Nervous and need help on where to start with £25k debt

fatbelly

It'd be cheaper for them to give you £680 and go bankrupt.

If they lend you money, they become a creditor so you don't get below the 20k threshold for a DRO

Now some of us are lobbying for a change in the 20k threshold but don't hold your breath on that. Even if the government agree to it it will be delayed for a long time. They only act fast when it suits them

Laura721

What are the negative consequences of me paying the fee and going bankrupt? Surely I will never be able to buy a house or do anything like that? Compared to other options. Thank you

fatbelly

The record stays on your credit file for six years, as it does with DRO and IVA.
With a debt management plan, the defaults stay for six years.
I don't think there's a lot of difference in practice

RAS

Laura721 said:

What are the negative consequences of me paying the fee and going bankrupt? Surely I will never be able to buy a house or do anything like that? Compared to other options. Thank you

Providing you follow up bankruptcy by managing your current income effectively, you'll be able to buy a house at some stage in the future.

It might be several years down the line but providers will be more concerned by frequent recent small missed payments than a bankruptcy 5-6 years ago. 

It'll take time to get any credit, so it's important to save an emergency fund as soon as possible after bankruptcy. 

Laura721

RAS said:

Laura721 said:

What are the negative consequences of me paying the fee and going bankrupt? Surely I will never be able to buy a house or do anything like that? Compared to other options. Thank you

Providing you follow up bankruptcy by managing your current income effectively, you'll be able to buy a house at some stage in the future.

It might be several years down the line but providers will be more concerned by frequent recent small missed payments than a bankruptcy 5-6 years ago. 

It'll take time to get any credit, so it's important to save an emergency fund as soon as possible after bankruptcy. 

Forgive me for my ignorance but when you say save an emergency fund what do you mean? In your opinion reading my brief information would you also suggest bankruptcy?

Laura721

fatbelly said:

The record stays on your credit file for six years, as it does with DRO and IVA.
With a debt management plan, the defaults stay for six years.
I don't think there's a lot of difference in practice

Thank you! 

So the defaults will be 3 years old now but I’ve not been able to pay any of this off since then. Is bankruptcy the way forward for me? I don’t want to make a mistake and choose something that ruins my future. I’d like to re build my future at some point. Obviously the word bankruptcy just naturally scares me. 

elsien

Laura721 said:

RAS said:

Laura721 said:

What are the negative consequences of me paying the fee and going bankrupt? Surely I will never be able to buy a house or do anything like that? Compared to other options. Thank you

Providing you follow up bankruptcy by managing your current income effectively, you'll be able to buy a house at some stage in the future.

It might be several years down the line but providers will be more concerned by frequent recent small missed payments than a bankruptcy 5-6 years ago. 

It'll take time to get any credit, so it's important to save an emergency fund as soon as possible after bankruptcy. 

Forgive me for my ignorance but when you say save an emergency fund what do you mean? In your opinion reading my brief information would you also suggest bankruptcy?

To cover the unplanned expenses (car breakdown, new boiler, whatever) that tend to crop up once in a while and which if you can’t get credit you’ll be stumped without it. A small savings safety net. 

Laura721

elsien said:

Laura721 said:

RAS said:

Laura721 said:

What are the negative consequences of me paying the fee and going bankrupt? Surely I will never be able to buy a house or do anything like that? Compared to other options. Thank you

Providing you follow up bankruptcy by managing your current income effectively, you'll be able to buy a house at some stage in the future.

It might be several years down the line but providers will be more concerned by frequent recent small missed payments than a bankruptcy 5-6 years ago. 

It'll take time to get any credit, so it's important to save an emergency fund as soon as possible after bankruptcy. 

Forgive me for my ignorance but when you say save an emergency fund what do you mean? In your opinion reading my brief information would you also suggest bankruptcy?

To cover the unplanned expenses (car breakdown, new boiler, whatever) that tend to crop up once in a while and which if you can’t get credit you’ll be stumped without it. A small savings safety net. 

Luckily I’m currently with my father so it’s a big help to me and my baby son. However I hope to be able to rent soon - how will a bankruptcy behind my name affect this? 

elsien

I think you will find renting more difficult with any sort of debt solution because the credit checks will show your defaults which will make landlords concerned about your ability to pay. As will being on universal credit.
It’s not impossible but you may need to look at how you can allay those concerns, such as if there is anyone willing to act as guarantor for example. 

RAS

You might be best to go BR after organising rental. I don't think they can see your credit record, best check out on the rental forum.  EAs will check the insolvency register. UC is also an issue