Possible bankruptcy

jrck

Hi. Has anyone gone down the bankruptcy route and come out the other side?
A bit of a back story.....
We have been stupid with money so I’m aware it’s entirely our own fault. Spoiling the kids too much etc and living beyond our means then hubby lost a well paid job when I was pregnant with number 3 and the only job he could find was paid a quarter of what he was on before.
We have a mortgage with quite a bit of equity but cannot take any equity out yet because we’ve both not been long enough in our new jobs so the mortgage company won’t do anything. We have over £40k in debt win in includes credit cards, a loan from a few years ago and overdrafts. It’s all just one bit mess and month after month it’s just gets worse and worse. Our parents have and do help us a lot but there comes a point where they can no longer help us like they do and we’re quite frankly stuck in a massive hole.
I looked on step change last night and it suggests bankruptcy. I’m going to call my local CAB today but I’m really scared. Will we lose the house? I’m scared that if we lose the house and end up renting, it will cost us more to live (rents around here are crazy) and we’ll just end up in the same position again?
Does anyone have any words of advice?

MovingForwards

You potentially will lose the house with bankruptcy, especially having equity in it.

Have you considered a DMP or IVA?

Post up your statement of affairs and we can offer advice on the best way forward.

motivated

Hi jrck


I would suggest you head on over to the DMP thread. They are brilliant over there and will not judge. I was in over my head too and contacted SC. I was able to set up a DMP with them for a higher amount of debt.

https://forums.moneysavingexpert.com/discussion/5897083/dmp-mutual-support-thread-part-13&page=122

The link above will take you straight there and ask lots of questions

Good luck
M

sourcrates

Hi,

Bankrupcy should be a last resort for you, especially as you have a property to protect, there are other options for homeowners, such as a debt management plan, or an Individual voluntery arrangement, depends on the amount of disposable income you have as to which option is best.

jrck

Thanks for the replies.

Income is around £2400-£2500 (husband has a basic wage then commission, so varies each month)

Outgoings
Credit cards (4 cards) minimum repayments £750
Bank loan £260
Mortgage £751
Insurances (car and life) £150 (home insurance was gifted to us in a lump by my dad)
Petrol (2 cars) around £150+ (We both have old cars)
Groceries we aim for £60-£70 per week
Netflix/now tv £33
Gas/electric/broadband/mobile £166
Overdraft fees are costing us around £50-£60 per month
Council tax £173

Then there’s inevitably things like birthdays etc which I try to spend minimal amounts on

jrck

sourcrates wrote: »

Hi,

Bankrupcy should be a last resort for you, especially as you have a property to protect, there are other options for homeowners, such as a debt management plan, or an Individual voluntery arrangement, depends on the amount of disposable income you have as to which option is best.

I’ve posted my income/outgoings and there’s not any disposable income unfortunately.

jrck

MovingForwards wrote: »

You potentially will lose the house with bankruptcy, especially having equity in it.

Have you considered a DMP or IVA?

Post up your statement of affairs and we can offer advice on the best way forward.

I’ve popped it below

SusieT

jrck wrote: »

I’ve popped it below

You are missing a lot, try going back through the last few months of statements and filling this in calculator at the bottom click on format for MSE and copy it here. Ignoring thedebt payments you do appear to have a surplus, so a different option is looking better for you. From your post

Income is around £2400-£2500

Outgoings

Mortgage £751
Council tax £173
Insurances (car and life) £150
Home insurance was gifted to us in a lump by my dad - budget for this
Petrol (2 cars) around £150+ - where are the costs fot servicing, road tax, MOT?
Groceries we aim for £60-£70 per week - approx 280 a month
Gas/electric/broadband/mobile £166

Theoretically IF your costs were correct that would leave you around £730 a month for debt payments, so talk to Stepchange, but get a more accurate SOA done first


Netflix/now tv £33 you could get rid of this and go freeview

Credit cards (4 cards) minimum repayments £750
Bank loan £260
Overdraft fees are costing us around £50-£60 per month

Minkym00

If you have more than £10k equity you will lose the house. You’ll have a year’s grace but it will be sold unless a third party can buy out your interest. You need to get proper debt advice first. If it means waiting a few months to remortgage then do it.

You say “we” throughout your post. Which of you and your partner has debt? Both? How much each?

Post up your statement of affairs so we can get a clearer picture.

jrck

Minkym00 wrote: »

If you have more than £10k equity you will lose the house. You’ll have a year’s grace but it will be sold unless a third party can buy out your interest. You need to get proper debt advice first. If it means waiting a few months to remortgage then do it.

You say “we” throughout your post. Which of you and your partner has debt? Both? How much each?

Post up your statement of affairs so we can get a clearer picture.

It’s all joint and including credit cards, loans and over drafts it’s £42,000 and at the moment we’re barely paying minimum payments so not actually making a dent in it at all. According to estimated value we have around £60k equity.

MEM62

jrck wrote: »

According to estimated value we have around £60k equity.

Then BR isn't really an option for you.

Your equity in the house is greater than your debt and therefore you are not insolvent but if you go down the BR route and the OR sells your house, the additional fees/cost will wipe out any excess that may be left for you. If you sell and settle your debts there would at least be a surplus you could realise.

In reality, either of the above would be a disaster for you as the house would gone. You need a plan B. Firstly, post up a proper statement of affairs so that those with the expertise can give you feedback. Secondly, you need to look for ways to increase your income - perhaps evening or weekend work to supplement your current income. It may not be easy but you are, in effect, in a fight to keep your house and it's a flight you'll want to win.