Nearly 100K debt...HELP!

Dancingdebs

Hi nickiboop, (great name by the way!)The only problem with doing that is as well as my full time day job I have a self-employed job I do for evenings, Partyplan, which is commission based.All my stationary and customers etc have this number so would be a pain to change everything. I was thinking of upgrading but going on the lowest contract I could. I was going to give up the self-employed job as am totally shattered working 9 to 5 and then out again of an evening a couple of times a week, but figure if I can carry on for as long as I can I could chuck more at the DMP.

churchrat

hello DD, we've been living with a DMP for about 6yrs now, and we thought at first that we wwould have to go Br and lose everything. well, we really didn't have much except a lot of debt (60k) but we did own a bit of our house and have one sick child and 2 well ones, so we decided to go for the DMP and keep the house. BUT with br or an iva we could have been debt free by now, where as we have atleast another3 years to go. dmp was the right decision for us, but think carefully before you decide what you have to gain/lose by each option. maybe write a pros/cons list?
ps am also in kent, the carpark of England
good luck:D

Dancingdebs

Thanks churchrat, I am still in limbo tobe honest of what to do for the best. We dont have a house to lose, we have one car worth approx 1200 and another which is mine worth about 8K. Just feel that we want to try and pay back the debt mainly because in the last year we have stupidly spent on cards... we went on an extravagent holiday, bought a 42" plasma about 18 months ago and had to buy some furniture as moved to new rented property in April. We also had to pay for the garden to be done (just dirt as a new build) so spent approx 1k doing that, no money from the LL to do it either! If we was to go BR and she were to kick us out I would dig the whole lot back up again, LOL!

MathewLisett

Right from my own experience of bankruptcy, NEVER stop communication with your debts, especially if you go down the road of these debt managements schemes as they just !!!! it right up. talk to the debtors calmly and explain your situation, and no point lose your rag with them, especially if they start threating you with legal action as it just doesn't do you any good as your concentration levels go out of the widnow.

bankruptcy seems to be the only option just simply because of your large amount of debt, but be warned its not fun being bankrupt... it means no credit what so ever for 6 years , you will be cleared of any payment ie paying any debtors after 1 year due to the new law coupe, years back, you will be unable to buy anything like a new computer/car etc if its via card/load, and gaining a council house etc will be hard swell. basically anything credit related for credit scoring just forgot about it as it just wont happen, and if it does you would be looking at a high interest rate for re payment.

The bonus of going bankrupt is learning from your mistakes and simpyl not getting divorces etc, for example i was doing 90hrs per week every week for 4 years during my chef years and it was making me very ill, i then after a fmaily talk become bankrupt over the week adn for me it was the best thing to do as i respect money and loans so much more, i don't even touch loans/cards anymore as they are just evil.

Dont bother going to your local C.A.B as they know nothing, heck the only time they know something is when they look on their computer or book and read out what is in the book to which im readin with them ..

you will not be allowed to own or run a business of any type, your house etc may very well be taken so be prepared for that to happen, your car if its not a vital tool can be taken , you may very well find yourself in a shabby council flat for some years until you get some money together (which you will find very hard) to then move to another place of housing.

janiebump

Dancingdebs, hi there, everyone on here will help you through it, its great, they advise not critisise you!! Re the mobile i was with t mobile and my contract came to an end and i told them i was leaving as i needed pay as you go and they said i can do that with them and keep my phone number, they just swap it over for you! I now use the text mates rate at 3p per text and use in emergencys and people can still call me. Good luck with it all, i know the figure looks daunting but they will help you and you will chip away at it!! xxx

RAS

matthew

really concerned about what you say here. I have not been BR but even I know some of this is wrong.

Debs, please get advice from folk who know the current rules on the BK forum.

In the mean-time this is more accurate but not the whole story.

MathewLisett wrote: »

bankruptcy seems to be the only option just simply because of your large amount of debt, but be warned its not fun being bankrupt...

1. it means no credit what so ever for 6 years,

You will have to report that you have been BK for ever if you are asked, but once you are discharged, you can apply for credit. Mortgages are easier than CCs and loans.

2. you will be cleared of any payment ie paying any debtors after 1 year due to the new law coupe, years back,

You are automatically discharged after one year if there are no adverse factors. But if you have more than £100 per month excess income over expenditure (Your Statement of Affairs), you have to pay a high percentage of the excess to your creditors for three years.

3. you will be unable to buy anything like a new computer/car etc if its via card/load (loan)?

You can get a debit card (there are three that accept people who are BK and occasionally others let you keep the account), but no overdraft. There are also pre-paid credit cards.

4. and gaining a council house etc will be hard swell.

Never heard of this. Can be a problem getting private rented through agncies that do credit checks. You may need a guarantor or to pay money up front. You also need to check your current rental agreement in case it mentions BK.

5. basically anything credit related for credit scoring just forgot about it as it just wont happen, and if it does you would be looking at a high interest rate for re payment.

This is true of BK, IVA and DMP for consumer credit. As above, mortgages are differnt and after a couple of years, you may be able to get something close to a normal rate or a ormal deal.

6. Dont bother going to your local C.A.B as they know nothing,

You are required to get professional advice before you go BK and can go to any of the debt charities that you want to. If you go to CAB, you need to speak to a finaical advisor. Several of the people posting here work for CAB or CCCS and people on the BK forum can direct you towards support if you want to go BK. People here have more experience with DMPs.

7. you will not be allowed to own or run a business of any type,

An undischarged BK may not be or act as a director of a company but you can work as a sole trader, self employed etc. Where do you think the money to fund the IPO comes from?

8. Your house etc may very well be taken so be prepared for that to happen,

This depends entirely on your situation - if you have very little equity but can still afford to pay the mortgage, you may well keep it. You may have to get someone to buy the OR out but if there is nothing in it for him, then it only costs a few hundred quid in fees. If you cannot afford to pay the mortgage, you are likely to lose it however much or little equity there is.

9. your car if its not a vital tool can be taken ,

If it is not required or is expensive , you could lose it but the OR has to give you money to buy another (cheap) one if you need it for work

10. you may very well find yourself in a shabby council flat for some years

This contradict point 4 above. You will be able to get private rented as above, or a mortgage after a few years.

11.until you get some money together (which you will find very hard) to then move to another place of housing.

If you removed your credit payments, even the small amount of the excess income you are allowed to keep could be more than you have spare each month now.

So neither BK or DMP are awful, but both require you to live within a budget.

fermi

RAS has made some excellent and accurate points which reflect the reality of bankruptcy that most people experience.

Two things though.

1) An IPA takes 50-70% of surplus income. If you are lucky to be earning enough for the 70% band to apply then the remaining 30% will leave you with a sizeable amount.
In other words, if an IPA is fairly applied it is never crippling.

2) Restrictions on being a director of a company are lifted once you are discharged. I'm sure that's what was meant, but it seemed a little unclear to me.

It's certainly not easy, but neither is it the third circle of hell.

RAS

Thanks fermi - that is what point 5 meant.

And to add that you could get an early discharge after 6 -8 months.

fermi

RAS wrote: »

Thanks fermi - that is what point 5 meant.

Thought I must have misread.

RAS wrote: »

And to add that you could get an early discharge after 6 -8 months.

Never guaranteed (as you know), but it is fairly common. It's one of the reforms in insolvency law that is intended to make BR a needed and useful remedy rather than the the punishment that it in effect used to be.

Anyway, must get back on topic since this thread is about DMP's/IVA's

MathewLisett

RAS wrote: »

matthew

really concerned about what you say here. I have not been BR but even I know some of this is wrong.

Debs, please get advice from folk who know the current rules on the BK forum.

In the mean-time this is more accurate but not the whole story.



So neither BK or DMP are awful, but both require you to live within a budget.

I don't know all the legal sides etc, and i am biasing all that i have stated by experince from myself and other people i know.....the housing is specifically about my father, and he gained help from the council but it wasnt exactly the best house to stay but it was a roof over his head so im not contradicting at all.


bit of a tip for you though and thats if you are going to make pointers from somebody's post make your points in bold so they can tell the difference from their input as i still find it hard to distinguish from my own.