er.. Help!

monkey74

I took out 8 credit cards 6 years ago, however I lied on the applications and made out that I was in a fairly paid job, I was on incapacity benefit for depression at the time. I didn't use the cards for about a year, but then I started using them online, getting sucked into various programmes, scams, and gambling sites and bulit up a debt and then a bigger debt trying to get out of debt. I stayed up to date with all the payments until Feb, after circling them round for a while. I am now no longer depressed but I should be, I am £20000 in debt but I am now claiming Job Seekers Allowance. I have done the expenses form with CCCS and submitted it to the credit card people, it shows I have more going out than coming in, so I am only paying the creditors £1 a month at the moment. I am getting about 20 phone calls a day, I ignore them, I have caller display. I am in the process of starting my own business through New Deal, but I really don't know which way to go. Bancruptcy sounded good initally but I am concerned that it will involve deep scrutiny as to the reasons behind my debt, and thus the discovery of my lies could land me in deeper trouble. I have been drawn towards an IVA but mainly because I don't think they would look at my reasons for the debt in such detail (but I don't know). But I can't afford an IVA at present, I have managed to make payments until now by selling my stuff, I tried to include this when talking to the debt advisor by saying that I had about £2500 worth of stuff left to sell on ebay, which would give me about a year on an IVA at £200 a month but he couldn't include it because that isn't proper income. I expect to be making some decent money in about 18 months but I just don't know what to do right now. I am worried that they aren't going to accept an IVA because I won't have a stable fixed income when I start up the business. I've read quite a bit about them, but I thought bankruptcy or IVA was the only way to go until today when I found out about the debt management plan, this might be better for me what do you think? Also when sorting out an IVA or DMP do you have to prove your income, or do they just accept what you say?

boredofbeingathome

Don't know what to suggest, to be honest with you. The problem you have is that as you stated, the lie may catch up with you. I would try for a debt management plan and hopefully be able to pay your debts off. If your creditors freeze your interest, then with stuff sold you can make a dent in your finances and give yourself a chance to clear them and get on your feet.
Hopefully you will never find yourself in that position again, it is horrible living with lies and consequences..and i am sure you have beaten yourself up about it all.I would say that depression has a lot to do with mindset and spending, which is more than likely to be the reason behind it all, so at leastnow you are in a better frame of mind and thinking straight, you will be able to get out of it.
Good luck with getting something sorted. Bob

grey_lady

Well done for taking the first step with the cccs!

IVA's have quite a high failure rate, a lot of people end up going bankrupt during them as they cant keep up. I don't know if you have to prove your income though.

I wouldnt worry to much if it was a couple of small lies on the credit cards application a few years back - with regard to how it would affect a bankruptcy hearing.

I've been in significant amounts of debt in the past (about 12k)
and been unable to make the minimum payments when i was out of work
and stupidly did the head in the sand and handed the responsibility over to a fee charging DMC, they told me i would be out of debt in 7 years but when i eventually did the maths a couple of years later i realised it would be about 17!!! The free places such as cccs, cab really are fantastic in comparison to the ones that charge imo.

Budgeting for every eventuality under the sun (it took me a long time to learn that one) and snowballing got me out of debt.

Bankruptcy is a big decision, good luck with whichever route you decide to go down.

hypno06

Hi Monkey - I would agree - maybe try a DMP and see how you get on.

There are other things to consider though...

- are you likely to earn a salary in the foreseeable future, so you can increase the £1 a month you pay.
- do you own your own home

Don't dismiss bankruptcy altogether, particularly if you don't own your own home. However, I am not sure how bankruptcy might affect your new business.

I am going to copy and paste your first post on the bankruptcy board to see what information they can give you on there.

Give CCCS a call today and have a chat with them - they are very helpful, as are Payplan, CAB and National Debtline.

good luck, and keep posting here, the support is amazing!

Richard_S

Hi Monkey,

I definitely agree with the previous posters about contacting one of the Debt Charities as a matter of urgency; paying a nominal £1 per month is only a very temporary solution. They'll hound you to death with phone calls and letters.

As you've found out an IVA is not an option; they only ever seem to work for people with assets to protect and a decent income.

A Debt Management Plan may be an option but you'll find that a struggle if you're hoping to go into business. Most start-up businesses tend to earn less than forecast rather than more, and the demands on your cash resources are likely to increase rather than decrease.

I would enquire with the New Deal administrators whether bankruptcy would affect any grants or income you receive, and try to get anything they tell you confirmed in writing. Once you've got all the facts in front of you, it should be easier to make a more informed decison, and one that's best for your long-term interests.

Bankruptcy will certainly clear your debts and leave you free to concentrate on your new business, but it's not without it's problems, and you should be absolutely certain that it's not going to adversely affect you at some point in the future before you go down that route. As an example, it's extremely difficult to open a business bank account if you've been declared bankrupt.

In summary, get as much information as you can; speak to the Debt Charities, and then you'll be able review your situation more objectively.

Regards

Richard

monkey74

Thanks for all the replies people, it is very much appreciated. I haven't made a decision yet, although I am persuaded towards a DMP, and no I don't own my home.

bank_of_slate

Hi Monkey and welcome to the forum, no judgement from anyone on here, you know what you did is wrong but what's done is done.
The people at CCCs will give you sound advice!
Keep posting on here for moral support
...Linda xx