Where do I even begin?

[Deleted User]

Hi everyone, I am looking for some help managing my debts.

I have recently contacted all of the credit reference agencies for my statutory credit report, so I've managed to get a spreadsheet together with all of my debts. Some of them are not listed (council tax & rent arrears from previous properties) so I have made my best estimate. I have so far managed to uncover approximately £46,449.43 worth of debts, it could be more or it could be less due to my estimations.

I have applied for Breathing Space through Stepchange as I have had a high court enforcement agent hounding me to pay a debt that I was unaware of. I have submitted an N244 to have that set aside (hopefully) as I genuinely knew nothing about it until the letter arrived the other day. This has prompted me to take a good hard look at my financial situation and act on it. Up until now, I have just buried my head in the sand and got more debt to get out of the mess I was in, thus, I now owe nearly £50k at the ripe age of 30!

I am really struggling because I live with my disabled partner and we rely soely on state benefits, we receive a combined income of £1810.81 per month and pay rent and lots of other expenses from that. We are left at the end of the month with £50 (if we are lucky) after paying out our essentials (and a few non-essentials, like Sky TV... But my partner suffers with mental health issues, so it's really for her benefit).

I really just need some advice on where to go from here, it's looking like bankruptcy is a realistic possibility given that it's unlikely I can afford to pay these debts... The problem is, I don't have the £680 required so it's not something I can do anytime soon.

I've attached a screenshot of the spreadsheet I've made so far (hopefully this is allowed) as it shows where the debt is owed. Hopefully that's helpful to be able to advise me further.

I'm sorry for the wrong post, I'm a bit all over the place with this and I really do want to get my life back on track..! Thank you in advance

fatbelly

Well that may be the most organised first post I've ever seen!

You are correct on all your points and yours is a suitable case for Breathing Space (most aren't) which will give you 60 days to sort something out.

It's clearly bankruptcy - you just have to work out how you will find the £680 fee and start to complete the online application using the info you have collected.

The good think about bankruptcy is that all provable debts are included even if you put in the wrong balance figure or forget to put the debt on the form.

The only oddities I can see is that if the court fine is regarded as a criminal fine it won't be covered and you should still pay your rent arrears at your current property to keep your accommodation.

The other thing is if debts are joint, as council tax may be, then the other party becomes liable and so your partner may have to look for their own remedy.

Do you have any assets such as a car?

[Deleted User]

Thank you! I’ve spent a few days getting all the info together, and thought it much better to be prepared!  

I have absolutely no assets, no car or expensive goods. The most expensive thing I own is an iPhone, which in this day in age I think is more of a necessity than a luxury? I’d be happy to give it up and have a Nokia brick at this stage though…! 

The court fine is being deducted from our Universal Credit at a reasonable rate, so that wouldn’t be an issue going forward. I have an agreement in place to pay the rent arrears at the current property - would it be acceptable to pay that as per the agreement even in a bankruptcy situation? 

Unfortunately (or rather fortunately?) all the debts are solely in my name, apart from 1 lot of rent arrears (£2156.08).

I don’t know if it’s worth going absolutely skint next month and just getting it over with, if we pay no bills other than rent and buy the essentials we should just be able to scrape through a month. It would mean getting into more arrears with some other things like current phone contracts (sim onlys), Sky and utility companies - but would that really matter? 

Thanks again!

sourcrates

You stop paying your non essential debts to get the £680 needed for bankruptcy.

Or you find it on a credit card or wherever you can.

It shouldn`t be that difficult, I have to say I agree with fatbelly on the clarity of your opening post, its nice to see someone with a plan.

[Deleted User]

That makes sense, thank you.

I do have the option of taking out a Universal Credit budgeting advance (which I understand will have to be repaid as it’s a current claim). Would that be considered acceptable in raising funds for bankruptcy? 

I just don’t want to be shouted at for taking out more “debt” right before submitting the application. 

sourcrates

Deleted_User said:

That makes sense, thank you.

I do have the option of taking out a Universal Credit budgeting advance (which I understand will have to be repaid as it’s a current claim). Would that be considered acceptable in raising funds for bankruptcy? 

I just don’t want to be shouted at for taking out more “debt” right before submitting the application. 

Well if your going to go bankrupt there`s little point continuing to pay debts your shortly going to be relieved of is there.

That is how the majority of pre-bankrupt`s fund the bankruptcy fee.

Best to keep things simple, then there are no more issues going forward.

kimwp

Am I right in thinking that stopping paying non-essential debts will only allow you to raise the £680 for bankruptcy at a rate of £50 a month?

fatbelly

Deleted_User said:

The court fine is being deducted from our Universal Credit at a reasonable rate, so that wouldn’t be an issue going forward. I have an agreement in place to pay the rent arrears at the current property - would it be acceptable to pay that as per the agreement even in a bankruptcy situation? 

Yes - there was a court case on this situation a few years ago - Sharples v Places for People Homes Ltd

fatbelly

I would have thought you could raise the £680 over 3 months by stopping payments of things that are going into the bankruptcy anyway

[Deleted User]

kimwp said:

Am I right in thinking that stopping paying non-essential debts will only allow you to raise the £680 for bankruptcy at a rate of £50 a month?

Yes that’s right more or less. But if we were to stop paying gas, electric, water and so on I could raise it much quicker. A couple of months at most, but I’d try and just get it over with within a month if possible. 

Suseka97

You are in 'breathing space' already - so do as suggested and stop all the non-priority payments.  Personally I wouldn't stop your utility payments and if it takes 6+ months to save the bankruptcy fee - then that's fine.  I appreciate you want to get the ball rolling, so fill in some time by completing the online application and get all your paperwork ready.  

Once everything is in place, you can then look forward to new beginnings and I wish you well on your debt-free journey.  I, too, applaud how organised you are and with such determination, you will soon be on your way