time to go bankrupt?

norserose

Hello,

What's OP stand for? Sorry to be thick, not really that familiar with this stuff.

Just want to say thanks to all of you for all the (differing) advice and info- as jen_jen says, it definitely makes for a more helpful discussion!

Just to answer a couple of questions, my loan is currently £10k at 7.7%, credit cards are £4.5k combined, although am not paying interest on most of that, and I have a £2k overdraft. That's £16.5k to date - but when I rang a debt helpline the other day and told them about the money I repay and what I need to live on (basic stuff, food and transport to interviews) she came up with the figure of £23k and advised bankruptcy. I was a little bemused, as I'm not sure where that figure came from, but I guess it's taking into account interest and living expenses, offset against my £55pw.

I'm not even including my £6k student loan, because at the moment I don't have to pay it back. But I suppose if you add that to the growing total, it's £22.5k.

Also, the thing with the job; the media's a hellish industry to break into, and whilst the pay is crap for the first 3 months (and involves a lot of commuting) the wages go up to £17k after 3 months, and it's a good position. Unfortunately that's the size of it, you have to start on peanuts and work your way up.

Still, doesn't mean that I can pay any more towards my debts for the forseeable. I just worry that it'll all be out of my hands soon anyway, the loan people expect an instalment in full next month, and if they don't get it, or even if they accept a lower payment, it's still going to screw up my credit rating.

mrcow

OP stands for Original Poster We're just too lazy to write it in full.

bonnie_2

i started with £40.000 worth of debt 0n just over £17,000 a year and there our 4 of us to feed and clothe and a house to run we are now down to around 13,000 of debt and this year we are finally paying of and closing accounts down.so if we as a family of four can do it i think you can bankruptcy, is a cop out unless it is an extreme situation .you would not be able to go bankrupt for student debt anyway.

meanmachine_2

Well done Bonnie.

It must have been really tough at times, but no doubt you feel better for it.

There's no longer any shame attached to being a bankrupt, and quite right to, but it can't do anyone's confidence any good to just give up and bail out.

If we all did that, the banking system would collapse and we'd have to go back to bartering and living in caves.

norserose

hello - how on earth do you manage to run a house, pay off £40k and feed four people on £17k per year?! Just interested how you go about it...

newfunk

I used to run a house, pay my mortgage, and feed 4 of us on 15k a year! it can be done

bonnie_2

by going without the nicities in life and money saving old style tips, i pay household bills and live on £50 for shopping and cheap baccy.i use the child benifit for kids.and have money for birthdays and xmas to buy clothes with.we have been paying of debt for about 10 years now but only really got my act together last january before that we were on a dmp which would have took forever to pay of.if i want anything new in the house i sell what i have to pay for it.you have to be disciplined and it is hard going but you get a sense of achievement.think about it this way if you leant money and didnt get it back you wouldnt like it.and his right the economy is already slowing down from too much borrowing.what would you spend the money on anyway do you run a house and kids or is it for socialising and clothes.its too easy to say lets go bankrupt and its not fair on us who are struggling to pay our debts of.

norserose

Hello,

Cheers for your posts!

Let me just say - I didn't run up this debt buying cocaine and handbags. It's gone on course fees and the expenses of doing a year long post grad. You might say I should never have gone on the course. To be honest, if I'd have known then what I know now, ie it takes more than a course to help you bag a media job, then I wouldn't have gone on it. But I didn't know - I thought it would be a good move and I worked my !!!!!! off on a boat, doing a 19hour day, often with no day off for up to 27 days at a time, just to get some savings behind me, to enable me to do it. Sadly even that was not enough, and I had to take a career development loan.

I've been temping for the last 2 years, and just keeping my head above water, but my last position which was temporary recently ended after 6 months.

Let me put it this way. Here's some sums:

MONTHLY OUTGOINGS:

loan repayment: £208
Credit cards: £120
direct debits: £45
food: £70
going out: £0
clothes: £0
_______
£443

MONTHLY INCOME

£220 - £443 = -£223

As you can see, I have a shortfall of £223 per month which compounds the debt that I'm in. I can't cut back any further; until recently I paid rent, I now live at home, temporarily for free, but that can't last. I don't go out, I dont drink, I don't smoke, I don't buy clothes, I don't have any "niceties of life" - I don't have a life! But still the money goes out.

Before saying, just cut back and sort it out, take a look at these sums and tell me what I can cut back on. I'm not irresponsible, just broke. After months of unsuccessful job searching (believe me, I'm not just sat on my !!!!!! watching Jerry Springer all day), I have an interview for a good job from a career perspective, but unfortunately, the starting pay won't leave me much better off than I am now.

If you think I could so something different with my money - do tell me, i could use the constructive advice. But I can't cut back - unless I stop eating and save myself £70 a month, I don't see what else can give.

Malestrom

Hi Norserose,

You need to take decisive action and you need to do it now. Sit down and write to your creditors. There are a selection of letters on the National Debtline website to give you some ideas.

You need to inform your creditors of your situation. I would advise that you offer to make token payments on your accounts of maybe £5pm to each creditor. Include your list of income and expenditure so that they can see you have no other money to pay them. State that when you're in full time employment you will start to repay the debts again. Ask them to freeze interest and not to add any administration charges. Also ask that all communication is made in writing.

Any money that you do have left over each month after paying each creditor £5 you can say is rent, paid to your parents, even though you don't pay rent. This could be used getting to job interviews, etc and its wise to have a little money to yourself every month. Its not as if giving them £20 a month will make any difference to the debt. Also, they might write back refusing your offer of £5pm but saying that they will accept £10pm, so this gives you some leeway here. So your sums might look like this:

MONTHLY INCOME

£220

MONTHLY OUTGOINGS:

loan repayment: £5
Credit cards: 3x £5=£15
Overdraft; £5
direct debits: £45
food: £70
going out: £0
clothes: £0
rent to parents: £80
_______
£220

They will probably all write back and refuse your offer. Just write again, enclose all the same information and state that you are trying your best to avoid bankruptcy and that its in their interest to accept this temporary arrangement. In the meantime, continue to make token payments, even if they haven't agreed to them.

REMEMBER, THEY CANNOT TAKE WHAT YOU DO NOT HAVE!

Personally, I don't think bankruptcy is the right option for you at the present time. You don't strike me as the sort of person that wants to shirk on their responsibilities despite what others may think. If you find that in six months time your creditors are still adding charges and/or interest and that your debt has risen substantially, then that may be the time to consider bankruptcy as they are effectively pushing you in that direction. You may find that in six months time you are in a much better financial position and able to repay the debts.

It doesn't matter what avenue you take, your credit record is going to be screwed so stop worrying about it, there's nothing you can do at this time to make any difference in that respect.

Can I just add that this made my day, thanks very much!!

norserose wrote:

Let me just say - I didn't run up this debt buying cocaine and handbags.

You will be truly wasted at McD's....but a job is a job.

Good Luck!

mrcow

norserose wrote:

Let me just say - I didn't run up this debt buying cocaine and handbags.

I don't think any of us did

But now I'm thinking maybe I've missed out