what to do best?

Kimberly106

For more than a year I have been doing an arranged payment with my creditors although it helps eases my financial situation but then in the long run I still owe these creditors with interests piling up. I owed £15,000 from 5 creditors. I had an advice from one agency saying I should go for bankruptcy and not qualified for DRO because I still have £200 left from my salary taken off all my expenses. But I honestly dont have that money left in my account every month because i have other expenses he didnt include in his calculations. He said it is not realistic if the creditors check it but that is genuinely all my expenses.
So my questions are:
1) aside from payplan and stepchange, is there any agency I can go to?
2) how bad is it if I will apply for Bankruptcy? Because it feels overwhelming to go for this option?
3) what are the risks for filing a bankruptcy aside from getting bad credit record and will affect my employment and tenancy agreement?
4) i am currently on furlough but im not too confident if i will be made redundant as the company i work for is planning to do that, what option should i go for if this happened?
5) by the way, i am paying my monthly agreed amount to third parties which I think already bought my debts (NCO, Wescot, PRAgroup). Will this qualify me for DRO? What are the pros and cons for this case?

Thank you very, very much in advance whoever answers patiently all my questions. 

fatbelly

Kimberly106 said:

So my questions are:
1) aside from payplan and stepchange, is there any agency I can go to?
2) how bad is it if I will apply for Bankruptcy? Because it feels overwhelming to go for this option?
3) what are the risks for filing a bankruptcy aside from getting bad credit record and will affect my employment and tenancy agreement?
4) i am currently on furlough but im not too confident if i will be made redundant as the company i work for is planning to do that, what option should i go for if this happened?
5) by the way, i am paying my monthly agreed amount to third parties which I think already bought my debts (NCO, Wescot, PRAgroup). Will this qualify me for DRO? What are the pros and cons for this case?

Thank you very, very much in advance whoever answers patiently all my questions. 

1.If you look at the government factsheet, there are a dozen or so 'Competent Authorities' The major one you haven't mentioned is Citizens Advice.
https://www.gov.uk/government/publications/getting-a-debt-relief-order
2.It's not bad to go for bankruptcy and there are some advantages over a DRO. The main drawback is the £680 upfront fee.
3.Any form of insolvency will give you a  bad credit record and will potentially affect your employment and tenancy agreement, depending on what is in your contracts (most people have no issues with either). If this is a problem for you, you need to look carefully at your options.
4.Impossible to say. If you're going to get a lump sum, bear in  mind the asset criteria for a DRO.
5. If you'r going insolvent, stop this.Those payments are not allowable expenses in a DRO

mwarby

Re point 3 - how it affects your tenancy would depend on your relationship with your landlord. If you always pay on time and keep place nice, the landlord would be unlikely to do anything. If your often late or are behind with rent or landlord isn’t happy for other reasons, it could be the straw which breaks the camels back.

Insolvency  can make moving difficult, as if a new landlord does a credit check (my last 2 did) you will come back as a fail unless you provide a guarantor . Now it’s up to the landlord what to do, some won’t be bothered, some will want nothing further to do with you. A lot will depend on the supply/demand of housing locally (ie how picky can landlord afford to be)

Not many occupations are concerned with bankruptcy, the main ones which would be are finance, legal, police, anything where you are security cleared and company directors. I think there is flexibility in many of those too

Re point 4, if your bankrupt when you get the lump sum, you’d need to inform your OR who would work out what you can keep and what needs to go into the bankruptcy. 

MalMonroe

Is there any reason that you can't contact one of the debt agencies such as StepChange? They can and do give excellent advice. I don't think continuing to make arranged payments with your creditors for any length of time is a great idea. That's something you would normally do while you are trying to sort things out in a more permanent way. I'd phone one of those agencies without any further delay because they have all the information that you need. And if you work in conjunction with one of the recognised agencies, financial establishments are more likely to comply with requests. One free phone call. It's worth it. I was helped so much by StepChange (they advised a DRO years ago and now I'm free and clear) and once they have your details, they do all the hard work so you don't have to. 

Kimberly106

I have contacted Stepchange before and I was overwhelmed by how the agent handled the conversation and “advice”. My other expenses such as food allowance at work, dental check up, social / medical expenses, weren’t considered to add on my expenditures. And the guy kept saying my only option was to go for IVA. So I contacted Payplan instead and the agent was way approachable than Stepchange. 

fatbelly

We have had a lot of cases where people thought  they were talking to stepchange but were talking to an IVA-pusher, having been duped by 'steps2change' or something like that. It's unlikely that stepchange would only tell you about one option (which if  you're not a homeowner, have 15k debt and low surplus income is certainly not appropriate).

Having said that, I also prefer Payplan and have found them easier to deal with

As for those other expenses such as food allowance at work, dental check up, social / medical expenses, I don't see why they would not be allowed, unless you are spending above the trigger figure on food, or your social expenses are something unreasonable.

sourcrates

I can tell you now stepchange would not have recomended an IVA with only 15k of debt, common sense alone dictates thats a bad idea for those in the know.

When you Google stepchange, their site is not the top hit, iv`e just got "steptochange" who are an IVA lead generator, "stepwithchange" again, an IVA lead generator, "stopchange" again sells IVA`s, you have to be vigilant.

The real stepchange site is "www.stepchange.org" anything else is an imposter.