Help needed, please!

ChrisPleaseHelp

Hi everyone,

Any help would be greatly appreciated.

I've rewritten this about 10 times to try and make it as concise as I can (and will probably edit it loads where I think I sound bad) but imagine it's probably still a long read, sorry!

Situation

I've got just over £45k in debt, going up every month - I don't think it's ever gone down for a significant period since I was 18 (I'm now almost 34).

I looked at Debt Remedy on StepChange and entered a budget that was tight compared to what I thought my spending was, and it recommended a DMP.

I used Money Dashboard to get my real expenditure over the last 3 months (the average of this real expenditure is my SoA below) and discovered my real expenditure is actually far worse than I thought, and even with major budget cuts a DMP would take a decade - Debt Remedy now suggests an IVA.

I'm enquiring with my work whether an IVA or bankruptcy is even allowed (I work in a law firm, but in IT so they're saying in theory it should be OK but are double checking) as I've now realised these may be my only options.

IVAs seem designed for those with assets which I don't really have, so I'm guessing bankruptcy would be the better option?

I've just been paid about £600 overtime for covering our year end, which I'd planned to use to pay back the payday loans - but I now realise could be used to pay the bankruptcy fee, one of the few times I'll have enough.

How did I get to this?

• I was diagnosed 18 months ago (after my work suggested seeking help - my friends have always just accepted my weirdness) with Asperger's with comorbid ADHD. I imagine I'd still have had debt anyway but it's definitely had a significant impact
• I've got a high income (£46.7k a year) but I don't think I've ever got enough of a raise to really put daylight between me and my debt payments and living costs - although at university I was a bit silly with money - I'd been a carer for my nan in childhood (who mostly raised me then passed just before I was 18) so didn't go out with friends much, so university was like a second childhood despite working part time
• I did talk to Gregory Pennington about a DMP about a year into my first full time job - but then a quick succession of pay rises and the incredible guilt and shame I feel around such matters stopped me
• My mum left her boyfriend of 20 years a year or two later (about 2010/2011) and I tried to support her but stay where I was, but eventually had to move into a house with her (we had to furnish it too as we didn't have much of our own) and eventually move my job home to Bristol too
• Since then my debt has continued to increase - there's been ups and downs such as getting a consolidation loan then my car blows up / fails its MOT badly or my dog gets ill in a way not covered by insurance (teeth)
• My income has increased in that time too, but debt has seriously eaten into those and outgoings have increased - my new workplace is more social (and expected to be) and I've been in a relationship (somehow!) for the last 4 years which means dates and helping with shopping a bit to feel less guilty about staying at theirs

Future worries that are spurring me to do something:

• My mum is now mid 50s and has degenerative osteoarthritis in her spine which is getting a bit worse each year - she has some insurances that may pay a little to help if she had to have the operation to remove spurs they've offered or had to stop working, but in all reality we'd have severely less income for 6 months or more
• I also want at some point to move in with my partner, or just go on holiday sometime - summer 2008 was my last one!
• I'd love to own a house at some point - even if just so I could let me mum live in it while I lived with my partner, so she didn't have to worry about rent in retirement given her pension isn't going to be great and we live in such an expensive city

What impact does Asperger's / ADHD have financially?

• My Asperger's makes me plan everything in advance (including unrealistic budgets) and often pay extra, for example to reserve seats. My ADHD can lead me to procrastinate, such as when needing to pay a bill or do something on time and cost me in terms of penalties etc.
• My ADHD can also make me struggle to stick to a budget if it all seems dull and hopeless (which it has many times). My Asperger's at least makes me fully investigate any major new purchases, but I struggle to not buy the best rather than the one I can afford (except in technology where I know enough to go second hand or cheaper). Giving up on purchasing something is difficult as I hate changing plans.
• I've got a limited diet as my heightened sense of smell and being able to taste even the slightest difference makes what I do or don't like very visceral. It makes shopping or going out a "what do I like" situation rather than "what's cheapest" - and worse it can go in phases, so buying in bulk when on offer might leave me with a lot of food I won't like again for another year!
• I dislike crowded spaces and chaotic or confrontational situations - I like order and rules (queueing at a bar is my nightmare!). If travelling alone, on trains I'd rather be stood up in the vestibule and on buses if they're busy I'd rather wait for the next one - which can be ages.
• I'm highly critical of myself, and I feel incredible guilt and shame over actions, such as if I re-evaluate a conversation by putting myself in their shoes (as I struggle to read emotions) think I might have said something bad. This extends to feeling shame over my debt and expenditure, and guilt for owing the companies.

My queries

I love rules and certainty - but debt solutions really don't have much! So I've got a few questions about bankruptcy, hoping people who know more can please help?

• Would an Official Receiver even allow bankruptcy? I've put a SoA below that's based on real expenditure for the last 3 months (which did include my partner and my brother's birthdays including birthday meals). While belt tightening could be done a little, I can't see a way to save enough to get out of debt any time soon
• Would an OR likely want an IPA for a long period? Again based on the SoA I guess they might but if it's legally enforced I'd need it to not be too long and too tight - else I'd likely have to borrow money to pay it at times when I'd either forgotten something in my budget or done something stupid
• What assets would the OR take? My games consoles both have a trade-in value of under £100, my phone is a 2 year old Sony that's almost out of contract and my PC I built's processor it turns out is an Intel demo one so isn't allowed to be sold and the rest of the components in total are likely under a hundred or two
• My car is valued at about £4000 or so on Parkers but was a Category D write off which apparently reduces the value by around 50% - and the boot is covered in mud and hair from the dog. I've kept the car serviced well though and deliberately bought it to be exempt from the congestion charge coming in to Bristol in the next year or so, and I'm worried about losing it because a cheap one would cost a fortune to bring up to scratch. Would my difficulties with public transport and the 3 to 5 hours it takes to use the bus to get to and from work be taken into consideration? It also allows me to visit my partner as the bus schedule isn't great.
• Would the OR send someone to my house? I don't really want my mum worried by it - I'm thinking of getting a device for the landline that only allows calls through that are in a preset list, and all the others have my mobile which I can screen. My mum is at the same bank as me and I'm pretty sure it would be a big data protection breach if they chased me through her, correct?
• How long does it take to go through, and do I need to appear in court or anything? How much do I need to go through my budget with them - it's a bit complex as often I might pay for something and then my mum, partner or friend pay me back or pay for something similar next time and I've got two bank accounts which money moves between to try and put direct debits from one and my spending through the other
• I've just opened a Nationwide FlexBasic account so I still have a bank account - this wouldn't accidentally be frozen too would it? Or would I need to apply for yet another basic account once bankruptcy starts?
• Would the OR take my Asperger's and ADHD into account?
• Would the OR take into account that I'm living with a parent and paying into that household, but also in a relationship with the costs that might entail?
• Would the OR want to take back presents I've given? For example my partner's computer parts at Christmas or my siblings' Amazon gift cards, or when I went overboard in April and spent about £400 in total on my partner (in particular, as they'd been feeling down) and brother's birthdays and attending their meals?
• How bad can the process get? In particular my over-developed sense of guilt has pushed me away from debt solutions in the past as I feel bad taking a company's money then not fully paying it back

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
(only one by me, other is my mum's)

Monthly Income Details
Monthly income after tax................ 2656
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2656

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1200
(This is actually a payment to my mum which covers rent, council tax, TV licence, water, pet expenses, contents insurance and household basic groceries)
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 59
Gas..................................... 59
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 10 (actually Netflix)
Mobile phone............................ 35 (contract ending soon)
TV Licence.............................. 0
Satellite/Cable TV...................... 23 (Sky 47 a month for TV, fibre and landline)
Internet Services....................... 24 (Sky 47 a month for TV, fibre and landline)
Groceries etc. ......................... 244
Clothing................................ 50
Petrol/diesel........................... 105 (commuting, dog walking, visiting friends, family and boyfriend)
Road tax................................ 2 (20 a year)
Car Insurance........................... 49 (usually pay annually, so guessing in case it goes up)
Car maintenance (including MOT)......... 44 (may not be needed, but some years can be £500ish)
Car parking............................. 120
(used JustPark to get just weekdays so got a good price for commuting space for where I live - bus can be an hour (supposedly) to 1.5/2 hours (reality, and only if it's quiet enough I don't decide to wait) each way compared to 15 to 30 minutes drive to this space near my boyfriend's and walk in from there - also use it when visiting him)
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 42
(will be arranging NHS prepaid prescription card for my asthma, but have to put money aside for a particular eczema lotion that is £26 a bottle and lasts 2 months but GP won't prescribe and my annual Asperger's / ADHD checkup that GP requires to continue giving the ADHD medication - despite an 18 month waiting list on the NHS, so have to pay to go private with the consultant BUPA originally paid for)
Pet insurance/vet bills................. 38
(my mum pays most things for our dog, but I sometimes pay for checkups or for her arthiritis painkillers)
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 16
(dental insurance that repays 100% of my NHS charges, which given my teeth due to an easily distracted teenager is worthwhile)
Presents (birthday, christmas etc)...... 125
(got 3 siblings, father, mother and partner and have to help mum with wider family at Christmas, so while I've managed to suggest lower value presents with my siblings passing it off as being because some of them also struggle with Christmas, I've not been able to trim as much as I'd like)
Haircuts................................ 26
(1.5 haircuts, to take into account it being 3 every 2 calendar months roughly)
Entertainment........................... 121
(Going out basically - mostly spend it going for lunch with partner or the odd night out or cinema)
Holiday................................. 0
Emergency fund.......................... 20
Work Lunches............................ 53
(Similar to entertainment, but these may be just a Greggs sausage roll or going out to a restaurant / fast food to be social with workmates - the Asperger's makes me socially awkward but the ADHD brings me out of my shell with people I know, so I try to be social particularly as it can be good for career)
Gym..................................... 25
(May be slightly more than a basic gym, but closest one to my workplace for lunchtime gym sessions to reduce likelihood of going out for food, and also has another location which has a steam room which is good for my eczema)
Total monthly expenses.................. 2490


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
(replaced a much older diesel that blew up - list price is 4000 but it's Cat D so AutoTrader seems to suggest about 50% write down in value due to this. I've been having it serviced properly, had remote central locking added and put the higher model's false boot floor in to allow me to take my elderly dog for walks in it so would hate to have to sell it and buy a £1000 car that would seem false economy as I'd likely get an immediate massive MOT bill and have it blow up a few years later)
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
First Direct Loan..............25424.....358.......9.99
Natwest Loan...................3666......122.......12.9
Natwest OD.....................2000......40........15.9
QuickQuid......................650.......650.......1300
Drafty.........................213.......13........87.9
First Direct Credit............1100......40........19.9
Marbles Credit Card............2100......65........29.9
Barclaycard....................3100......85........29.9
Halifax Credit Card............3200......52........3.9
HSBC Credit Card...............3500......90........29.9
First Direct OD................500.......3.........7.9
Total unsecured debts..........45453.....1518......-


Monthly Budget Summary
Total monthly income.................... 2,656
Expenses (including HP & secured debts). 2,490
Available for debt repayments........... 166
Monthly UNsecured debt repayments....... 1,518
Amount short for making debt repayments. -1,352

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -45,453
Net Assets.............................. -43,453

Created using the SOA calculator at (Can't post as I'm new)
Reproduced on Moneysavingexpert with permission, using other browser.

ChrisPleaseHelp

Ah I can't edit it so can't trim my ramblings or tidy up my whiny excuses in my SoA! :eek:

Clouds88

Hello,

Welcome to the forum

I would agree that bankruptcy would be the way forward for you rather than an IVa.

The only thing I will say is that the OR probably won’t allow the £120 presents and gym and ‘going out’ you sort of get an allowance for everything you pay and say like £30 for Sundries and £20 presents ect as you cannot service your debts so they want to try and pay something back to creditors.

I think, based on being single with a large income you would get an IPA which will last 3 years but it’s obviously better than having to pay the DMP for a decade! My family take home income when I went BR was 200 ish less to your sole income and I have two children and only just missed the IPA thing

ChrisPleaseHelp

Thanks - long time lurker but first time poster!

And thanks for the advice - and yes it's much preferable to a decade!

With the SoA being my real spending during a busy time of year I'm hopeful I'd be able to cut it down to what the OR requires - the presents were mostly specific items that had been requested so should be able to go back to cheap and cheerful vouchers

Were you allowed any small amount of funds for some of the annual costs? Just thinking a number of mine would come due in September or October and I'd be unlikely to pass a credit check to pay them monthly if I'm going bankrupt.

I'm aware I'll need to contact StepChange or the helpline before proceeding as need to show I've taken legal advice - guess it might be worth talking to Mind or legal advisors in work too.

Figuring out if it's 3 years IPA I'll need to take advice on if circumstances change - for example if I were to move out if my mum found a partner (thinking of positive changes rather than bad ones!).

Finally, are there any fees above the £680 or so it costs? I saw on another thread about thousands in OR fees but I guess that's a commercial one?

Thanks very much for your help!

Chris

JCS1

The £1,200 rent per month may also be queried. How does that compare to you renting a flat by yourself? It seems rather a high amount as board to a parent, especially as you also pay for other items.

The £121 entertainment may also be reduced. Gym is usually only allowed with a GP's note.

Groceries - included in the £1,200 to your mum, + £244 + £53 work lunches, not sure what the guidelines are for this at the moment.

I guess the issues is, if the OR adjusts some of the figures, how much you may be into an IPA for 3 years compared to a DMP and snowballing.

Your car - you would need to demonstrate it is a necessity. The value may also be an issue as the usual guideline is £1k. Anything significantly above that (assuming owned outright) the OR may take, sell, and give an allowance of £1k for a replacement.





. But yes, please speak to one of the free debt charities and go through your options.

ChrisPleaseHelp

Thanks for the replies - I've worked on trimming my SoA down from "actual" to "target"

I've taken further advice from StepChange, and on reflection there's too many variables with bankruptcy so I imagine it'll be the IVA route, particularly as my student loan will be cleared in 2 years so that would give a good increase to the payment.

I'm hopeful for the first time in ages!

Thanks,

Chris

JCS1

ChrisPleaseHelp wrote: »

Thanks for the replies - I've worked on trimming my SoA down from "actual" to "target"

I've taken further advice from StepChange, and on reflection there's too many variables with bankruptcy so I imagine it'll be the IVA route, particularly as my student loan will be cleared in 2 years so that would give a good increase to the payment.

I'm hopeful for the first time in ages!

Thanks,

Chris

It may be worth trying a DMP first, as an IVA is a more "formal" type of insolvency,


But good to hear you are feeling hopeful, making that first step is often the hardest.

ChrisPleaseHelp

Thanks

Yes I'm looking at both - the DMP will take a very long time but potentially be worthwhile if my employer doesn't like an IVA.

The IVA being more formal may work better for me - someone reviewing me annually and having rules to abide by, and after 16 years of my debts chasing me and a junk credit rating a finish line to aim for would be nice!

Thanks again,

Chris

MovingForwards

Chris, your employer may not be able to agree with your bankruptcy / IVA options due to their indemnity insurance. Some law firms just can't have staff with them or CCJs. I've just got declined for a back office role in a law firm due to my CCJ because one of their clients won't allow any member of the firm having one!

Some firms also send yearly emails to their staff asking them to declare whether they are bankrupt, in an IVA, have a CCJ etc.

Wishing you the best of luck and I hope your firm is one with a more lenient insurer

Clouds88

How old are the debts?
I’m not sure if this is frowned upon but if you can’t do IVA/bankruptcy You could always go down to token payments for 2 years or so and save the money in a savings account and offer full and finals in a few years depending on what you’ve saved? Some people have success this way, have a look 👀 on the debt free forum bit. Obviously you’ll be defaulted but if your credit rating is low anyway that shouldn’t matter. I don’t think they can give you a CCJ either as your paying something towards the debt? (But I couldn’t be wrong)

But obviously you’d have to be strict In saving money (or ask your mum to help you save) glad your looking through all your options though!