I Need Help Clearing My Debts :(

StopIt

fr0zen wrote: »

I have already agreed in principle F&F settlement terms with most interest bearing creditors of circa 75%. I haven't negotiated any short settlements on the 0% interest creditors so overall my 25k portion of the debt can be cleared for circa 20k. Obviously I am aware short settlements will show on my credit file but i'm looking to get further credit so different.

My only stumbling block seems to be the 20k loan, which I may have to allow to default before re-attempting to negotiatie a more favourable settlement with the creditor OR setup token payments until I am in a better position to deal with this in six months.



Stepchange did suggest BRO, but also advised that based on the fact my circumstances are very likely to change, a viable alternative would be setting up a token payment DMP and re-assess the situation in six months time.

If a £25,000 gift results in me losing £1,800 of benefits over six months, its not a big issue. With F&F settlement offers, I will save this and significantly more with the reduced payment. I'm sure there are ways that this gift which will not result in me having savings over the UC threshold is looked upon as it is intended, to service my debts.

The BRO may end up costing me a similar amount to settling my debts if I am required to pay back £1,000 a month over three years, so why bother going bankrupt and having that on my record for six years if I can clear my debts another way!

You wont have an IPA of £1,000 a month while on UC.


You appear to have a few myths about bankruptcy that need to be broken.


Firstly, a DRO will affect your credit files for 6 years exactly the same as Bankruptcy, they're both forms of insolvency. Any defaults you have will be on your files for 6 years also.


In fact, declaring BR now, will mean you can have a clear credit file by 2024 at the latest. if you waited 2 years or so to play around with the debts you have and then get a DRO for the £20k remaining, you wont have a clear credit file until 2026.


When you declare BR, you have to file a SOA with the OR. They then look at any surplus income you have, and any IPA you receive would be based on that surplus. If you're in UC, the surplus is basically non existent and you will not receive an IPA. Because the debts are gambling related you may receive a BRU/BRO but that restricts your access to credit for 3 years and means you can't be a company director etc, but isn't any requirement to pay what you don't have.


I'd fill out an SOA with Stepchange, and they'll advise you if you'll be facing an IPA, but I suspect not. if that's why you're not considering that route, re-consider.

fr0zen

StopIt wrote: »

You wont have an IPA of £1,000 a month while on UC.

You appear to have a few myths about bankruptcy that need to be broken.

Firstly, a DRO will affect your credit files for 6 years exactly the same as Bankruptcy, they're both forms of insolvency. Any defaults you have will be on your files for 6 years also.

In fact, declaring BR now, will mean you can have a clear credit file by 2024 at the latest. if you waited 2 years or so to play around with the debts you have and then get a DRO for the £20k remaining, you wont have a clear credit file until 2026.

When you declare BR, you have to file a SOA with the OR. They then look at any surplus income you have, and any IPA you receive would be based on that surplus. If you're in UC, the surplus is basically non existent and you will not receive an IPA. Because the debts are gambling related you may receive a BRU/BRO but that restricts your access to credit for 3 years and means you can't be a company director etc, but isn't any requirement to pay what you don't have.

I'd fill out an SOA with Stepchange, and they'll advise you if you'll be facing an IPA, but I suspect not. if that's why you're not considering that route, re-consider.

StopIt. Very much appreciate the detailed response, very useful information.

My concern about facing an IPA while on UC is not an issue, but as I understand it, should my circumstances change, while I am on a BRO (ie: if I have a job that pays 30k net) then my IPA will increase accordingly and I have informally calculated I will potentially have 1000 surplus income per month which I expect they would take.

You may ask, if I have a surplus income, why should I not pay this back to service my debts under bankrupcy? From my perspective, any surplus income I make in the next 2-3 years, I want to use to give to my parents.

A couple of years ago, they gifted me 22,500, which I personally saw as a loan that I wanted to repay them as they are approaching retirement age and could benefit from the money. So part of my motivation to get back into work would be to give them back this money.

Unless the IPA is fixed from the time I declare bankrupcy for the entire BRO period, I cannot see a benefit in working my balls off for three years, simply to service my bankrupcy.