Been very stupid - will I go to jail?

Terrified77

Thanks everyone. I'm still absolutely terrified. I'm finding it easier to type this than actually speak to someone. Even at the meeting with the financial advisor, I was shaking like a log. And when he was asking how I'd spent the money, I was just blank ... "I dunno". I doubt the bankruptcy people or the OR would take very kindly to that response.

As far as what I owe, I can't even begin to know until I root through all my paperwork which is stashed all over the house, some of it NOT EVEN OPENED as the post comes through the door and I bung it in a drawer. Have been doing that for over a month.

I owe jointly with husband (who has disappeared & is not contributing!!):

£20,000 unsecured on house
Plus the mortgage

Neither of these are being paid at present. Equals £750 per month.

I owe all by myself:

£18,000 secured loan (first repayment hasn't become due yet - should I pay??)

£3,500 credit cards (no payments have been made for about 3 months)
£120 council tax

£96 electricity (due end of month or else they cut me off!)

I earn £1,150 per month, plus about £240 in child benefit/tax credits.

My rent when I abandon the house will be about £620 per month for a two bed house near my son's school. Obviously I'll have bills on top.

I have no idea about my present outgoings because I literally spend what I have in the bank when something needs to be bought. If there is nothing in the bank, I use my overdraft (or more than my overdraft most months) and also dip into the money left over from the loan.

It's a total mess and I don't even know where to begin. I will phone one of the helplines over the weekend. But I'm so scared of what they will ask and how I will answer because I seriously HAVE NO ANSWERS.

Waspeze

Hi, i'd just like to restate what other have said on here about the helplines (CCCS, Debtline) and that is that they are there to help, it may seem daunting or scarey to phone "official" people regarding your debt but they are totally non judgemental and will only advise on whats best for you!

WorldofDebt

Hi Terrified77,

It look's to me like you've more going out than you have coming in, which you cannot continue to live doing so. I'd recommend you pay your council tax, even if it's only a token payment.

The CCCS may recommend you pay your secured loan, as it's secured and is a preferred payee or something on them lines, however if your going to be giving up your house then don't pay them as when the house is taken back by your mortgage provider it becomes an unsecured debt, your loan provider will try and put the frighteners on you, specially the ones who get paid more to make you pay - Believe me Welcome finance branches harrassed me, were pretty rude and just insistant on getting payment, it went to a non branch office, with someone on a fixed wage who doesn't earn comission and he was very understanding and said he wasn't suprised by what i'd told him. My secured loan is now with the collections team at Welcome and they realise they cannot get a penny from me as they will loose any claim on the property to my mortgage provider due to equity and know i'm going bankrupt and have just asked to be kept informed of whats going on.

Anything you cannot afford to pay, cancel direct debits for - call the CCCS and get an interview over the phone with one of their advisors, believe me it's nothing scary and they are very understanding.

They will go through an income and expenditure with you, and from what you've said will give you the solution your looking for. They may recommend a DMP over bankruptcy though.

So_Sad_Angel

Hi T77

Congratulations for taking that first step to `freedom` you are ready to sort it out..I can tell (I had the same feelings of total dispair earlier this week) & you deserve a great big HUG - well done for posting!!!

I`m only on day 3 !! but the guys here have inspired me to take action once & for all. I can`t really offer advice yet but I called CCCS yesterday & got the same `voice shakes `& `brain would`nt work` but slowly (1 & half hours later) they have everything down on paper & I admit it was VERY SCARY but somehow very positive experience. They are very, very good.

The guy said that I had more options than I realised & for once last night I felt that I have hope...something that I hav`nt felt for years!!

So ..get that cuppa made, get your head together & pick up the phone!

I`m off to work now but hope to see later how you go on.

You go girl!!! lots of hugs

Angelxx

neas

Is this legal? If its illegal wouldn't you risk (even a small chance) going to jail?

If an advisor said go bankrupt and you borrowed 20k... went on holiday that would look like you was taking advantage before declaring bankruptcy wouldbnt it? Also attempting to hide money from the OR wouldn't be looked on very well. Its fraud.

Seems a bit of a loophole in the system if you can achieve this.

bluezone

Terrified 77,

Go and retrieve all the post from around the house and put in one place. It will feel very daunting at first but start going through the post/bills say 10 at a time and write all the figures down. Trust me the more info you can give us and the people on the phone lines the more advice you can get.

As for the mortgage you are both JOINTLY liable for as both names are on teh mortgage and the deeds.

Open up a new bank account (a basic one) so that you can start from scratch as it were with your earnings. I opened a Natwest Step account which still allows standing orders/direct debits but no overdraft - this will be a plus should you need to go bankrupt as they shouldnt need to close it.

Do you have a contact for your ex? Have you told the CSA - or whatever the equivalent is nowadays about him leaving? Does he not contribiute anything for the upkeep of the child/children? A court can enforce this on him especially with the mortgage etc.

Please trust me that things will get better - hey my debts were over £100K cos of my ex but I had to sit down and write things out and people were very helpful

Terrified77

Is this legal? If its illegal wouldn't you risk (even a small chance) going to jail?

If an advisor said go bankrupt and you borrowed 20k... went on holiday that would look like you was taking advantage before declaring bankruptcy wouldbnt it? Also attempting to hide money from the OR wouldn't be looked on very well. Its fraud.

Seems a bit of a loophole in the system if you can achieve this.

When I was advised to go bankrupt, the financial advisor said it was a case of "If things stay like this, that's probably you're only option." At that point, it wasn't definite that my husband wouldn't be contributing in the future so I didn't think it was definite that I would have to go bankrupt. I still don't know if that's my only option. That's why I'm here asking questions.

But obviously I have to ultimately ask: "If I do end up going bankrupt, how will they view my recent actions and what will be the action taken against me?". I need to be prepared. If it's likely that I will go to jail, or something along those lines, then I think disappearing off the face of the earth is just as bad as being in jail away from my son.

In response to the question from Bluezone about whether my husband has to pay maintenance and stuff, the answer is no. My son is not his son and we were only married for a short time before he abandoned us. My son is a teenager and I have never had contact with his real dad. So I'm all on my own, financially, phyiscally and mentally.

Husband is determined not to contribute financially towards the house or debts. In fact, he said when he left that he might go bankrupt. I don't know, he may have already done that. Would they tell me?

neas

have you got an equity in the house? If you've been there a long time maybe you have 50-60k equity in the house and can just sell up, rent and pay off your debts?

Not going bankrupt is better than having to. After bankruptcy you will still have to 'live within your means'. If you cant do that you'll head for a rebound years down the line.

Isnt your husband jointly responsible for the mortgage on the house? And shouldn't he be paying child support upkeep? These are minimum things he is required to do.

Terrified77

Neas, as I said in my post above, my husband is not my child's father therefore no maintenance is required to be paid. We were only married a short time so I'm not entitled to spousal maintenance after a divorce either. He has disappeared and is not contributing towards any debts/mortgage. I can't find him to make him pay - and even if I knew where he was, I couldn't make him pay. So I'm stuck.

There is no equity in the house as we only bought it 18 months ago and had a 110% mortgage through Northern Rock (thanks NR!!). That is where the £20,000 unsecured loan comes from - buying the house in the first place.

outrageous_monkey

Hi Terrified

I think your main concern here is, that you borrowed more money after a meeting with a FI who told you that if things stay the way they are then Bankruptcy is you option. Now, I'm guessing you went home and thought 'no, I can get myself out of this' and thought borrowing more money would help......thing is, it very rarely does, if ever. What it looks like to me is, someone who was scared, frightened and has no idea what to do for the best.

I promise you, you will not be the first person to have ever done that.

Look at so sad angels post, until you make a phone call to one of the debt helplines mentioned on here, then you dont know what your options are. I know going getting all the paperwork is incredibly daunting at the moment......opening it all will be even worse.....but you can do it!! You made a brilliant first post, which sounds to me like you are much braver/stronger than you think you are.

Please, please make the call. I promise you will feel much better afterwards. They're not going to judge you, we all make mistakes.