I Need Help Clearing My Debts :(

MrsSave

If over the past 2 years you've brought in £100k which has been gambled, and have built up debts of £45k, if you're now still bringing in £300 a month how are you going to live day to day? Sorry if I've missed something. You mention not working for another 6 months, yet on another post discuss the possibility of a job in January. Have you been offered this job, or thinking of applying?

Until you work, how are you not going to add to your debts? How will you manage day to day? Have you addressed your gambling?

I know you don't want to go down the bankruptcy route, but that is definitely the most sensible offer in your case.

fatbelly

fr0zen wrote: »

I don't care about my credit rating, its already screwed. I just don't want to lose my cards and the freedom of not being bankrupt! I have other options available to me, which include;

1. Agree F&F Settlement on the loan @ 14k and F&F settlement on some of the other debts @ 11k = 25k total.
I can get this 25k from a close family member (repayable at anytime).
That would leave me with 11.5k of debt @ 0% interest which I could potentially set aside 1000 a month over the next 12 months if I take a job in January @ 30k a year. By the end of 2018, I will be debt free (to the banks)

My only issue with this is it worth paying off 36.5k of debt just to avoid going bankrupt? I could use this money later in life to build myself back up, and not be indebtted to family for a further 25k.


2. If I take the IVA route, what can I reasonably expect to pay back? As I understand, its based on my personal circumstances, but assume I will be earning 2500pm net and have 500 surplus each month to service my debts. Over 5 years, that is 30k repayable so I save 6.5k vs option 1 but have an IVA hanging over me for 5 years.

If I could agree a lower monthly IVA payment to my creditors of say 250 a month, over 5 years, that would be £15,000 total which the banks may have to accept through a court, as they would get less if I went bankrupt? I could handle paying 15k of 45k over five years without borrowing money from family.

Option 1 leaves your relatives 25k worse off, might not work anyway and still leaves you 11.5k in debt.

Option 2 requires you to pay your surplus for 60 months but leaves you debt-free

Option 3 requires you to pay your surplus for 36 months but leaves you debt-free. Option 3 is bankruptcy.

fr0zen

MrsSave wrote: »

If over the past 2 years you've brought in £100k which has been gambled, and have built up debts of £45k, if you're now still bringing in £300 a month how are you going to live day to day? Sorry if I've missed something. You mention not working for another 6 months, yet on another post discuss the possibility of a job in January. Have you been offered this job, or thinking of applying?

Until you work, how are you not going to add to your debts? How will you manage day to day? Have you addressed your gambling?

I know you don't want to go down the bankruptcy route, but that is definitely the most sensible offer in your case.

Some very good questions, you are very thorough in reading what I wrote.

I'll obviously never be able to live on £300 a month, but thats the official income i'll receive from UC payments should I remain unemployed. I haven't been offered a job but if I wanted too I could take a job theoretically which pays 30k if it makes more financial sense than staying on UC. Never thought I could understand how someone could be better off on benefits, but in my case, any money I earn will end up with the creditors and reduce my benefits.

The gambling has been addressed as much as possible. Accounts closed, self excluded, signed up with gamcare, but the itch is still there. Mainly resticted by my finances so I could slip back into it.

fr0zen

fatbelly wrote: »

Option 1 leaves your relatives 25k worse off, might not work anyway and still leaves you 11.5k in debt.

Option 2 requires you to pay your surplus for 60 months but leaves you debt-free

Option 3 requires you to pay your surplus for 36 months but leaves you debt-free. Option 3 is bankruptcy.

Last night I thought of an option 4.

Lets say I agree a DMP with the creditor I have the loan with. I make token payments of £1, or similar, based on my stepchange affordability plan, with the option that if I get into work I will increase this amount.

I continue to make token payments for two years towards the loan, during which time, I clear off all my other smaller debts, which I don't really consider debts, but payments I would regularly make if working (credit cards and overdrafts)

After two years, my total debt will be just the loan, ie: under 20k, and I have the option of a) paying it off with a F&F settlement or b) going bankrupt or c) an IVA and d) take out a DRO to write it off.

It will have been two years since I paid off the other creditors so I won't need to declare favouring them and actually two of the other smaller debts are with the same bank!

fr0zen

Any thoughts on the above?

Silver_Queen

But it won’t be two years since you paid them off if you’re planning to pay them off over the two year period?

EssexHebridean

If you can get a job that will pay you 30k for goodness sake go and do it! There are people on here who would happily take something paying half that but can't for whatever reason - if you CAN then DO!

From there, you live as frugally as possible and enter a DMP to sort your debt situation - yes it would be a hard road and a fair while paying off, but on decent income at least. It would also avoid the bankruptcy route that you are so set against of course, so presumably is an ideal solution?

The bigger problem is the phrase I spotted above that appears to have been missed

I don't care about my credit rating, its already screwed. I just don't want to lose my cards

CUT. THEM. UP. More credit is the very LAST thing you need right now!

lynz68

The fact you don't want to cut up your cards I believe indicates that you will continue to gamble. You need to tackle the gambling alongside the debts or your just going to end up in the same situation.

Just go bankrupt it really is the easiest option for you. Face your debts yourself and don't be getting family involved even if they are willing to help. This is your problem own it!

Max_and_sasha

Wow ..... Stop and think here a minute

You are asking for help on how best to sort your debts but for me first and foremost would be getting your betting habit sorted as you have admitted you still have the itch to gamble , cut up all cards as there always a chance you will use them again.

Regarding the debt take the great advice you have been given and go bankrupt, then get yourself a job and restart your life debt free and in employment. I honestly don't think you should borrow money off a family member as there is always a chance you would gamble it before you use it to pay things off

Sorry if this sounds harsh

Goodluck I am hoping you can kick your gambling habit

Max

fr0zen

Appreciate the latest round of replies.

I have taken measures to control the gambling. I have self excluded from all land based casinos, signed up with GamCare, closed the majority of my online betting accounts, and left a couple open with deposit limits of £20 a month so its very much in control.

My cards give me flexibility and i'm not quite prepared to have no credit available for the next six years, something i've enjoyed my entire adult life.

Back to my though process of avoiding bankrupcy, I would like to;

a) Setup a DMP for my 20k loan, offering them token payments of £10 a month, commencing in Jan 2018.
b) In Jan 2018, I borrow 25k from family, and pay off all other creditors.
c) I continue to make token payments on the loan in 2018 & 2019 = (£240 total)
d) In Jan 2020, I take out a DRO against the 20k loan and write it off (or if funds allow, I short settle it at 14k if I can save this money in 2018-2019.

What this option gives me in two years of flexibility, where I can continue to live normally and earn money to repay my family.

I spoke to the loan company yesterday to see if I could set up a DMP directly with them, which they agreed too, but they said they would not be able to guarantee they would not still default my account as the token payments were not enough to support this. So this will be a marker on my credit file for 6 years.

What could possibly happen is due to this, all other lenders will remove or reduce my credit facilities, so am I paying them off for no logical reason? Borrowing money to pay money is never advised, I have been told.

I know its easy for everyone to say just go bankrupt, but its never a clean break. I will have 2-3 years BRO of repaying back a % of my surplus income, which could potentially be a lot of money.