Thinking of bankruptcy

Jameel90

Hi everyone,

Really nervous to post here but thinking of going bankrupt shortly. I live with parents and i'm currently out of work due to not having my probationary extended (Nov 17).
I have debts of 24,000 unsecured and sold my only asset (car) a few weeks ago. Out of the money for the car I gave my mum 2 months board money i'd missed and also took a short relatively inexpensive trip abroad to see a family member. I have still got around £1000 left and would use this towards bankruptcy fees. My debt has been racked up due to frivalous spending on absolutely rubbish caused by depression which I have long been in denial about. Since insolvent I have frivilously wasted around £2000 but still have about 9,000 available credit left. I want to go bankrupt before I spend this also.

thriftylass

Hello and welcome.

How old are you? Did you have quite a good job before to be able to borrow that much.

I have a few pointers.

Bankruptcy is hard. You'll have trouble to rent or buy a house for 6 years. It sounds like you just don't want to pay for your debt as it wasn't your fault it was your depression. Even after bankruptcy you'd consider working only part time as not to pay.

First, get rid of the 9k credit still left. That way you avoid spending it. cancel the account, cut up the card. No bankruptcy needed for that.

Second, if you already do, fine, if not please get help for your depression. This seems to be the underlying cause and if that isn't addressed your habits won't change based on you original post.

Thirdly, getting a job, keep living at your parents and it should take way less than the 6 years to get rid of the debt.

I'm sure someone else will be along soon with some support and advice.

Good luck

National_Debtline

Hi Jameel and welcome to MSE,


Bankruptcy could be an option for you, but there are a lot of things to consider with this choice. So, bankruptcy costs £680 and the application is done online. Once the forms are submitted the adjudicator has 28 days to decide whether the application is successful. If you are declared bankrupt then it will normally last for 12 months and you will have certain restrictions on you during that time. Any assets such as property, vehicles, savings etc would be at risk.


The recent transaction with the vehicle would likely be looked at again. They will consider how much you sold the car for compared to its value and where the money has gone. The money that you gave to your mother could be viewed as a preference payment and it is possible she would be asked to give this back (unless your other debts also received a proportional payment). Due to this transaction, and the trip you mentioned, you may be subject to a bankruptcy restriction undertaking/ order (BRU / BRO). This means the restrictions that are normally last for 12 months can last longer (anything upto £15 years).


It is a form of insolvency and can affect other things, such as some private tenancies, employments (within certain industries) and even immigration status - so getting a private tenancy could be harder and require a bigger deposit/ guarantor. Bankruptcy is obviously very damaging to a persons’ credit file. It would be very damaged for 6 years but can affect your ability to get credit in the future.


In bankruptcy your income and expenses will be assessed – if you have more than £20per month disposable money then they can take 100% of the disposable money for up to 3 years under an Income Payment Arrangement (IPA). It may help to post a SOA so other posters can guide you further and, if necessary, consider other debt options. Good luck,


Laura
@natdebtline

fatbelly

We don't really have enough detail to advise in depth, Jameel90. Why not run your situation past someone impartial like National Debtline?

What are your prospects for returning to work?

Are you thinking of trying to move into your own place in the near future?

Are you getting help with your depression now?

Will you be needing a car in the near future?

Finally (for now) are your debts just credit debts (loans, credit cards etc) or are there any more tricky debts like tax, fines, etc?

confused?

Hi Jameel90,
Im not sure on your age category but you seem young with a lot of time in front of you? (I may be wrong).

As thriftylass & National Debtline have highlighted, it may be that Bankruptcy isn't a way forward in your case, and i would carefully consider this a bit more first, before making any rash decisions. (I'D CUT UP THE CARD THOUGH)---->B

There are other options!

The thing is when you arrive in front of the OR (Official Receiver) they will want to know all the inns and outs, including assets disposed of recently and what you spent the money on.

In your case you mention holiday's and frivalous spending on absolutely rubbish.

The problem is if the OR deems the debt to have been gambled away or wasted without a thought then they will more than likely frown upon this and you could end up with an IPA or IPO (Income Payments Agreement or Income Payment Order) like an IVA which can be much more expensive than the original debt and last much much longer than the actual bankruptcy.

I won't go into it in too much detail but if you have a good job or get a good job (being currently unemployed) while the OR is on your case, whilst professing to have minimal outgoings then you will more than likey pay it all back via the IVA anyway (and more).

IVA wouldn't be enforceable without income though (whilst unemployed).

I really don't want to get your head all in more of a mess but, please read the advice others will share and hopefully advise on here may help you make the right choice.

However read but don't neccessarily take every bit of advice on here as gospel (even mine).

In my honest opinion I would be leaning to negotiate with your creditors and reducing the outstanding debt and paying it bit by bit outside an IVA and certainly not in BR with IPA/IPO.

However as fat belly says we don't quite have enough info to advise you fully.

Regards
Confused?

P.S FYI I may look like a newby but back in 2010, I was forced into BR and although it turned out OK in the end it was a living HELL. I got a lot of help from people on here and I'm now as a consequence debt free! but only because of advice from here and circumstances imposed out of my control. chin up and digest