Some advice please. £75k Bankruptcy only option?

antpaul

I’m in a tough spot financially and looking for advice. I think bankruptcy might be my only way forward, but I’d really appreciate hearing from others who’ve been through similar situations or know what to do. Here’s what’s going on:

• Debt Situation: I owe around £75,000 across multiple creditors, and my monthly repayments are about £3,000. Most of this debt has built up from living expenses after redundancies (both mine and my wife’s), illness, and rising interest rates. I’ve managed to pay chunks off in the past, but it’s crept back up, especially after losing my last job and dealing with the cost of living increases.

• Employment Issues: I work in senior roles in technology companies and have earned well in the past (up to £120k a year). But I’ve struggled to find stable roles recently, and my current employer didn’t pay me in December after they lost a major client. It’s unlikely they’ll pay me going forward, and I’ve been living month to month, so I don’t have much of a safety net.

• No Assets: I don’t have any assets—no house, no car (it’s on a lease in my wife’s name), and no savings apart from a small amount set aside to cover essentials for a couple of months (£650/month for food, car insurance, and phone). My wife and I live with her parents for family reasons (but we pay rent), and our finances are separate (no joint accounts).

• Missed Payments: January is the first month I haven’t been able to make my payments, and creditors have already started chasing me. I’ve emailed them (Nationwide, Amex, Barclaycard, First Direct, Virgin, Halifax, PayPal, HSBC) to explain the situation and ask for a freeze on payments, but I’m not expecting much help.  Or do you think they would give me few months breathing space?

• History with Debt: I’ve been here before about 20 years ago. Back then, I tried to fix things but ended up with defaults and CCJs, which wrecked my credit and meant I couldn’t get a mortgage. I’m worried about heading down that road again, and I feel like bankruptcy might be the only way to reset everything and start over.

Even if I find a new job soon, I’ll just be chasing minimum payments, and the debt never seems to go down. Once defaults or CCJs are issued, the six-year clock will start ticking anyway, so I’m wondering if it’s better to deal with this now through bankruptcy.

I’d love to hear your thoughts or advice:

1. Do you think bankruptcy is the right choice for someone with no assets and debts like mine?
2. Is there anything else I should try before taking that step?
3. What should I expect if I do go bankrupt (e.g., how to manage creditors until it’s finalised)?

Any advice, tips, or shared experiences would mean a lot right now. I’m feeling pretty overwhelmed, but I know I need to sort this out.

Thanks in advance for your help!

sourcrates

For any kind of debt solution that requires monthly payments, you obviously need a stable income, which you currently don`t have, so that basically removes all other options short of bankruptcy.

You could inform your creditors of this, get everything put on hold, and once you find work again, make informal payments towards the debts, only down side is it might take a long while to reduce a debt of 75k.

Your other choice with no assets and no real income is to go bankrupt, you will have to find the £680 fee, but once you have that money, you go online, fill in the application, and usually within 48 hours you will be confirmed bankrupt.

Most simple bankruptcies are done and dusted within a couple of days, so no waiting around, if your income is benefits only, then no IPA will be granted, and the OR`s phone call will simply be a box ticking exercise, its then just a case of waiting 12 months till discharge.

Its up to you which way you go with this, I`m not trying to downplay the importance of going bankrupt, it will be in the London Gazette forever, but only on your credit file for 6 years, most people who go bankrupt say they wish they`d done it sooner.

EssexHebridean

There is the bankruptcy board on here where people who have been through the process might be able to help reassure you and deal with any questions you may have too. As sourcrates says - it IS a big thing, but it's certainly not always a bad thing and with no assets to be concerned about it does sound like it might be the right step for you. 

ManyWays

How happy would you be with not working for a year so no Income Payments Order was set? You could study or do voluntary work. Could your wife manage whatever you need to contribute to the bills for a year? 
Because if you get a job, as your bills presumably arent large, you would then be paying most of your income to an IPO for 3 years.