Bankruptcy

Stavvy_saver7947

I am months away from declaring bankruptcy. I have been to two debt advice charities that both suggest that bankruptcy is the most viable option for me. The problem? It costs money to declare bankruptcy and my income doesn't actually cover my outgoing costs. I am unable to borrow any money to cover the cost of declaring bankruptcy and the other solution was not viable because I am paying some people back money I owed them, which apparently isn't important. It is to me, but the problem is I am being chased by credit card companies for the money to be paid back, I have negotiated some breathing space, but I cannot see my income improving drastically any time soon. I am stuck between a rock and a hard place, just surviving paying my rent, council tax, water, gas, electric and basic food supplies. Im guessing that there are loads of people in my position, barely keeping afloat... but its not easy to get the feeling of drowning in debt out of my head. Any advice?

la531983

Draw the money off credit cards to pay for the bankrupcy, if you have any means to do so. I did this. Not ideal but it solves the problem.

Stop paying water, you wont be cut off. Stop paying minimum credit card payments, no action on those would be taken for months. Stop paying electricity and gas assuming you arent on pre-payment. That will raise some money too. Not sure what the situation would be in stopping paying council tax to raise funds to go BK, others can advise on that.

I never included my water in my BK, I didnt need to, I was paying that. They still wrote off two months though as someone clearly told them.

Also, why are you putting it off a few months? Is scraping together the fee the only reason for this?

Pollycat

Possibly more appropriate to this board…

https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it

RAS

Can we start with the basics?

Do you own or rent?

Do you have any valuable assets like a car over £2k?

Do you owe more than £50k?

If you paid your essential costs, including CT, how much would you have spare per month. Realistically, not eating beans on toast, but buying decent footwear and going to the dentist if you need to?

Do you have any private personal debts for which non-payment would be problematic?

sourcrates

OK, take a breath, the absolute worst that can happen with unsecured borrowing is a CCJ, the vast majority of which do not get enforced, those that do, usually involve an attachment to your earnings, but that is at the end of a very long collection process, that could take up to 2/3 years or even longer, 88% of defaulted debt never see`s legal action, so the odds are massively in your favour.

You could just stop paying, very little will actually happen, these creditors make the most noise, as they know they have no recourse if you stop paying, alongside that you have no assets they can seize, so you are more in the driving seat here than you appear to realise.

Don`t go straight for the nuclear option, you have barely scraped the skin of the collection process yet, how much do you owe?

ManyWays

the other solution was not viable because I am paying some people back money I owed them, which apparently isn't important. It is to me

which people do you want to carry on paying back?

la531983

https://forums.moneysavingexpert.com/discussion/comment/82086388#Comment_82086388

I missed that bit initially. Surely they are creditors and would have to be included in the bankrupcy and accounted for?

sourcrates

Unfortunately Bankruptcy is a bit of a blunt instrument, all your debts will be included on the day its petitioned.

Only certain debts are excluded, money owed to "some people" won`t be one of them.

Can you elaborate a bit more on this?