Going Bankrupt - 26 & Scared

Grumpelstiltskin

Hannah please explain how you are going to manage when you don't have a car.

I have to agree that if you are travelling from one place to another for work you should be receiving mileage.

Hannah232

I don't know...

My question is, if I carry on living how I am living then I have to continue paying £230 to my car finance plus all the other parts, for example I have been paying my last car service off in installments for the last 4 months, plus I have a massive crack on my windscreen due to a stone hitting my window, I think the cold weather may have made it worse, this is another £75 which I just can't afford.

If I go BR due to my car being HP/PCP will the car company take my car away?

If so would the OR allow me a budget for train expenses and a emergency/savings ( not massive ) every month so I can save for another car ( max £1,000) so I can at least tell my employer I will have car ASAP.

Am I being totally crazy here?

Grumpelstiltskin

Hannah232 wrote: »

I don't know...

My question is, if I carry on living how I am living then I have to continue paying £230 to my car finance plus all the other parts, for example I have been paying my last car service off in installments for the last 4 months, plus I have a massive crack on my windscreen due to a stone hitting my window, I think the cold weather may have made it worse, this is another £75 which I just can't afford.

If I go BR due to my car being HP/PCP will the car company take my car away?

If so would the OR allow me a budget for train expenses and a emergency/savings ( not massive ) every month so I can save for another car ( max £1,000) so I can at least tell my employer I will have car ASAP.

Am I being totally crazy here?

Hannah yes you are being crazy.

The OR will allow your train fares but the amount you are allowed for an emergency fund isn't going to allow you to get another car ASAP, it will take you a minimum of 12 months even if you cut back on all your other expenses and save every penny.

[Deleted User]

Willing2Learn wrote: »

With regard to your car, I **think** you have the option to end your contract one of two ways:
Voluntary Termination of the contract,
or
Voluntary Surrender of the contract

There's quite an important difference between the two options. Once you have paid 50% of the total amount payable across the total duration of your contract, including interest and fees you are allowed Voluntarily Terminate your HP or PCP deal, hand the car back and that's you done.

With Voluntarily Surrender you hand the car back but you're still on the hook for the finance. The car will be sold and you will be liable for any shortfall. That's why it's very important to use the correct terminology when dealing with the finance company.

Hannah232

I am not requesting that I have a car ASAP but if I can explain to the OR that I am wiling to train for a few months but I do need a car for work surely they would allow me to keep money aside to save for car if it is vital for work? Or does it not work like that?

I have written to the finance company to clarify further. I have checked and including all interest, fees and cost of the actual car itself I would be half way in about 12 months time....
Which is why I am in a bit of a mess
Thanks for the info

Sorry guys, I am not trying to cheat the system or get an easy way out, just trying to plan for best case scenario here whilst keeping my job and being able to still get around

Jonathan_Kelvin

Hannah232 wrote: »

I don't know...

My question is, if I carry on living how I am living then I have to continue paying £230 to my car finance plus all the other parts, for example I have been paying my last car service off in installments for the last 4 months, plus I have a massive crack on my windscreen due to a stone hitting my window, I think the cold weather may have made it worse, this is another £75 which I just can't afford.

If I go BR due to my car being HP/PCP will the car company take my car away?

If so would the OR allow me a budget for train expenses and a emergency/savings ( not massive ) every month so I can save for another car ( max £1,000) so I can at least tell my employer I will have car ASAP.

Am I being totally crazy here?

No, you would not be allowed to accrue savings, certainly not at the level to get a car. Your car will be gone, and everything spare will go to those to whom you owe money.

Bankruptcy, despite what some on here like to claim, can be a life-changing experience. It will rule you out of some jobs for the rest of your life, and will have a huge effect on how you live in the short term.

People are not warning you off it to be difficult, or to catch you out, but because you seem not to realise what a drastic step it would be.

Hannah232

I am not disputing the fact that bankruptcy will be life changing, trust me I have had lots of sleepless nights worrying about my debt and what it could be like if I file for BR.

I feel like I am in a lose, lose situation.

1. If I do not file for BR then I keep my car but cannot afford my car at the moment and all my other expenses until I am out of contract and it still doesn't give me enough to pay creditors and especially not enough to ever make a dent which means I will be in debt for about 8 years.

2. If I do file for BR the likelihood of losing my car is about 90% even after I explain to the OR I need it for work purposes, therefore an IPA will be introduced and I will end up with no car and paying more IPA.

Seems like both roads seem long and dark. I am not expecting anyone to feel sorry for me but a lot of my debt was due to me helping out my ex so I can't help feel a little bitter about the whole thing. My debt then snowballed and here I am on new years day regretting a lot

[Deleted User]

Hannah232 wrote: »

I am not requesting that I have a car ASAP but if I can explain to the OR that I am wiling to train for a few months but I do need a car for work surely they would allow me to keep money aside to save for car if it is vital for work? Or does it not work like that?

I have written to the finance company to clarify further. I have checked and including all interest, fees and cost of the actual car itself I would be half way in about 12 months time....
Which is why I am in a bit of a mess
Thanks for the info

Sorry guys, I am not trying to cheat the system or get an easy way out, just trying to plan for best case scenario here whilst keeping my job and being able to still get around

Did you purchase the car using HP or PCP? There's a significant difference between the two.

I entered your SOA into Step Change's Debt Remedy Tool and with your current level of spending you cannot afford your current cost of living and you have no surplus income to offer your secured creditors meaning that until you address this there isn't a debt solution that will work for you. Step Change recommended trying to trim down:

• Food, toiletries and cleaning - reduce to £222
• Clothing - reduce to £34
• Medicines - reduce to £11
• Fuel and Parking - reduce to £200
• Car Maintenance - reduce to £33
• Emergency Fund - this was a big drop as SC recommend just £15 instead of your £100
• Entertainment - reduce to £40

Even once you cut those down, Step Change still didn't recommend bankruptcy as the most suitable option for you.

You can still keep a vehicle when you go bankrupt if the OR agrees a car is a necessity. In England and Wales if your vehicle is worth more than £1,500 the OR will normally allow you £1,000 to buy a replacement.

As your car has been purchased on finance the OR might allow you to continue making the payments if it is essential for you to have a car. If public transport is a viable alternative then the car will go. If the finance agreement ends before you are discharged from bankruptcy then the vehicle will pass to the OR, not you, and the OR can sell it or allow you to keep it depending on the value so if at the end of all your payments it's worth more than £1,500 it's going to be sold.

onwards&upwards

Hannah I know you don’t want to do this but I think you need to sit down with your parents and tell them your situation.

You want to help them by paying £400 because you love them, well they love you too and they might want to be given the opportunity to help you by reducing your rent just for 12 months until you are at the point where you are out of contracts and can hand the car back and are in a better position to tackle your finances.

If I found out that somebody I loved was thinking of going bankrupt and I could have avoided it for them, I would be very sad that they hadn’t even given me the option of helping. It’s a new year, start with an open honest conversation with your cards on the table.

Jonathan_Kelvin

Hannah232 wrote: »

I am not disputing the fact that bankruptcy will be life changing, trust me I have had lots of sleepless nights worrying about my debt and what it could be like if I file for BR.

I feel like I am in a lose, lose situation.

1. If I do not file for BR then I keep my car but cannot afford my car at the moment and all my other expenses until I am out of contract and it still doesn't give me enough to pay creditors and especially not enough to ever make a dent which means I will be in debt for about 8 years.

2. If I do file for BR the likelihood of losing my car is about 90% even after I explain to the OR I need it for work purposes, therefore an IPA will be introduced and I will end up with no car and paying more IPA.

Seems like both roads seem long and dark. I am not expecting anyone to feel sorry for me but a lot of my debt was due to me helping out my ex so I can't help feel a little bitter about the whole thing. My debt then snowballed and here I am on new years day regretting a lot

Yes, you have spent money that you have not yet earned, you have borrowed from your future self. Life was easy when as well as your whole wage you were also spending other people’s money, and now that you not only have to drop back to spending only what you earn, but also have to repay, then it is going to be hard.

You are writing as though there must be an easy way forward from here, but there isn’t, each choice is going to mean a far worse life for the next decade than you have had in the last one.

This is why people were suggesting that you need to earn more money, or spend less. As you will not, I honestly believe that you are going to face a very bleak few years.