Debating Bankrupcy

KeepOnKnitting

It sounds like you want to avoid bankruptcy, so I have a couple of thoughts that might work. I know how stressful the ends not quite meeting is, so these are things I do myself to take the pressure off.
- House share. A lodger, particularly if they work away or shifts can be really helpful, but can also be good company.
- Move closer to work, so that you are spending less on commuting.
- Trade in that car for something cheaper. Spend £1/2k on a runabout that has been owned by an OAP.
- Work a Saturday job. You aren't out spending money, but instead can use the income. Pick something like bar work if you like socialising, or a supermarket that does a good employee discount.
- Have friends over for dinner/coffee/drinks, as often as possible. You need to see people when you are freshly divorced/single.

I know some of these might feel a bit student-ish for a grown-up, but I promise you that you aren't the first to need to scale it back a bit following a divorce.

LincsPaul

First, don't panic! Clearly you need to manage these £1200+ monthly repayments. However you are on a very good wage so I think BR can be avoided.

Move the credit card debt onto new 0% deals. Massively do this!

What was the personal loan for? Debt consolidation, or something nice which you can sell?

Chuck the car - if you went BR you'd have to anyway. Buy a reliable runner for a couple of grand and there's £400 a month right there to attack your credit card balance with. Think you can't chuck the car? Tell the PCP company you are considering going BR. I bet they'll have the car back very quickly. If they don't... stop paying it and hand the car back (re-finance your credit cards first in case they mark your record - again, harsh but better than BR).

Consider living somewhere cheaper as your rent it quite high. I'm not sure where you're based but even £150 extra a month will pay off those credit cards in a vastly quicker period of time.

If you go BR on your wage, ALL your spare cash will go to the Official Receiver for 3 years so you won't be in a massively different situation. Yes, after that you can keep everything, but I think there's hope yet.

System

Techy_George wrote: »

Apologies, I live on my own in a rented flat through a letting agency.

You can't afford it so move somewhere cheaper. Bin the gym and pay TV internet and phone can be done for under £20 a month. £180 a month on food for a single person is WAY too much, £100 a month is more like it. According to the ONS the average FAMILY only spend £54 a week on grocery shopping and that includes £4 for booze. No need to go BR but there is a need to get a grip on your spending.

System

TheGardener wrote: »

Parking - everyone pays for parking somewhere - at least £20 pm

I don't. Most of the country doesn't. I doubt I spend £20 a year on parking. Last time I paid for parking was £3 6 weeks ago to go visit a relative in hospital.

Dentist - £12 pm gets you 2 check ups and visit to the hygienist a year

HOW MUCH? Two NHS dentist check ups a year, £40 or so.

Food & Housekeeping - 300pm including work lunches etc.

For a family maybe, for a single person that is about £150-£200 more than it needs to be. Why are you having spending money on work lunches? Take a packed lunch, it costs under a quid a day.

National_Debtline

Hi Techy_George


Thanks for the extra information. What we can see is that you're just about managing at the moment, but that's not going to be the case when your pension contributions start. I'd say the biggest issue is your car. Needing a car for work is fine but needing a £35,000 PCP agreement is almost certainly not going to be seen as reasonable.


You could see if it is possible to downsize the car and move on to a cheaper deal. That may then make your debts affordable. You could also consider terminating the PCP agreement, replace it with a much cheaper car, and include any remaining PCP debt with your other non priority debts. However as that new debt would be payable in full it's likely you would need to enter into a debt option.


It's hard to calculate exactly at this stage as we don't know how much your net pay will drop to with the increased pension contributions, or how much debt you will be left with from the PCP, but it makes the options of self negotiating or a DMP much more feasible. As you'll be making payments in bankruptcy for 3 years anyway, it's a better option to go for a DMP if it's only going to last a little longer than the bankruptcy payments as you avoid some of the negatives that can come with it.


As there are quite a few variables here it's certainly a good idea to talk it through with one of the debt advice agencies. I hope it all goes well.


Susie
@natdebtline

TheGardener

Tarambor wrote: »

I don't. Most of the country doesn't. I doubt I spend £20 a year on parking. Last time I paid for parking was £3 6 weeks ago to go visit a relative in hospital. So far this month I've paid £2.50 to park in town on a Saturday - pretty normal I think? Plus I visited a relative in hospital and paid £3 and then waiting to collect DD from the airport - another £4.50 and I went to the cinema the other night and the multi-storey cost £2 ...nothing too strange there?

HOW MUCH? Two NHS dentist check ups a year, £40 or so. Having checked the NHS price list its £22.60 for a check up and £56 for a filling - so I make that nearer £100 quid!! ? - and that's IF you can find a NHS dentist taking patients...then a prescription, maybe two? ...
For a family maybe, for a single person that is about £150-£200 more than it needs to be. Why are you having spending money on work lunches? Take a packed lunch, it costs under a quid a day.

All your suggestions are fine - for a debt free wannabe post - the OP was asking about how an IPA might work - in which case your suggestions are missing the point

Techy_George

Firstly, thank you to all that have posted. There are a number of things that prevent me from doing some of the suggested points but will get round to addressing them all as soon as possible.

John-K_3

TheGardener wrote: »

The object of this exercise in BR is to avoid a large IPA - so the OP needs to ensure as much reasonable expenditure as possible IS included, not to try and reduce overheads.

If however the OP decides to go with a DMP /repayment scheme - then your ideas on reducing his overheads would be great.

I was suggesting ways that he could possibly avoid bankruptcy.

Windofchange

Assuming that the car and TV package and things like that are on set contracts with limited possibility of early termination without serious penalty, I think the way forwards is changing your living circumstances, and moving debt to 0% cards if not already done so. If you are paying £850 a month in rent for a flat, I am assuming you aren't in London? You should therefore be able to find a far cheaper place, or get into a very modest house share for a year or two. You could also potentially move closer to work so that you can walk or get the bus? You will then save on petrol and rent. Even better, do you have friends or family you can live with for free?

The other thing to do as others have suggested is get a second job. When I got in a mess a number of years ago, I had at one point 4 jobs - my main one and 3 others. It's not something you can do forever, and I was permanently knackered, but it got me back on my feet. If overtime isn't an option at work, then what can you do? Your username suggests you are some sort of IT guy? Freelance programming at home? If that isn't possible, then see what is out there. Even if you are pulling pints or something similar you could bring in an extra few hundred quid a month. With halving your rent this could give you a good sized chunk to throw at the debts.

LaLaLa34

Christ, what a life he’ll lead. A £100 a month for food! Are you joking?