Going Bankrupt - 26 & Scared

Hannah232

Hi,

This is my first ever post, I hope someone may be able to offer some advice.
I am trying to get as much infomation//advice as possible before filing for bankruptcy. I have spoken to StepChange and Citizens Advice and I think I should file for bankruptcy. I am still very scared but I think I am making the right choice.

I am 26 years old and due to past circumstances I now find myself in £16,500 debt, this does not include my car finance which is £230 a month and I am only 1 year and 9 months into my 4 year agreement. I have spoken to my finance company and they said that they will most likely take the car away. This is hard to come to terms with but I am slowly accepting this may be my fate.

I am unsure whether an IPA will be set up or not and just want to prepare for my life after filing for BR. In my expenditure at the moment I have included the £230 for my finance, if however the car is taken away I understand that the I will then be +£230. Will the examiner allow me to replace this with a train ticket and savings for a car?

For instance a train would cost be about £100 a month but then I still need a car for work at some point so how much would I be allowed to save or would they take it all for IPA?

I have tried looking on calculators but every answer is so different, how much am I allowed to save for holidays, gifts, savings (cars or emergencies), dentist, clothing etc.?

I am trying to be logical but some of the allowances seem quite low and I am trying to balance what is acceptable with what I actually need.

I am lucky as I live with my parents ( because I currently cannot afford to move out) but I want to be independent and save and move out.

Some of debt was due to me trying to help a friend which then meant my debt snowballed, I am not trying to make excuses at all but I am worried that I will go BR and then still suffer immensely afterwards, leaving me no car, no money to save for a car and living with my parents forever ( it's fine to live with parents and I am very grateful but I have no partner to support me so really need to find away to eventually have my own life).

I hope this makes sense and even if this post reaches 1 person who might be able to help the it's worth it.

Thank you for reading.

Willing2Learn

Hi Hannah and welcome to the forum

£16,500 is not a lot of debt. Why do you thing bankruptcy is the best option moving forward?


For best advice, support and guidance, I recommend you complete a Statement of Affairs (SOA) using the online form. Remember to click on the 'format for MSE' button near the bottom of the form, then paste it up into this thread.

suki1964

Willing2Learn wrote: »

Hi Hannah and welcome to the forum

£16,500 is not a lot of debt. Why do you thing bankruptcy is the best option moving forward?


For best advice, support and guidance, I recommend you complete a Statement of Affairs (SOA) using the online form. Remember to click on the 'format for MSE' button near the bottom of the form, then paste it up into this thread.

I was wondering the same. Its not a lot of debt at all and aged 26 and living with parents it would be sensible to bite the bullet, cut back on everything for this year and throw every penny at it and get it clear

I certainly wouldn't be wanting to be a bankrupt at such an early age when trying to move to independent living

Hannah232

Hi Both,

Thank you for the replies. I thought about going bankrupt a year ago but decided to put my all into it but then life comes around and then a year later you realise your in the same, if not a worse position.

My income is £1,400 a month and with all my expenses I actually have no money left to pay towards my credit cards ( 5 included)

I pay towards:
Rent
Food, including breakfast, lunch, dinner
Car Finance
Petrol which is a lot due to having to travel 40 minutes to work and back every day
Car service which has just cost me £400
Car Tax and Insurance
Gym ( tied into contract)
Phone ( tied into contract)
Toiletries
Prescription
Dentist
Gifts, friends are getting married, having babies and I have my families birthdays and Christmas ( I have tried to cut back on gifts but when your all your best friends are getting married I try to put something in their cards) I also declined a hen holiday due to finances but there is always something else.
Holiday?
Clothes/footwear? I have to look smart for my job and I need winter clothes like coats and boots

I understand I am young and I am fortunate to live at home but I do however live independently at home and put quite a lot into rent to support my mum and dad which includes bills and water so I can't complain.
I still however find I am struggling and they said at this rate it will take me about 7 years if I can manage to pay off around £200 towards my debtors, however I do not have £200 no matter what I try to cut back on something always comes up, for instance a recent car service that cost £400 and my windscreen which I need to fix is £75.

I do get that gifts and holidays are not seen as necessary but I am trying to cut down where I can but I just don't have enough income to make a dent in my debt and I am now getting interest on some of my cards. I feel like I am drowning and I am very stressed.

I am trying as much as I can.

Willing2Learn

We need to see your SOA (I provided a link for the online form in my previous post).

If you were to give the car back and get a cheap runabout (worth less than £1,000), then that could be a part of the solution. It could be that a DRO (Debt Relief Order) or DMP (Debt Management Plan) would work better for you.

Hannah232

Income -1,400

Monthly Outgoings
Car Finance £230
Car Insurance £38
Car Tax £12
Petrol £260 £65 a week
Maintenance for car £70 ( I put £70 because of the £400 car service and £75 windscreen and also oils etc.)
Rent to parents £400
Food £230 Includes meals at work, however I make bulk meals where I can(I pay for all my food and will continue)
Toiletries £25 (I buy my own makeup, shampoo conditioner, body wash, I put towards toilet rolls and cleaning products)
Hairdressing £15 ( I need to keep a professional image for work) this is for 4 haircuts a year and box dye for my hair not professional colour).
Dental £10
Perscriptions £10
Clothes/Footwear £40
Phone £47 (tied into contract)

Luxuries/living
Socialising £30
Gifts £40 (Christmas, birthday, weddings, christenings, etc.)
Gym £34 (tied into contract
Holidays £20
Vape £20
Savings for emergencies £100

Sorry if messy, I have copied from my own spreadsheet.

I have put £100 for emergencies because if I go BR I will need to have money spare to save for a car as I will need one for work. That will still take me a very long time to save for a car though.

I find I am spending on my credit card to get through the month, therefore it just keeps snowballing.

Believe me when I say I have tried everything.
I have worked two jobs but got so stressed because I was working my normal part time job plus staying late and then working weekends at my second job and some evenings, I stopped because I felt so tired and it was effecting my normal job.

SweetPotatoPie

Do your parents know about your debt? 400 pound per month seems ridiculously high for living with parents? X

JennyJukes

£230 is a lot for grocery shopping for one person. How much are you spending on food at work and why do you need to do this? Are you able to shop at Aldi and cut your meals at work down to one day a week for example? This could reduce your budget to at least £150. There are many people on here who limit themselves to £100 per month and some even less.

With that, changing contracts when they're done to lower amounts, plus the £100 you're currently putting into savings, this could help towards your debt?

I agree, is the £400 rent negotiable with your parents?

Grumpelstiltskin

When does your Gym contract end?

When does your phone contract end?

Do you get any work expenses to help cover petrol costs?

Don't you think spending on Vaping and going to a gym are a bit counter productive?

Food spends are way over the top you need to seriously rein that in.

Willing2Learn

Sorry to be pain in the buttocks, but you really need to complete the SOA in its entirety, to see the full picture with accuracy....Your partial SOA indicates that you have no money for what you have called luxuries/living, or to repay your card debt.

I agree with the others. You are essentially renting a room and £400 is way too high for this (I rent a two bedroom flat for near enough the same money). Your combined groceries and toiletries are also unaffordable (too high)

Hannah232

Of course will do that now.

To answer everyones questions.

1. Yes the rent seems high but for a 26 year old who is also trying to support her parents through a hard time, considering this includes water, electric, internet, and roof over my head, a garden and a parking space compared to if found a one bedroom shared house which would probably cost £500-550 with no parking space and most likely no garden, and sharing with other people I don't really see an issue in this.
2. Food - I batch cook a lot but I have to eat mainly gluten and dairy free food which is more expensive sometimes, even the basics can be at a higher cost that is why I do spend a little more but I am trying hard to source the cheapest staples online
3. My phone contract still has another year to go
4. My gym contract has another 6 months to go ( I have just got this reduced from £38 to £34 through a work discount)
5. Petrol is expensive because I drive to get to my job and back, petrol is not something that work covers, I travel that far because I live in a very small town with hardly any jobs
6. I can take the criticism for vaping but I think the comment about the gym is unnecessary, I do not think concentrating on my health is counter productive when advised to do so by the doctor to join a gym last year and to work on dealing with my stress, plus I already stated that I was tied into a contract so I don't feel like the comment was needed.

I posted to get the best advice before filing for BR, I have tried dealing with this for a number of years and I have always made my payments on time but I now do not see a light at the end of the tunnel.
This really is my last resort and I am looking for helpful advice as to how to manage the process best I can and appreciate help so far.