Going Bankrupt - 26 & Scared

girlatplay

Go and have a look at the Debt Free Wannabe board. There are a lot of people on DMPs and there is a lot of great advice flying around.

(Confession: I'm not normally on this part of the forum, I'm usually only in DFW or Old Style. Fat finger clicked on this thread by mistake).

Jonathan_Kelvin

Hannah232 wrote: »

Just to add, I feel like I am really being honest here and appreciate everyones posts.

I am sorry if I come across angry or rude I am just finding this all quite a lot to take in but I need to hear it.

You’re not coming across as rude at all, quite the opposite, you’re being really polite and taking posts in the spirit in which they are made.

It’s hard, as you will have already been making the savings that you thought you could, and will now only be spending on what you think are needs or “reasonable” wants, and you now have people telling you that you are a bit wrong, and need to think again.

phillw

Hannah232 wrote: »

Phone £47 (tied into contract)

Who with? What do you get for that? Have you asked if there is any way to reduce your payments?

A friend managed to talk their mobile phone provider (and Sky TV) to drop their payments mid contract.

Once you get used to living off fresh air then you will wonder why you ever needed a luxury lifestyle.

sourcrates

Hi,

Including the car, your debt is in the range of 27k.
Your spending £246 a month more than you have coming in, so that SOA cannot be accurate, unless as I suspect, your using credit to live on.

Your debt is not in debt management territory, you have no disposable income to make any offers of payment with, if it wasn’t for the car, I would have said a DRO would work for you, but the car is way too over valued for you to qualify.

The car is one of the sticking points, you cannot afford it, not with your high “stay at home rent commitment”, even taking away the 17k of unsecured debt you have, you are still £246 a month in the red, so with bankruptcy you would lose the car, and still only just break even.

Somehow you have to lose between £200 and £400 from your budget commitments, as you cannot afford them, only then will any debt solution work for you, at the moment your in limbo because you spend too much.

If you want things to change, it’s time to cut costs to the bone, if you can’t or are unwilling to do that, then your options are exhausted, as long as you have such a large monthly deficit in your budget, nothing will work for you I’m afraid.

yksi

Sometimes other people have perspectives that we never even consider - just because they have fresh eyes.

This is not a criticism, but an observation - do you realise that if you were to find a minimum wage supermarket job locally so that you didn't need to drive to work, you would be financially better off?

I do understand that nobody wants to compromise their career and that's completely up to you. It's just that so often, we all make choices and we're completely unaware that we are making them. It is worth asking ourselves why we make certain sacrifices.

In your case you're more willing to go bankrupt than to ask your parents for help and reduce your rent. Think about that. It's madness. Bankruptcy is a huge thing! Would they want you to choose that without even discussing it with them? It is your choice and I can see you won't negotiate that idea, but I encourage you to think about it to yourself. To question, to argue, accept "nothing" is a given and nothing is non-negotiable.

I suspect that part of the reason for the huge grocery bill is that you're buying ready choices (salads? lunch meals?) due to the fact that you work and commute long hours. You're tired, it's understandable. I appreciate the difficulties of a restrictive diet, but if your average Joe can live on £20 food a week, then someone needing "free from" can manage on $40 a week. It's either a choice to spend more, or something that's done in exhaustion / lack of willpower because work and debt is just killing you. Is all that stress worth it? It might be another ten years before you get the payrise and promotion that you deserve.

Look at the bigger picture. Your job is costing you £6,000 a year in travel expenses alone, plus another £1,200 in meals. Plus your spending on your wardrobe to look the part. Take that conservative £8,000 a year into account and you are actually working full time for something like £13,000. That's less than minimum wage. Suddenly the supermarket job looks better, doesn't it?

Not trying to tell you what to do at all, just suggesting you question everything. Every spend and decision that you think is necessary, ask why you need it, do you need it, is there another way? And what do you gain from it?

Bankruptcy might seem like your only option but your entire lifestyle is unsustainable even if you go down that path. Something needs to change, with or without it you need to do something about that job commute.

warby68

The thread is long now OP and, if you don't mind me saying, you still seem to be struggling quite a bit with the idea that both what you spend and still want to spend are not sustainable in the long run, even if your debt is wiped.

Would a summary help?

This is the crux

Your income is £1487 - this is at the low end

You spend £1245 on rent, food and travel - go and look at some other SoAs on the Debt Free board and you will see how how high these are as a proportion of income.

That leaves £242 pm for absolutely everything else. This is not realistic, as you are finding, even if all your unsecured debt were to disappear.

So you have to tackle either income OR your main expenses in a more transformational way.

If you HAVE to have a car for your job you should have some expenses. If not why not? A mileage or car allowance could make all the difference.

If you are doing extra in your job by choice without recompense, maybe you should postpone this until you are better placed financially.

A minimum wage job without travel would make MUCH you better off - that shouldn't really be the case other than for brief transitional periods.

Good luck OP - take your time and really think about your current non-negotiables (job,rent,car). They are close to breaking you and are making debt remedies unworkable.

cymruchris

As has been pointed out - but not sure you've taken it on board - if you choose bankruptcy - then your parents will not be getting that £400 contribution a month anymore. Have you actually spoken to them about bankruptcy - and what it means - not just for you, but them as well? Are they aware that you won't have the £400 a month to give them any more? Are you aware that for the immediate year ahead you won't have a credit card, and then after that you'll only get cards with relatively low limits and ginormous interest rates for a while? (Credit limits of around £250 for example). Are you aware that if you wanted to go rent a flat somewhere, they'd do a credit check, and with a bankruptcy on file, they might say sorry - no - can't have you - or alternatively they might say yes if you pay a years rental in advance. Mortgages will be incredibly difficult to get in the early stages of your bankruptcy journey - and even after several years the interest rates you pay won't be the same as the high street lenders offer the majority of people. For those with BIG debts - bankruptcy can be the answer - but with effort yours are manageable if only you're able to take some steps to reduce your outgoings. The bankruptcy is the biggest black mark you can get on a credit file - so if the car is the biggest sticking point - you need to focus on your options there. Have you read your contract in detail - to see what happens if you need to hand the car back? Bankruptcy should always be the last option - once you've tried everything else. You're already in an emergency - you don't need an emergency fund. Putting money to one side while you are paying interest on debt is not a good idea. Put everything you can into the debt to minimise the interest you're paying. Suspend all the present giving for the moment - just give good wishes in a card. If people value you as a friend - they won't need presents. Cancel the gym at the earliest opportunity - reduce the phone contract again at the earliest opportunity. Speak to your parents about dropping your contribution for a few months while you get yourself back on your feet. Do you think they want you to go bankrupt with all the headaches it'll bring? I respect that you want to contribute and support them - but you have to get these debts down - and that won't happen easily while you're still adamant on giving them the full amount each month.

onwards&upwards

Hi Hannah,

Sort this is a bit of a personal question but would you be prepared to tell us who diagnosed your allergies to gluten and dairy and how? I only ask because there are a lot of people out there avoiding foods unnecessarily, and if you are one of them you could save a bit of money off your food bill quite easily.

Bexta140790

Hi Hannah,

You really need to reduce your income. Your shopping bill is ridiculous, I do a months shopping for a family of 5, with pets, one child still in nappies and often making more than one meal at a time as I have two children that are fussy or have additional dietary requirements for not much more than you are spending now!

Also surely your parents would rather you cut what you are paying them for a while rather than you having to go bankrupt and then getting nothing.

Even with dietary requirements you could easily cut your monthly spend on food down to £100, and that’s still being very generous. You need to meal plan and shop around. Talk to your parents about cutting what you pay to them in half at least.
Just by cutting the food and what you pay your parents you could save over £300 a month.
Read your car finance agreement or call and ask them what would happen if you returned the car early, or ask about reducing the monthly payments (we have had to do this previously), you will probably find they are really helpful when you tell them you are struggling.

You should also be getting expenses if you are having to use your car to work.

Have you thought about doing some work from home if you have any skills that enable you to? I’d also look into getting bar work, it’s very enjoyable and super social too.

Willing2Learn

Hello again Hannah :hello:

The following suggestion is beyond my knowledge, so I am making it so that you can do the research yourself. (Maybe other members can comment too)

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