having got myself in this situation. Dreading the OR interview more so than attending court!

My income is made up of Child Tax Credits, Child Benefit, Child Maintenance payments and Student Loan - am I correct in thinking I can't/won't get an IPA even though I have a surplus or can they claim money from the maintenance I receive (£319 p/m)?

Your benefits and student loan will not be classed as income for the purposes of calculating an Income Payment Agreement (IPA). Your child maintenance, on the other hand, can be treated as income for this purpose.

EllieBelly wrote: »

I can't claim Income Support year round due to receiving the student loan but I CAN claim during uni holidays - is it worth me doing this? Would I be able to keep it? Not even sure if I'd qualify anyway, I seem to recall that they take maintenance into account?

As per the other benefits above, Income Support would not be classed as income for IPA purposes. You should by all means apply for it, as child maintenance is normally disregarded when determining your Income Support entitlement.


Dennis
@natdebtline

EllieBelly

Thanks for your quick reply. What a shame, if only they were cash payments - I suspect the OR would have something to say if the payments conveniently stopped so close to BR!

National_Debtline

It's worth adding that just because the maintenance can be treated as income, it's by no means certain that you will be asked to enter into an IPA. It'll just come down to the OR's assessment of whether there is spare money available in your particular case.


Dennis
@natdebtline

alltaken

Not to offer any kind of fluffing of your figures but my own personal experience tells me that I severely understated some of my expenses, forgot about some and hadn't calculated the entire year.

Could you post up your income and outgoings? We can take a look at any expenditure that might be lacking.

EllieBelly

I did do a SoA but stupidly didn't save it and I'm pushed for time at the moment (lots to prepare for son's birthday tomorrow!).

Briefly:

(1 adult, 3 children)
Life Ins. - 8.79
Nursery - 615.00
Link Club - 222
Car Tax - 24.93
Car Ins. - 61.45
Rent - 480.00
School Meals - 32.00
Mobile - 20.00
Food and Toiletries - 450.00
Clothing/Footwear - 84.00
Meals at Uni - 33.00
School Trips - 15.00
Hobbies - 30.00
Sundries - 50.00
Pocket Money - 33.00
Fuel - 200.00
Car Parts/Servicing - 30.00
Hairdressing - 30.00
Uni supplies/books - 40.00

I expect these totals are too high and will be knocked down? Up until last week I was living in a private rented house but have moved back home due to current financial difficulties. Prior to this I had no surplus at all but now I'm left with approx. £200 p/m using the figures stated above.

TheGardener

Council Tax, Gas, electric, TV, Internet, car parking, modest holiday fund, emergency fund, optician/dentist/prescriptions, ...?
and how much is the car worth?

EllieBelly

TheGardener wrote: »

Council Tax, Gas, electric, TV, Internet, car parking, modest holiday fund, emergency fund, optician/dentist/prescriptions, ...?
and how much is the car worth?

No council tax with being a full time student (sorry, that wasn't made clear in my previous post), yearly parking permit covered by a university scholarship, no household bills bar the rent I pay to my mum of £480, no cost for dentist/prescriptions due to tax credit exemption and I haven't been to the optician for years (something I need to look into actually!) but I think this is also free. Any idea how much I could budget for holiday fund and emergency fund?

See, my Mum isn't in contract anymore with Sky for tv/broadband/line rental so in theory she could cancel and I take out a new contract in my name and she gives me the cash but obviously not comfortably with out and out fraud to attempt to escape an IPA

Eta. car was bought in Jan 15 for £600, probably worth considerably less now so that should be fine to keep.

absolutereturn

EllieBelly wrote: »

After lots and lots of stress over the past however many months, years really with hindsight, I'm now at a point where I can't financially keep my head above water and am beginning the BR journey. Cancelled all my debt related direct debits in order to save for the BR fee and have applied for the Nationwide FlexBasic account.

I want to say thanks for posting this:dance: because I was looking for a current account with a debit card and no monthly fees and it wasn't easy to find one with a few defaults even though they are quite old. Although these guys ran a credit check, it looks like they only approve you if you have defaults, or so it seems from the questions asked. :rotfl:

EllieBelly wrote: »

Feel sick about the whole thing and ashamed for having got myself in this situation. Dreading the OR interview more so than attending court!

There's nothing to be ashamed of, remember a lot of the banks also went bankrupt in 2008, here in the UK, in America, Switzerland and other countries, only they got bailed out with taxpayers money. :mad:

EllieBelly wrote: »

My income is made up of Child Tax Credits, Child Benefit, Child Maintenance payments and Student Loan - am I correct in thinking I can't/won't get an IPA even though I have a surplus or can they claim money from the maintenance I receive (£319 p/m)?

I can't claim Income Support year round due to receiving the student loan but I CAN claim during uni holidays - is it worth me doing this? Would I be able to keep it? Not even sure if I'd qualify anyway, I seem to recall that they take maintenance into account?

You shouldn't have to make any payments if you only have income from benefits, tax credits and a student loan.

Bankruptcy can help you start again with a clean slate but you should look at all the other options before making a decision. I know someone with debts of £150k :eek: who didn't take that option. You don't say how much you owe in total but the DRO threshold was recently increased to £20k. You don't say what you are studying but in certain professions a BR can affect your employment prospects even after you've been discharged.

EllieBelly

absolutereturn wrote: »

I want to say thanks for posting this:dance: because I was looking for a current account with a debit card and no monthly fees and it wasn't easy to find one with a few defaults even though they are quite old. Although these guys ran a credit check, it looks like they only approve you if you have defaults, or so it seems from the questions asked. :rotfl:
There's nothing to be ashamed of, remember a lot of the banks also went bankrupt in 2008, here in the UK, in America, Switzerland and other countries, only they got bailed out with taxpayers money. :mad:
You shouldn't have to make any payments if you only have income from benefits, tax credits and a student loan.

Bankruptcy can help you start again with a clean slate but you should look at all the other options before making a decision. I know someone with debts of £150k :eek: who didn't take that option. You don't say how much you owe in total but the DRO threshold was recently increased to £20k. You don't say what you are studying but in certain professions a BR can affect your employment prospects even after you've been discharged.

Thank you for your kind words, they're very much appreciated.

Debts are c. 30K I'm afraid.

See this is my main concern - I'm actually in the 2nd year of an accounting degree I'm planning to emigrate to New Zealand once I graduate, do I take the risk of my BR not being uncovered in the future? Do I jeopardise my whole future? Now I'm living at home and DO have a surplus, then really an IVA would appear to be my best choice I'd have thought although I'd prefer BR.

absolutereturn

EllieBelly wrote: »

Thank you for your kind words, they're very much appreciated.

Debts are c. 30K I'm afraid.

See this is my main concern - I'm actually in the 2nd year of an accounting degree I'm planning to emigrate to New Zealand once I graduate, do I take the risk of my BR not being uncovered in the future? Do I jeopardise my whole future? Now I'm living at home and DO have a surplus, then really an IVA would appear to be my best choice I'd have thought although I'd prefer BR.

The BR stays on your credit report for six years as would anything else (defaults, CCJs or an IVA). That's on your UK report, of course.

An IVA is also a form of personal insolvency and would really only be better if you were a homeowner. With the IVA you'd have to pay at least £200 a month for five years, which is a long time to make this commitment. If not, the IVA would 'fail' and you could still end up being made bankrupt. Not everything you pay into the IVA goes to creditors, a good chunk goes towards the IP's fees for running the IVA and, unlike BR, creditors can object to the IVA.

You could well look into other alternatives like an informal DMP with pro-rata payments or just offering token payments while you are in the UK. If you leave the UK and have no assets here (property), there isn't much your creditors could do anyway, they'd be wasting their time if they were to issue claims to get CCJs that they couldn't enforce against you in NZ.