Is Bankruptcy as Daunting and Scary as it seem

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Hi guys, 
I’m putting off filling out the Bankruptcy application online because it’s really daunting and scary, like a leap into the unknown. 

I need to complete the form as I know for a fact I will never be able to pay my debts back. 

I have started the 1st couple of sections, in regards to income and expenditure, do I still need to provide household income, or just mine, the applicant. As we do not split the bills. Because my wife pays the nursery fees for the kids which takes up the majority of her income, she’s financially dependent on me. 

Thanks guys
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  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    Hi, have you spoken to someone at one of the free debt help agencies, such as StepChange, National Debtline, or Citizens Advice? They are all free and all offer confidential advice. They're very knowledgeable, they don't judge you and they will be able to answer all your questions and help with your online form completion. 

    Depending on how large your debts are, you could apply for a DRO - not as daunting as bankruptcy but stays on your credit file for the same amount of time, 6 years. You can apply if you don't own your own home and your debts are up to £20,000. I have had a DRO in the past and it was a lifeline. I contacted StepChange and the adviser there was sympathetic and non-judgemental and knew what she was talking about. After that first conversation with her, I never looked back and before I spoke to her, I was almost suicidal as I could see no way out. She suggested a way out, it was the DRO, which I'd never heard of before. If you do own your own home, they can suggest other options.

    Yes, I have to say that it does seem scary at first to enter into the agreement for either a DRO or bankruptcy but if you have the support of an adviser at one of the agencies, things don't seem quite as bad. 

    I've put links for Citizens Advice and StepChange here, you won't be sorry if you just have a chat with someone at one of them.

    StepChange : https://www.stepchange.org/

    Citizens Advice : https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/debt-relief-orders-what-you-need-to-know/
    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.
  • Mart7379
    Mart7379 Posts: 207 Forumite
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    MalMonroe said:
    Hi, have you spoken to someone at one of the free debt help agencies, such as StepChange, National Debtline, or Citizens Advice? They are all free and all offer confidential advice. They're very knowledgeable, they don't judge you and they will be able to answer all your questions and help with your online form completion. 

    Depending on how large your debts are, you could apply for a DRO - not as daunting as bankruptcy but stays on your credit file for the same amount of time, 6 years. You can apply if you don't own your own home and your debts are up to £20,000. I have had a DRO in the past and it was a lifeline. I contacted StepChange and the adviser there was sympathetic and non-judgemental and knew what she was talking about. After that first conversation with her, I never looked back and before I spoke to her, I was almost suicidal as I could see no way out. She suggested a way out, it was the DRO, which I'd never heard of before. If you do own your own home, they can suggest other options.

    Yes, I have to say that it does seem scary at first to enter into the agreement for either a DRO or bankruptcy but if you have the support of an adviser at one of the agencies, things don't seem quite as bad. 

    I've put links for Citizens Advice and StepChange here, you won't be sorry if you just have a chat with someone at one of them.

    StepChange : https://www.stepchange.org/

    Citizens Advice : https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/debt-relief-orders-what-you-need-to-know/
    I have spoken to Step change a couple of times online and they always tell me to ring them to answer my questions, but firstly I am useless on the phone. I hate it. I fluff my line so to speak. Last time I spoke to someone online they said you only have to enter my personal income and expenditure if it doesn’t specify ‘household income’ and as I said 90% of my wife’s income goes on childcare. My income goes on everything else including financially supporting her in terms of weekly shopping. She’s actually in the 4th year of an IVA herself. So I was thinking if I needed to include her income I could use her SoA as she had to provide household income with her IVA,

    I recently completed the Stepchange debt advisory questionnaire and that stated my only options were an IVA or Bankruptcy, but not eligible for a DRO

    The only thing I am worried about is not knowing what to expect once the application is submitted. Does the OR ring you to try trip you up with the answers you have already provided on the questionnaire. My answers will be 100% accurate. Or as close to as physically possible. If I only put my income and expenditure. Do they then question why I haven’t included my wife’s if I originally had to, resulting in the bankruptcy application being rejected. I try not to let my debt problem effect my day to day living , it is what it is. I just know for a fact I can’t afford to continue the way I am, it’s probably been about 10years I’ve struggled, buried my head in the sand, i need to step up and get it resolved. I can’t afford to have my bankruptcy rejected 

    I think I will follow your advice and get in touch with Stepchange or National debtline. Thank you for the links
  • Minkym00
    Minkym00 Posts: 770 Forumite
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    A few points to make:
    * The OR is not going to try and trip you up, they will just want to understand the causes of your insolvency. As you say you’ve struggled for 10 years then clearly it is not new debt, which is ultimately all they are interested in. The OR is practising a very light touch on bankruptcy administrations now and you will likely have a 10 min chat (to ensure everything is clear from your application) and that’ll be it.
    * Even though your wife physically makes the payments for your childcare it is still part of the household expenses. Post up your household’s statement of affairs and people will give you constructive comments. 
    * Bankruptcy applications are hardly ever refused and only when there is a technical reason (applicant is technically solvent, hasn’t permanently lived in the UK etc). 

    Easy to say i know, but try not to worry. It’s a very easy process and the OR’s are professional and understanding.
  • sourcrates
    sourcrates Posts: 29,026 Ambassador
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    The OR has no interest in "tripping you up", the telephone interview is at worst, just a box ticking exercise, most people are nervous about pressing the button, and once its done, most people can`t understand why they were so worried about it, it should be viewed as a new beginning, rather than an ordeal to endure.

    If they ask about the SOA, then you just tell them what you've told us, its really that simple, just be honest, you`ll have nothing to worry about.
    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 forumteam@moneysavingexpert.com. 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
  • Mart7379
    Mart7379 Posts: 207 Forumite
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    edited 25 March 2021 at 7:51PM
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    Thanks guys, thinking about it is daunting, and your right, I know for a fact once I have submitted it and been declared bankrupt I will wonder why I was so worried about it, I’ve asked many many questions on here via different Threads, sorry if I have repeated someone I have already asked in a previous Thread. Just my luck I’ll !!!!!! it up and end up paying more than I can afford to my Bankruptcy. 

    I registered via the gov website last night and gone through it entering all the details I know off the top of my head. Looks pretty straight forward. I would quite like to get a copy of the income and expenditure my wife has to send off for her IVA so I can go off that in terms of household income and expenditure just so we don’t have to start looking through bank statements, looking for the odd letter from Tax credits. Etc etc 

    Thanks again guys, you’ve helped put my mind at rest. And after looking through the application although I feel daunted, it looks pretty straight forward

    i think someone shared a link on a previous thread online, I will find it, or google search for 1 and post, fill it out and pop it up on the forum for some advice. 
  • Billy_B_North
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    Bankruptcy is a very major, life-changing event, so is not to be entered into lightly. I don’t agree with how minor some posters make it out to be.
    On the other hand, it can absolutely be the right choice for some people. The important points are that you have to make sure that it’s right for you, and that you go into it fully aware of what you are doing.
    You will be shutting off access to many financial services for several years, and from some careers for a lifetime.
    Do you have any equity in your home?
  • Mart7379
    Mart7379 Posts: 207 Forumite
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    Bankruptcy is a very major, life-changing event, so is not to be entered into lightly. I don’t agree with how minor some posters make it out to be.
    On the other hand, it can absolutely be the right choice for some people. The important points are that you have to make sure that it’s right for you, and that you go into it fully aware of what you are doing.
    You will be shutting off access to many financial services for several years, and from some careers for a lifetime.
    Do you have any equity in your home?
    Without a shadow of doubt it is a big step, i do believe it is the right choice, I obviously need to make sure the information I have is correct and as accurate as it can be. 

    I rent my property from a local housing association so no equity. And no, my tenancy will not be effected by being declared bankrupt if anyone was wondering. 

    Thanks all for the advice you have given so far. I greatly appreciate it. 
  • TinyPomegranate
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    You will be shutting off access to many financial services for several years, and from some careers for a lifetime.

    Surely most people are already in the position of shutting off financial services by being in so much debt they are considering bankruptcy? Ain't no-one gonna give a credit card to someone who already has eighteen of the little blighters.
  • Mart7379
    Mart7379 Posts: 207 Forumite
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    To be fair, I’m in around £15k worth of debt, a lot of it is credit card and catalogue debt, 2 larger debts are unsecured debts with a loan company and a credit union (all in all, I have about 20 individual debts, basically living beyond my means, taking out a small loan or credit cards to make ends meet), and yes I have already shut off a lot of financial services. However, without a shadow of doubt Bankruptcy is a serious position. And not to be entered into lightly. 

    As I said above, and I think I have asked before, I currently still pay into my credit union loan via payroll deduction. Should I stop these payments leaving my pay packet before I submit my bankruptcy application? 
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