Preparing to submit application and terrified!

Hi all, 
I am almost ready to submit my bankruptcy application form and would like some advice before hand please. 
I have read up a rough time scale of what to expect but feel a nervous wreck. 
I am a single parent currently on maternity leave. My maternity pay is paid into an account that I have a £2550 overdraft on, I will need access to my maternity pay so do open a new basic bank account prior to submitting the application so I can access this still? Or will that be frozen too? How long can I expect accounts to be frozen for? Or am I better off having this paid to my sisters bank account so I can access money for day to day living? 

I don’t own any property or assets and have around £15k of debt which is crippling me. My monthly income is around £2100 and my outgoings are £2300, what can I expect to happen with the official receiver? Will they take over my money? 

Thank you in advance 
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  • MalMonroe
    MalMonroe Posts: 5,783
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    Hi, I had a very similar crippling debt 8 years ago and was advised to apply for a DRO - a Debt Relief Order. It's cheaper to apply for than bankruptcy and although it is something not to be taken lightly, it's not quite as serious as bankruptcy. It is for people who have up to £20k of debt - so you would be eligible to apply.

    It doesn't sound as if you have had any proper advice about applying for bankruptcy and before you take any action at all, I'd recommend you contact StepChange - it is a free service set up for people exactly like you and me who are in financial difficulty and are desperate for help.

    You have an overdraft, which could be added to your DRO, so you would need to open a new basic bank account. But please do speak to someone at StepChange or one of the other debt help agencies (don't pay for help though, some agencies are set up to help and also charge a fee but you can get free advice). There's also National Debtline and you can also contact Citizens Advice.

    It's just that I recommend StepChange because they helped me so much. And you have to go through one of these agencies as you can't just apply for a DRO on your own.

    There's a £90 application fee but you can pay in instalments. Here's some info from StepChange 

    https://www.stepchange.org/debt-info/application-process-for-a-dro.aspx

    To apply for bankruptcy costs £680. Info here : https://www.gov.uk/bankruptcy - and that says to check if there are other ways to deal with your debts. In your case, there is.

    Another thing is please don't feel embarrassed about being in debt. Lots of people do feel that way and I certainly did but the StepChange agent I spoke to was very understanding and not at all judgemental, put my mind at ease and I felt so relieved after speaking to her. You're going to be raising a child single handedly and that's no easy task, as I know.

    I hope this has helped - I have been through similar things so I know what it's like and I did come out the other end. One good thing that came of all my financial troubles is that although my income is still quite modest, I am better at budgeting now. I don't own my own property any more but I can afford to pay rent and run a car as well, and things are much better. 

    Good luck. You have a lot on your plate but there are people and organisations out there who can and will help you. 
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • MalMonroe said:
    Hi, I had a very similar crippling debt 8 years ago and was advised to apply for a DRO - a Debt Relief Order. It's cheaper to apply for than bankruptcy and although it is something not to be taken lightly, it's not quite as serious as bankruptcy. It is for people who have up to £20k of debt - so you would be eligible to apply.

    It doesn't sound as if you have had any proper advice about applying for bankruptcy and before you take any action at all, I'd recommend you contact StepChange - it is a free service set up for people exactly like you and me who are in financial difficulty and are desperate for help.

    You have an overdraft, which could be added to your DRO, so you would need to open a new basic bank account. But please do speak to someone at StepChange or one of the other debt help agencies (don't pay for help though, some agencies are set up to help and also charge a fee but you can get free advice). There's also National Debtline and you can also contact Citizens Advice.

    It's just that I recommend StepChange because they helped me so much. And you have to go through one of these agencies as you can't just apply for a DRO on your own.

    There's a £90 application fee but you can pay in instalments. Here's some info from StepChange 

    https://www.stepchange.org/debt-info/application-process-for-a-dro.aspx

    To apply for bankruptcy costs £680. Info here : https://www.gov.uk/bankruptcy - and that says to check if there are other ways to deal with your debts. In your case, there is.

    Another thing is please don't feel embarrassed about being in debt. Lots of people do feel that way and I certainly did but the StepChange agent I spoke to was very understanding and not at all judgemental, put my mind at ease and I felt so relieved after speaking to her. You're going to be raising a child single handedly and that's no easy task, as I know.

    I hope this has helped - I have been through similar things so I know what it's like and I did come out the other end. One good thing that came of all my financial troubles is that although my income is still quite modest, I am better at budgeting now. I don't own my own property any more but I can afford to pay rent and run a car as well, and things are much better. 

    Good luck. You have a lot on your plate but there are people and organisations out there who can and will help you. 
    It was step change who advised me that BR was the best option. When I called them I had DRO in mind and was quite taken back when they advised otherwise. I have more than £50 spare income which is I believe why BR was recommended? However I received no further advice from them on what to expect next which is where my anxieties are coming from. 

    Thank you, embarrassed is definitely how I am feeling but I will feel relieved when I know there is no chance of a bailiff turning up to my home. 
  • sourcrates
    sourcrates Posts: 28,549
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    edited 18 January 2021 at 10:59AM
    Make your budget show a £50 or less deficit then.
    Make sure you use all of your allowences.
    If you have more than £50 disposable income, its an automatic rejection for a DRO.
    You gotta use your noddle here.
    Bankrupcy too extreame for 15k, you could easily make this DRO territory.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,243
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    My monthly income is around £2100 and my outgoings are £2300
    I have more than £50 spare income
    ?????
    I don't understand this. Put a brake on everything till this is sorted.

    If you have paid the £680 but not submitted the application, this can be refunded if you decide not to go ahead.

    You can go into a DRO with up to £1000 of 'assets' 

    How much is your car valued at? Was it this that caused the problem? There's a separate limit of £1000 for a car in a DRO.
  • I haven’t made the £680 payment yet. I don’t win a car, I use my parents if I need to use one. 

    Sorry I feel like I’m being stupid here- I had a mess about with the advice calculator thing on stepchange and the outcome has never been a DRO- my concerns are that my budget will be looked at and rejected or can this not happen? 
    I’ve attached my budget etc, what do you guys think? 
    Thank you for the advice this would be amazing if I could do a DRO rather than BR! 

  • Advice from step change. Still don’t fully understand. Surely  DRO is better than BR? 
  • sourcrates
    sourcrates Posts: 28,549
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    edited 18 January 2021 at 12:12PM
    It all really boils down to one thing with a DRO.
    Your budget must show you have £50 or less, left at month end, and don`t have large discrepencies between income/expenditure, the budget must be sustainable.
     A figure of around £30 disposable income would see you through.
    Play around with the figures, see what you can come up with, very few folk budget correctly first time around.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • MissFlossy222
    MissFlossy222 Posts: 60
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    edited 18 January 2021 at 12:20PM
    It sounds like you have a deficit budget ie. more going out than coming in rather too high a surplus?
    Debt advisors don't like submitting DROs if it looks like you're going to run up more debts.
  • fatbelly
    fatbelly Posts: 20,243
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    So what they're saying is that you do qualify for a DRO but that because it will stop your access to credit you may not be able to make ends meet if you go for one.

    Of course the same argument can be made if you go for bankruptcy.

    So the conclusion is that you do need to find a way to live on what's coming in, then apply for a DRO.

    Your food & housekeeping is 519 per month, or about £120 per week. Do you think that could come down?
  • fatbelly
    fatbelly Posts: 20,243
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    You could post a full statement of affairs on this thread using this calculator

    https://www.lemonfool.co.uk/financecalculators/soa.php

    Please format for mse

    Did stepchange do a benefits check for you?

    https://www.turn2us.org.uk/Benefit-guides/Beginner-s-Guide-to-Benefits/Checking-benefit-entitlement
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