Completed SOA - considering bankruptcy

GillsMan7

Hi there,

Situation is that a personal guarantee on a loan I guaranteed has crystalised and I am now liable for £50K+. I've already been living on credit for months as my partner is on a zero hours contract. I spoke with Step Change who advised bankruptcy. I thought I'd canvas the thoughts of this board before I go ahead and submit an application.

In the household there is myself and my partner and our young daughter. I also have two children from a previous marriage who stay with us at weekends.

I've not had a holiday in nearly two years so I haven't put anything down for that, and I've not bought any presents (I have some very understanding family) so didn't put anything down for that.

Can you please let me know your thoughts on the below?


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1 (2 children stay at weekend)
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 3150
Partners monthly income after tax....... 250
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3400

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1250
Management charge (leasehold property).. 0
Council tax............................. 201
Electricity............................. 49
Gas..................................... 49
Oil..................................... 0
Water rates............................. 43 (this will reduce to £25 in February 2018).
Telephone (land line)................... 19
Mobile phone............................ 18
TV Licence.............................. 13
Satellite/Cable TV...................... 35
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 30
Petrol/diesel........................... 50
Road tax................................ 16
Car Insurance........................... 39
Car maintenance (including MOT)......... 10
Car parking............................. 5
Other travel............................ 492 (monthly train ticket to London for job)
Childcare/nursery....................... 0
Other child related expenses............ 630 (maintenance/alimony)
Medical (prescriptions, dentist etc).... 35 (contact lenses)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Child Trust Fund........................ 30
Meals at work........................... 20
Dry cleaning............................ 13
Total monthly expenses.................. 3390


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 800

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Guarantee.............54000.....550.......0
Lloyds Loan....................9900......404.......13.2
Lloyds Loan....................22500.....421.......11
Tesco Credit Card..............4300......40........0
AmEx Credit Card...............13700.....400.......0
Overdraft......................2400......0.........0
Total unsecured debts..........106800....1815......-


Monthly Budget Summary
Total monthly income.................... 3,400
Expenses (including HP & secured debts). 3,390
Available for debt repayments........... 10
Monthly UNsecured debt repayments....... 1,815
Amount short for making debt repayments. -1,805

Personal Balance Sheet Summary
Total assets (things you own)........... 800
Total HP & Secured debt................. -0
Total Unsecured debt.................... -106,800
Net Assets.............................. -106,000

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

fatbelly

It definitely looks like bankruptcy to me. Not sure all of those expenses will be allowed but a small IPA for 3 years would be a small price to pay for dealing with 107k of debt.

What are the 'other travel' and other child related' items?

debt_doctor

Hi,


Is the child related figure child support for the two children who visit at weekends?
DD

GillsMan7

fatbelly wrote: »

It definitely looks like bankruptcy to me. Not sure all of those expenses will be allowed but a small IPA for 3 years would be a small price to pay for dealing with 107k of debt.

What are the 'other travel' and other child related' items?

Ha! I completely agree about IPA being a small price to pay. The other travel is my monthly season ticket to London for my job. Other child related is alimony or child maintenance which I pay to my ex-wife. I've updated the SOA to provide that clarity.

debt_doctor wrote: »

Is the child related figure child support for the two children who visit at weekends?

Yes - the two children who visit at the weekends are with my ex wife and it's to her that I pay the £630 per month for child maintenance/alimony or whatever you want to call it.

debt_doctor

Well that certainly puts a different light on things!
I presume that travelling by car would be out of the question to work? Would it be cheaper including parking? Peak traffic? Car not up to big mileage?
Can you prove a need for a car?


Its easy to look at a decent salary - only for it to be clobbered by massive travel costs and other things!


To be honest, you could double your groceries budget and still be ok, so on your new information can't see how any IPA could be justified.
DD

Fosterdog

Has the level of child maintenance been ordered by the court? If not it is almost double what the CMS suggest based on your earnings and the children staying with you on weekends.

debt_doctor

Fosterdog wrote: »

Has the level of child maintenance been ordered by the court? If not it is almost double what the CMS suggest based on your earnings and the children staying with you on weekends.

Hi,
It seems roughly equivalent to 20% net income to me (I know it's on gross these days but still roughly the same).
2 days a week isn't enough to get a 'discount' on child support - need to have the children more than 104 nights per year to get a reduction.
DD

GillsMan7

debt_doctor wrote: »

Well that certainly puts a different light on things!
I presume that travelling by car would be out of the question to work? Would it be cheaper including parking? Peak traffic? Car not up to big mileage?
Can you prove a need for a car?
Its easy to look at a decent salary - only for it to be clobbered by massive travel costs and other things!
To be honest, you could double your groceries budget and still be ok, so on your new information can't see how any IPA could be justified.
DD

Thanks for your input, very helpful. Our groceries cost has been a lot more, but I've factored in that we need to reduce our costs hence going for £300. With regards to travel to work, I work I. Canary Wharf and live 60 odd miles away so train is my re convenient and, I think, cheaper. Could I prove the need to keep the car? I don't know. I could cycle to the station instead of driving so that would be fine, but I pick up/drop off my children which would be hard to do in a bike!

Fosterdog wrote: »

Has the level of child maintenance been ordered by the court? If not it is almost double what the CMS suggest based on your earnings and the children staying with you on weekends.

The amount is not court-mandated as we avoided the courts. Are you sure I'm paying double? The kids stay with me one night a week, they'll stay with me for a week a couple of times a year but I also miss out on a couple of weekends when they are awzy or I am away with work. I just did a quick check and it sems like I'm paying about a tenner a month more than advised.

Fosterdog

I've just run the numbers on there again and by calculating your weekly income as £726 (3150x12/52) and having another child in the house. I did base it on you having them for 52-104 days a year as you said they stay at weekends which is usually two nights a week and by the time you add any full weeks it should take it into that bracket even if it's only one night a week with the odd night missed. That brings it out at £89 a week so £356 for four weeks so not quite half of what you pay but not too far off.

debt_doctor

I ran the calculator with a best guess of gross income and one child permanent resident and it came out about £60 pm less than the quoted figure.
The visiting children at the weekend make no difference to the calculation.
DD

GillsMan7

Thanks both - my salary is £59,500 - this is made up of a base salary and a car allowance. I do get bonuses on top, but these are not contractual (i.e. the company reserves the right not to pay them) and I'm aware that if I get a bonus in December, I'll declare to the OR, who'll keep the bonus to pay the creditors.