Don't know what to do!!

Sillychap

Afternoon all, just looking for some advice regarding my debts. I have been paying small payments towards my debts for a good few years now  all defaulted. Spoke to step change they recommend bankruptcy as i rent and 46k debts. I wanted to go down this route for some time but always to afraid basically  i owed my parents 12k   Last year i came into some money  (redundancy)  a gave my parents 8k to help with my guilt of owing them. I am willing to go bankrupt but this is holding me back  the risk that my parents will be made  to pay the money back and receive letters/calls and that.
So any advice on if i should go bankrupt or carry on as i am paying small token payments
Thanks👊

Sonic101

Hi there

If you have already spoken to Stepchange and they have recommended bankruptcy, I'd be inclined to go with that advice as they know what they are talking about, they wouldn't recommend bankruptcy unless they truly believed it was the best option. 

]With £46k worth of debts, even if your creditors agreed to accept small token payments, you'd probably be paying of the debts for the years and years/the rest of your life.

If you go bankrupt the payment to your parents will probably be seen as preferential payment and the Insolvency Service may approach them to ask for it back - but if they don't have it, they can't pay it. For minor "offences" such as this you might get a Bankruptcy Restriction Undertaking/Order (BRU/BRO), but all that means is that you will still be under some of the same conditions of bankruptcy (such as not being allowed to apply for credit of more than £500 without letting the lender know you're bankrupt) for a couple more years after discharge - I don't imagine it would make much difference to your life. Check this out - https://debtcamel.co.uk/bankruptcy-restriction-order-bro/ (Debt Camel is a useful site).

Sillychap

Hi and thats the problem my mum has got the money i gave her still but if theres chance they get in touch than its a no go . I did not tell step changers about this just went through my debts and expenditure etc. 

Maybe i shud just plod on as i am  to be on the safe side

Keep_pedalling

Sillychap said:

Hi and thats the problem my mum has got the money i gave her still but if theres chance they get in touch than its a no go . I did not tell step changers about this just went through my debts and expenditure etc. 

Maybe i shud just plod on as i am  to be on the safe side

Is this because of them having to pay it back, or is it because you don’t want them to know about your true financial situation? If the latter I think your really need to be open an honest with them, rather than struggle on for years out of embarrassment. I am sure most parents would want to know and to help in any way they can.

Sillychap

Hi  they know most of it  but i dont want them involved   So my options are really limited i think

MalMonroe

Sillychap said:

Hi  they know most of it  but i dont want them involved   So my options are really limited i think

You are doing yourself a great disservice. Do you still live with your parents? I contacted StepChange a few years ago when I was in terrible debt and they recommended a Debt Relief Order. It was just such a relief to talk to someone and not be judged for the position I found myself in. My husband left home and I had a child to raise, money was very tight and I simply couldn't manage. The debts grew until they were unmanageable.

I decided to accept StepChange's advice and went for the DRO. It is almost the same as a Bankruptcy, just on a smaller scale but it remains on your credit file for six years, same as a bankruptcy. However, now it's all over, I have a fresh start and it's amazing. You are keeping yourself in such a position that you will never be able to have a fresh start. I know how easy it is just to stay in the same circumstances because of fear of change but I realised that I had to do something or I'd never be free of the financial millstone around my neck. As a result of having a DRO I had to have a basic current account (for naughtly people, as I thought) with no overdraft facility. I had to learn how to budget and make sure I never went overdrawn or there was a fee to pay. My debit card wasn't even contactless. I was annoyed about such restrictions at first but I did get used to budgeting and am now much better when it comes to handling my finances. It had been quite a shock going from two incomes to one low income with a child to raise. 

If your parents do know most of it and you declare bankruptcy, nobody is going to chase, follow, pester or harass them. Or you, for that matter. Your parents will not be involved - unless they open your post or answer your phone. I'm assuming you are someone over the age of 18 - you're an adult and if you want to keep your own affairs private and confidential, your parents will surely understand and respect your wishes? We all want our parents' approval but sometimes we have to just live our own lives and hope they will be as supportive as they can be if we get into bother. 

It's really difficult to take the first step, I know but you did that already when you contacted StepChange. Don't give up now when you have a great opportunity to make your life so much better. Bankruptcy is not the big disaster it used to be and it's not the end of the world.

Your options are not limited at all. What's difficult to understand is why you would want to remain in financial hell when there is a tried, tested and recommended way to escape. Surely your parents wouldn't want you to suffer?

Sillychap

Hi thank you for the great advice there.
I rent married with 2 young children.
Ive looked into all the restrictions i dont think it will bother me now  as i have lived without credit for couple of years or so now. I just dont want my parents to be contacted saying they have to pay the money back basically.

fatbelly

It's a possibility. The guidance is here

https://www.gov.uk/guidance/technical-guidance-for-official-receivers/31-antecedent-recoveries

Bankruptcy is the obvious route but there is this complication and it would have been better to discuss this with stepchange

I can think of two other options that they might have discussed - not necessarily easy or guaranteed a good outcome:

• stop paying and see who does what. Most debts do not see court action and, if they do, there is the question of how they can be enforced. Someone in rented accommodation and no assets has little to enforce against but if you are working they can go for an attachment of earnings.
• ask your parents if they will help with full & final settlement offers. You would only do this on enforceable debts so would do CCA requests on the relevant ones. Often old loans, credit cards, catalogues cannot comply with these requests and so the debt is unenforceable and of low priority

Sillychap

Hi thank you for that info.
This is the reason why i cant go bankcrupt.
I have 4 creditors total   2-3 years old they are now  i pay £5 to each. Tbh i rarely here from them its not been to bad but obviously all that debt i owe is still hanging over me and it does play on my mind alot.

fatbelly

Just to be clear I'm not saying 100% that the Insolvency Service would go after this money. Just that they have the right to do so if they wish.

Obviously the longer the gap between the 'preference' and the bankruptcy application, the less likely things are

If your parents no longer had the cash then it's less likely.

elsien

I would suggest going back to stepchange, telling them what you’ve told us and see if that impacts on the solution they are suggesting. They can only help if they have all the relevant information.