New to bankruptcy, lots of questions

beth3735

Hi, just a bit about myself,
im a single mum to 4 children, aged 18,16,13 and 2 years old. I work part time.

I have debts of around £28k and I’m getting no where paying them off. I currently pay a couple of them £5 a month and I would be 128 years old before that one debt alone is paid off.

this is my SOA

font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 3

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 514.58

Partners monthly income after tax....... 0

Benefits................................ 1450

Other income............................ 225[b]

Total monthly income.................... 2189.58[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 595

Management charge (leasehold property).. 0

Council tax............................. 157

Electricity............................. 75

Gas..................................... 75

Oil..................................... 0

Water rates............................. 35

Telephone (land line)................... 0

Mobile phone............................ 124

TV Licence.............................. 13

Satellite/Cable TV...................... 39

Internet Services....................... 0

Groceries etc. ......................... 500

Clothing................................ 70

Petrol/diesel........................... 70

Road tax................................ 18

Car Insurance........................... 23

Car maintenance (including MOT)......... 35

Car parking............................. 15

Other travel............................ 0

Childcare/nursery....................... 25

Other child related expenses............ 70

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 27

Buildings insurance..................... 0

Contents insurance...................... 15

Life assurance ......................... 4

Other insurance......................... 17

Presents (birthday, christmas etc)...... 30

Haircuts................................ 20

Entertainment........................... 50

Holiday................................. 0

Emergency fund.......................... 75[b]

Total monthly expenses.................. 2177[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 950

Other assets............................ 0[b]

Total Assets............................ 950[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Intrum, Tesco .................7094......0.........0

Studio.........................614.39....0.........0

Cabot, aquacard................2016.83...0.........0

Very...........................3001.82...0.........0

Simply be......................934.4.....0.........0

JD Williams....................1708.08...0.........0

PRA NatWest ...................3856.88...0.........0

PRA Barclaycard................6204.99...0.........0

Fashion world .................650.34....0.........0

Advantis, Next.................636.78....0.........0

Paypal.........................362.14....0.........0

Look again ....................349.69....0.........0[b]

Total unsecured debts..........27430.34..0.........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,189.58

Expenses (including HP & secured debts). 2,177

Available for debt repayments........... 12.58

Monthly UNsecured debt repayments....... 0[b]

Amount left after debt repayments....... 12.58[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 950

Total HP & Secured debt................. -0

Total Unsecured debt.................... -27,430.34[b]

Net Assets.............................. -26,480.34[/b]

please could someone go through this for me and adjust what you feel needs to be adjusted.

im not sure if bankruptcy is my best option but my hours at work won’t be any more for a while due to the toddler. 

Thank you in advance 

Minkym00

Have you looked at a debt relief order as your debts are under £30k. This is much cheaper at £90.

beth3735

Thank you,
I haven’t looked into that, does it have the same sort of affect? Like closing of banks, needing an assessment to check ur reason is good enough etc. 

I’ll definitely look into it though thanks 😊

flipflopflo

https://www.gov.uk/government/publications/getting-a-debt-relief-order/getting-a-debt-relief-order

You work through an intermediary and if they deem you to be a suitable candidate then they are fairly much impossible to fail.  

Get in touch with https://www.nationaldebtline.org/

or

https://www.stepchange.org/

or one of the other intermediaries in the gov.uk link above and they will talk you through everything. 

beth3735

thank thank you, it seems similar to bankruptcy, I can’t see whether they block bank accounts or not like they do at the beginning of a bankruptcy?

also I’m seeing a lot of how they can deny your application, I’m wondering how often this happens.

I’ll be giving stepchange a call on Monday to see if I can go ahead with it. Thank you 

fatbelly

It looks like you'd qualify for a DRO, and bankruptcy if a DRO is a problem.

The only things that looked odd to me was that mobile phone spend is very high and food could go up if you need it to.

beth3735

The mobile phone is 5 contracts in 1, the 3 older children, myself and my ex husband. Child maintenance is 200 but he adds his £25 to pay off his contract until the end.

fantastic thank you, I will look for the DRO just a little worried that if it’s not accepted I’ll lose the £90 which is a lot to me 

sammyjammy

As an aside look at changing your contents insurance when its up for renewal, it seems quite pricey.

sourcrates

beth3735 said:

The mobile phone is 5 contracts in 1, the 3 older children, myself and my ex husband. Child maintenance is 200 but he adds his £25 to pay off his contract until the end.

fantastic thank you, I will look for the DRO just a little worried that if it’s not accepted I’ll lose the £90 which is a lot to me 

You only pay the £90 once the application has been submitted by the intermediary, it won`t be submitted if there is a chance it would fail, this is the job of the intermediary, to make sure the application won`t fail, so you won`t lose any money.

Very few actually fail, the numbers are very small, and those that do are for quite serious or regulatory reasons.

Your bank account is not frozen in a DRO, but most people have debt with their bank, so a new basic account is a must have anyway, the DRO will have very little effect on your everyday life, the same can actually be said for most standard bankruptcies as well these days, but a DRO is less invasive, both options will stay on your credit file for 6 years regardless.

The main issue with a debt relief order is the £75 per month disposable income threshold.
Its one of the main qualifying criteria, after all essential bills are paid (not including any debt repayments) you must have £75 or less left per month, or its an automatic decline.

You are not checked up on, or watched, or anything like that, but you must budget correctly, I cannot stress this enough, to make sure your disposable income is below the threshold of £75, which is why fatbelly suggested that "the food bill could go up if you need it to".

beth3735

Thank you so much for all the advice.

Another question is roughly how long from putting in the application does my year of DRO start please? 

JonVarnas

beth3735 said:

Thank you so much for all the advice.

Another question is roughly how long from putting in the application does my year of DRO start please? 

When I did mine in September 2020, the to-and-fro with Stepchange took a couple of weeks, and when they submitted the application it was approved within a week.