Would bankcruptcy be a good option??

LJW_2

Hi, not sure what to do about this for the best or what option so hopefully somebody out there can help!

My 19 year old son is now in debt of £5,500 due to buying a car he couldn't afford!!! He also owes £400 on car insurance. To pay this off would take him years as he is only on a low wage as an apprentice. Would bankcruptcy be an option or should he just pay it over over the next zillion years!!

Hope somebody can advise.

CLAPTON

he needs to post a SOA before advice can sensibly be given.. details of income and expenses and the debt details.

presumably the car can be sold and this will help to pay some of the loan off.

betterlatethannever

Hi LJW,
In my opinion, this seems a small amount for one so young to be considering BR, Br is a HUGE step and should never be taken lightly. Although if he can't afford the repayments the actual amount is unimportant-if you can't afford it, you can't afford it and thats that.
If hes struggling with the repayments is there no way he can increase his income a little (night time glass collecting/bar work etc) ?
Maybe he should contact one of the free advice agencies, such as:

Your local CAB Office and ask to speak to a 'money advisor'.
The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111
National Debtline - Tel: 0808 808 4000
Payplan - Tel: 0800 917 7823.
or visit
http://www.cccs.co.uk/
http://www.nationaldebtline.co.uk/
http://www.citizensadvice.org.uk/index.htm

Hope this helps a little

debt_doctor

Im taking a guess that it is a shortfall debt after a controlled credit agreement ( hp) ?? Bankruptcy is a massive step for such a relatively small amount of debt. I think a DMP is more sensible in the 1st instance.

Maybe he could then take advantage of next years new legislation of the'debt relief order' which is for people who have debts of £15 K or less, very little asetts, and will not have the effects that bankruptcy has. It is also only going to have a cost of about £ 100 to it.

Best wishes

DD

ps good night all !

LJW_2

Hi thanks for your advice. Can I ask what a DMP is and where could I get more information about this thing you said would be coming in next year?

Also I have taken charge of my sons bank account and will be giving him limited money each week so the rest can be paid to the debts. By the way the amount is for the shortfall of the car. Lot of money for saying he only had the car 2 months!!!!!!!!!! But on the positive side surely he should learn from this!!

scaredwitless32

Hi,
Anyone on the debt charities (links above in betterlatethannevers post) will be able to offer you advice on a DMP, Debt management plan, and the info on the new debt relief order is on the following http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/intermediariesworkingroup/debtrelief.htm
Hope this helps

Just had a quick look and theres not much info on the relief order, just a vague outline of how it works.