Confused by Step Change Advice recieved

Moneyworries81

As advised by CAB, Business Debt Line and my Creditors I made contact with Stepchange regarding my current financial situation.
As it stands my situation is quite complex but I am not totally convinced the advice I have received is the best for me long term, I have ended up feeling even more confused/ worried about my future.


I am currently insolvent with a budget deficit of £282 per month even before trying to make payments to creditors.


Due to prolonged domestic violence a joint business venture (Ltd company)and marriage have now failed. I lost not only my income but also my home. Currently rehoused in a 'safe house' with my 15 month old. My only income stream now is benefits based.


Personal Debt circa £21k
Business Debt circa £95k (unconfirmed as I was blocked out of the business)
I estimate that around £45k of the business debt is personally guarantored by myself (& ex husband)
At present I have no way of confirming the level of personally guarntored debt as I have no way of accessing many of the creditor accounts (complicated, being investigated) but the very minimum they will be are £32k.


At present I can not see any improvement in my situation occurring for quite some time. Dealing with severe mental health issues, no career path to follow now business failed, no available child care and trying to work through the legal process of closing down a ltd company that is insolvent with no assets whilst the joint director argues is! all of which make returning to work for me at the moment impossible.


I have spoken with my 3 personal debt creditors all of which have put temporary holds on the accounts whilst I make a plan, however, some of the business creditors are already using bailiffs (via old business premises).


I have no way at all of making any payments towards any debts and cant see that changing in the near future so I was fully expecting to be advised re Bankruptcy (terrifying for me but after reading on these forums feel it would at least give me some closure and mean I don't have countless sleepless nights waiting for the bailiffs to knock)


Stephcange threw a curve ball and said they would not advise Bankruptcy or an IVA , instead they only recommend a 12 month payment suspension.


This just feels so wrong for me! I can't see my situation drastically improving within 12 months , in fact my debt will more than likely have increased as more business creditors crawl out of the wood work. Surely all this option does is prolong the stress and worry of bailiffs etc. My debts will not decrease over this period and even if I do by some miracle get back to work in this time frame I will only be able to earn minimum wage.


I really think Bankruptcy is the better (not easier) option for me right now but please have I missed something . I am so confused and lost


I must say I was hugely disappointed with the step change advisor, I felt she was just reading through a script and if I tried to speak outside of that script I was just shut down. My individual creditors have been much more sympathetic and understanding of my personal situation … strange


Sorry for the long drawn out waffle but any advice gladly received as I am in such a mess

Minkym00

Do you own/co-own the former marital home? Are you likely to get anything in the divorce? If not, and you have no assets, I can’t see any reason why they would advise that over bankruptcy. Bankruptcy looks by far the best option. You’re position is not going to be improved by waiting a year!

Moneyworries81

Thanks for your reply
I have no assets at all due to me . I do own a car , which I believe may be at risk if I go down the bankruptcy route but that is literally all I have left of any of my material belongings .
Do the insolvency service / creditors look unfavourably if you go against advice from step change ?
I feel so stressed and just don't know eguch way to turn

Minkym00

Of course not! Plenty of people get no advice at all. I honestly can’t understand the advice you have been given, it seems nuts to me!

How much is the car worth?

Moneyworries81

Car is abiut £5k on parkers but in reality I suspect closer to £3.5k due to condition of body work etc . So yes I no the car will likely go but it is what it is. I'd rather that than a year of stress , worry & bailiffs just to find myself in the same situation this time next year, or worse .
It really makes no sense to me either.
I think I'll bite the bullet and look at completing the bankruptcy application. A family member is offering to help with fees so it's probably now or never really .
Thank you for giving me the confidence to follow my gut

WhenIam64

Do you suspect fraud was involved in any of the paperwork?

At present I have no way of confirming the level of personally guarntored debt as I have no way of accessing many of the creditor accounts (complicated, being investigated)

It may be that SC do believe in bankruptcy but may be waiting for the complicated issues to be investigated. Fraudulent debt is not written off.

fatbelly

You should receive written confirmation of advice from stepchange and this will explain why the obvious strategy (bankruptcy) is not recommended.

I'm struggling to see why not bankruptcy, like the others here.

Moneyworries81

Thanks again for your replies

WhenIam64 - Financial Fraud is not a concern. It is a complicated personal situation that is hampering my access to relevant information at present

FatBelly - I have reviewed the written information received from stepchange and they cited 2 reasons for not recommending bankruptcy
1) not enough money left after expenses
Surely that is what makes bankruptcy a better option for me? I had explained that a family member was willing to help with the fee. I gave a true picture of current spending for my SOA, however, I do appreciate that I will have to make significant cut backs …. I can't spend what I don't have and expect my monthly income and expenditure to Zero itself at the end of each month.

2) Joint debts with an ex partner that has not been notified I am taking debt advice
This one seems even odder to me. Any joint debts come from the jointly guaranteed business debts. I am not in contact with Ex on the advice of the police and domestic abuse charities. I am not actively withholding information from him I just am non contact. Does this really mean that I shouldn't consider bankruptcy just because I have been subject to years of mental / financial /physical abuse? I really do think the advisor I spoke with missed the point totally with my situation.

I am leaning more and more towards filing for bankruptcy, especially as written info form step change even states that creditors may not stop interest or charges being added to my debts. I am however, open to any other suggestions if people think there may be a different solution

fatbelly

(1) and (2) are not reasons not to go bankrupt.

Sometimes I wonder what is going on at stepchange and wider in the debt advice world.

What might be an issue for you is the public register. Are you OK to go on that with your domestic abuse issues?

You can withhold your address - but it's a court process

https://www.gov.uk/government/publications/rule-205-bankruptcy-application-for-an-order-for-non-disclosure-of-current-address

Moneyworries81

Fatbelly, thank you so much for the link. a PARV order was mentioned by the Business Debtline (who incidently have recommended Bankruptcy) when I asked stepchange about it they just brushed it off, so this information has been very useful. Lots more to think about now

WhenIam64

Sometimes I wonder what is going on at stepchange and wider in the debt advice world.

You should receive written confirmation of advice from stepchange and this will explain why the obvious strategy (bankruptcy) is not recommended.

Have you had the SC letter yet?