Considering Bankruptcy - So scared :(

Moos_Mummy · 29 August 2017 at 1:42PM

Hi all,

I've been weighing up options of either an IVA or Bankruptcy and to be honest I think Bankruptcy is my best option. This has been a massive step to post this in here and I'm so anxious about it so please be nice.

I'm suffering quite bad with mental illness at the moment and this is mainly due to my debt problems.

I know I have got myself in to this situation and only have myself to blame, however now is the time to do something about it.

I don't have any arrears at the moment as I have basically been living off credit and have been paying the monthly payments using my wages and then getting money from another credit card (although soon this will be maxed out and I will end up defaulting).

To be honest the whole thought and process of this is frightening me so much but I have read lots of posts about how it is a weight lifted off your shoulders and the best thing people have done to manage their debts etc.

My main concern is losing my house (we private rent) Although my husband pays 100% of the rent, we still both have to have credit checks etc. At the moment we are fine as we have renewed for another year and no checks were needed etc. Hopefully this will be case going forward unless we have to move.

I have 2 young children (5 & 2, school & nursery part-time) and really just want to sort my life out and have a stable future with NO debts. I'm actually very frugal when it comes to shopping for food and bargains but my problem is I shop too much, hence the debt (this is actually partly due to my mental illness, please no judging).

Anyway, I know that Bankruptcy will probably leave it's mark forever but I don't see any way we will ever be able to afford a mortgage in the foreseeable future and I don't have any assets like a house/mortgage or a car).

I just worry I will end up losing everything (my home/my job/my kids even!)

I have done a SOA and as you can see I have no disposable income left at the end of each month and not even the money to make these debt repayments as cost of living is just so high. I only work Part Time due to childcare costs but need the extra money for bills. My husband pays for the rent, half of the bills so he absolutely can't contribute anything further. As you can see, it's mainly childcare that cripples us!

Please could someone take a look and see if Bankruptcy would be right for me in my situation. I will be talking to Stepchange too.

Many thanks in advance
A very worried mummy

xxx

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 1287
Benefits................................ 0
Other income............................ 137.6
Total monthly income.................... 1424.6
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 0
TV Licence.............................. 13
Satellite/Cable TV...................... 53
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 60
Childcare/nursery....................... 550
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 22
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1442

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................7500......187.......0
Virgin.........................5386......98........0
Lloyds Bank....................2005......20........0
Tesco..........................3500......35........0
Halifax........................3500......35........0
HSBC...........................6280......160.......0
Total unsecured debts..........28171.....535.......-

Monthly Budget Summary
Total monthly income.................... 1,424.6
Expenses (including HP & secured debts). 1,442
Available for debt repayments........... -17.4
Monthly UNsecured debt repayments....... 535
Amount short for making debt repayments. -552.4
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -28,171
Net Assets.............................. -28,171

sourcrates · 29 August 2017 at 1:57PM

Hi,

Bankruptcy does not leave its mark for ever, after six years all trace will be gone, the only time you will have to acknowledge it again, is if you apply for a mortgage some time in the future, and it wont be a definite No if you answer yes.

There are a few possible savings to be made in your SOA, but nothing significant enough to make much of a dent in 28k, and certainly not enough disposable income to pay any kind of debt solution long term.

I would say far from been scary, Bankruptcy would take away your stress and give you a new start, there are very few negative aspects of Bankruptcy for the average person these days, no requirement to appear in court any longer, you can only apply online now, the rest of the process is conducted over the phone, and via the mail.

You just need the fee, any ideas on how you will get that ?

Moos_Mummy · 29 August 2017 at 3:06PM

Thank you so much for your reply. I must admit, the thought of not going to court is a massive plus for me as before I just simply wouldn't have been able to do this but now it's online that makes it a little easier.

I was applying for Contents Insurance the other day and the first questions before it moved forward was: Have you ever been bankrupt? - surely it can't affect things like £9 a month contents insurance, even after the 6 years can it?

I do worry so much about the future but the simple thing is, I can't pay my debts so I t's now or never!

Re the fee, I would probably take the money out on my credit card seeing as it will all be written off. Either that or grovel to the parents.

My scariest thing is stopping the payments initially to my creditors - I have never in the last 10 years ever missed or failed to pay any payment, so that really frightens me but I understand that once in to Bankruptcy - they can't chase or anything, is that correct?

I've always thought of Bankruptcy as being 'the end' but hopefully it will be the beginning of a new me and a chance to sort my life out and get over my illness.

Fingers crossed anyway! Its all just very daunting.

Thanks again xxx

sourcrates · 29 August 2017 at 3:23PM

Moos_Mummy wrote: »

My scariest thing is stopping the payments initially to my creditors - I have never in the last 10 years ever missed or failed to pay any payment, so that really frightens me but I understand that once in to Bankruptcy - they can't chase or anything, is that correct?

Thanks again xxx

Oh thats nothing to worry about, but i do know that feeling, i was the same, never missed a payment until that point in time when i realized i couldn't carry on paying as i was.

All you will get are phone calls and letters, collection activity by the creditor can go on for many months, its nothing to worry about, as your solution, once initiated, prevents any creditors contacting you, and demanding payment, you also have legal protection as well, so once you start the Bankruptcy procedure, and its approved, you can forget all about your creditors.

It is the start for someone like you, the repercussions may follow you around, but there are always products and solutions that dont ask if you were ever bankrupt, so its certainly not the end.

Moos_Mummy · 29 August 2017 at 3:55PM

Thank you so much sourcrates, that's really helpful and seems a little less frightening.

I'll be starting the procedure in the next month so fingers crossed it all goes smoothly! I wanted to do an IVA but to be honest I just think Bankruptcy will be the best option for me and my circumstances as I won't have the money to pay back an IVA.

Thanks again for all your help, i'll continue reading some more posts.

Thanks xxx

Jr14 · 29 August 2017 at 5:25PM

I'm in the same boat as you! Have a little one and have been worried about private rent etc but I think it would only cause problems if you were in debt to your landlord!

I've put it off for so long and got further into debt - I'm currently going through the process of a DRO and already feel so much less stressed (just not looking forward to the calls and emails re missed payments until it clears).

I've found everyone on here so helpful and don't worry about losing your kids that's wouldn't happen! Look forward to having a nice Christmas after all this &#55357;&#56856;

Potbellypig · 29 August 2017 at 7:46PM

Where's your partners income?

Moos_Mummy · 29 August 2017 at 8:58PM

I didn't put my Partners income as he hasn't any spare money to help towards anymore as he already pays 100% rent plus a few other bills. We don't have a joint account but we both pay half, equal to what we earn.

Potbellypig · 30 August 2017 at 11:07AM

Moos_Mummy wrote: »

I didn't put my Partners income as he hasn't any spare money to help towards anymore as he already pays 100% rent plus a few other bills. We don't have a joint account but we both pay half, equal to what we earn.

When I went bankrupt, they looked at mine and my partners income (total household income). I think your level of debt is enough to go bankrupt in any case, but I would just check that they won't take into account your partners income into account, as they may say you've got enough left over to repay some, depending on what he earns of course. The question will be asked by the official receiver when you say that your partner pays your rent and some other bills, so you'd be better off having an answer prepared which you know he'll accept.

Moos_Mummy · 4 September 2017 at 11:11AM

Ahhh Jr14, hope it all goes smoothly for you. Its not a nice situation but it's good you are feeling a little less stressed! xxx

Moos_Mummy · 4 September 2017 at 11:12AM

Potbellypig wrote: »

When I went bankrupt, they looked at mine and my partners income (total household income). I think your level of debt is enough to go bankrupt in any case, but I would just check that they won't take into account your partners income into account, as they may say you've got enough left over to repay some, depending on what he earns of course. The question will be asked by the official receiver when you say that your partner pays your rent and some other bills, so you'd be better off having an answer prepared which you know he'll accept.

Thanks for the info! I will of course tell the OR my partners income/outgoings etc it's just that I think he/she will agree he can't pay anymore than what he does as our rent alone is £1325 a month! I'll make sure I have all his info too!

Thanks x

Considering Bankruptcy - So scared :(

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