Help please

Belgrave20 · 24 March 2019 at 9:04PM

Hi,

I will try to keep this as succinct as possible but if I begin to waffle or go off on a tangent I apologise (I've failed).

Over the past 5 years I have created a sum of debt that with changes in circumstances I have come to realise is unsustainable for me to continue to support. In total just short of £25,000. This debt has, in part, been created through gambling (Online Slots), I couldn't give an exact percentage but 60-75%, would be my belief, discounting balance transfer fees, occasional larger spends and more recently living expenses. I haven't to this point missed a payment but, whilst one debt decreases another increases and some 0% interest CC's are due to end soon, this won't last for long.

I don't feel as though I'm extravagant in terms of what I spend and am not and have not been living the Life of Riley, I went away for a weekend earlier in March to catch up with some friends which was costly (train/hotel) but aside this I am a bit of a hermit, it has got to the point where I feel as though I don't live I exist, in the Eat, Sleep, Work, Repeat mode, and this is straining on my relationships (Girlfriend, friends and family).

At the time of taking the debt I was in a position to cover the repayments, due to low rent and minimal outgoings, Aged 29 (18 months ago) I was asked to move out of my parents home (goodbye cheap rent and minimal food costs), with no option to move back, and in the coming months my job is moving which will result in additional outgoings for a commute (I currently live 10 minutes from work), soon to be a train journey (25 minute drive - but I don't drive).

Due to this I have discussed my current situation with CAB locally and filled in an online test with StepChange, both have recommended Bankruptcy as my best option.
This is something I didn't expect, the finality of being told that I am insolvent I guess and it is taking me some time to get through this fact mentally, I have done a lot of reading over the past few days and feel as though I have confused myself more than helped myself.

Due to my debts being caused, in some portion by gambling, I expect I will be under some form of Bankruptcy Restriction Undertaking, I doubt the inability to become a Director will have an effect in this time (is this a permanent effect or only during the length of BR and the insolvency register (i.e 6 years)) and learning to live without credit will be difficult but if I am not making a loss at month end with my outgoings vs incomings then that should be easier.

Are there other restrictions that can be placed on me?
What length of time might I expect for these restrictions?

Also whilst I know I am being offered the best solution in the short to medium term, long term I don't know how much difficulty this will place on things such as getting a mortgage, getting future credit (if I ever needed it) and the like, I've already fudged it all up so to speak and to risk doing permanent negative damage to my financial self, by recklessly approaching something of this nature fills me with fear and dread.

So I suppose what I'm really asking is, what effect will my history of gambling have on my Bankruptcy proceedings (I'm currently not gambling and have been given information regarding local support by CAB)? What kind of payments would my OR expect me to make within BR? Would any of you recommend a different path given what I have said?

I've included my SOA below as it will be post move, as we both earn similar amounts we split the bills 50/50, the below is my 50%, certain things such as Internet & TV I pay in full, where my GF pays for Sofa's (HP) solely in her name, I've tried to be realistic on what I spend and where, i..e Holiday refers to visiting my Mum cross country (2-3 times a year) rather than an actual holiday.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1 (GF's HP Car - bought before we were together) I have no part in this vehicle (aside occasional fuel purchases)

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1350
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1400

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 35 (Phone)
Rent.................................... 330
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 7
Satellite/Cable TV...................... 35
Internet Services....................... 30
Groceries etc. ......................... 175
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 120
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 35
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 25
Emergency fund.......................... 25
Total monthly expenses.................. 1147

Assets
Cash.................................... 185
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 185

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 285......(35).......0 (Phone)
Total secured & HP debts...... 285.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC OD........................1000......0.........0
HSBC Loan......................8510......220.......3.3
HSBC CC........................4250......95........18.9
Argos..........................240.......40........0 (Oct 2019)
MBNA CC........................3275......35........0 (Aug 2020)
Barclaycard CC.................7650......190.......0 (Jan 2020)
Total unsecured debts..........24925.....580.......-

Monthly Budget Summary
Total monthly income.................... 1,400
Expenses (including HP & secured debts). 1,147
Available for debt repayments........... 253
Monthly UNsecured debt repayments....... 580
Amount short for making debt repayments. -327

Personal Balance Sheet Summary
Total assets (things you own)........... 185
Total HP & Secured debt................. -285
Total Unsecured debt.................... -24,925
Net Assets.............................. -25,025

If you've made it this far I am again very sorry but any help is much obliged.

sourcrates · 24 March 2019 at 9:51PM

Hi there,

Thanks for posting.

Don’t beat yourself up over the gambling, as long as it is now in the past, and you are receiving help for it, the OR won’t hold it against you.

Each case is decided on its own merits, a bankruptcy restrictions order may be imposed, if they think you may have brought this on yourself or you have not been honest, this may lengthen the time until discharge, it may not happen, but it could.

If you have more than £20 disposable income per month, you may get an income payment arrangement, it depends on your disposable income obviously.

Bankruptcy these days is a very simple process and really does not carry the stigma it once did, you can live a pretty normal life whilst bankrupt, you no longer have to go to court, it’s all done online and by post, it will effect you for 6 years, as will any debt solution, but after that, your file is clear again.

From your SOA you are in deficit every month so basically bankruptcy may be your best choice.

Annie35 · 24 March 2019 at 9:55PM

You would be best on the bankruptcy board. A money saving SOA is pretty much the exact opposite of a bankrupt soa. For instance increase your groceries, don't cut to the bone.

It costs 670£ to go BR.

You'll be in bankruptcy for 12m, it's this period you can't be a director but it's worth remembering a BR may not be able to do certain jobs (finance etc).

You've 253£ available a month (I think?) after expenses this will be given over to your official receiver probably for the next 3 years, this will be your BRU.

Investigate if a repayment option would workout with this amount instead. Pros/cons depending on your life & future plans

sourcrates · 24 March 2019 at 10:52PM

I will move to bankruptcy board for you.

Belgrave20 · 24 March 2019 at 11:07PM

Sourcrates & Annie - Thanks for taking the time to read, the information provided and moving the post, I had initially planned to post in BR forum but as I hadn't committed 100% to this option I was better off where I had originally posted.

Sorry for filling in the wrong SOA I didn't realise there was a difference honestly.

Yes I would guess I am somewhere around the £250 mark at the end of the month left over, I guess my concern with a DMP is the informality of it, the fact my creditors could call in the debt at any point (while I realise this is not in their best interest if I am making payments), it is something that turns me away from this.

Thanks again to you both

Annie35 · 25 March 2019 at 1:04AM

Oh it's not the format of the soa, it's just the debt free board will have you living on cracked wheat & beans & washing with air for 5 years & get you up to 500£ repayments a month. (Said flippantly &#55357;&#56833;) it's all about repaying over there & they do it well. It's where you want to be for repayment support.

Over here we prefer to draw a line & have a reasonable life, so no scrimping on the soa (not to be extravagant but it's ok to have haircuts & Netflix, many people come here to flog themselves, you don't have to here)

Here's best to ask about bankruptcy, how, why, when & it's effects, challenges & light at the end of tunnel stories.

Hang round both boards & see where you want to be.

Minkym00 · 25 March 2019 at 1:58PM

Annie is incorrect. An IPA Income Payments Agreement is where you pay your surplus income to the Official Receiver for 3 years - nothing to do with a BRO/BRU. A Bankruptcy Restrictions Order is applied for by the OR to the court due to a bankruptcy misconduct - is this case gambling. As the gambling is a material portion of your total debt then you should expect a BRO. A BRU is where you sign a Bankruptcy Restrictions Undertaking for a shorter amount of time than a BRO as it saves the effort of going to court (effectively you “plead guilty” for want if a better phrase). You might be looking at 6 years, or 5 for an undertaking. The restrictions on a BRO/BRU are the same restrictions you are under during your bankruptcy (no debt over £500 without disclosing bankruptcy, no directorships etc) and the bankruptcy will remain on your credit file for the length of the order/undertaking, plus an additional 5 years.

Annie35 · 25 March 2019 at 2:16PM

Oh I stand corrected, thank you Minkym00.

Belgrave20 · 25 March 2019 at 5:45PM

Annie is incorrect. An IPA Income Payments Agreement is where you pay your surplus income to the Official Receiver for 3 years - nothing to do with a BRO/BRU. A Bankruptcy Restrictions Order is applied for by the OR to the court due to a bankruptcy misconduct - is this case gambling. As the gambling is a material portion of your total debt then you should expect a BRO. A BRU is where you sign a Bankruptcy Restrictions Undertaking for a shorter amount of time than a BRO as it saves the effort of going to court (effectively you “plead guilty” for want if a better phrase). You might be looking at 6 years, or 5 for an undertaking. The restrictions on a BRO/BRU are the same restrictions you are under during your bankruptcy (no debt over £500 without disclosing bankruptcy, no directorships etc) and the bankruptcy will remain on your credit file for the length of the order/undertaking, plus an additional 5 years.

Thank you for this information, minky.

So from declaring myself BR, I would have 12 months of BR, (expect 3 years of an IPA), 5/6 years of a BRU/BRO, then 5 further years of being on the insolvency register beyond this, so 10 or 11 years all told.

Or have I misunderstood how it works?

sourcrates · 25 March 2019 at 6:11PM

Belgrave20 wrote: »

Thank you for this information, minky.

So from declaring myself BR, I would have 12 months of BR, (expect 3 years of an IPA), 5/6 years of a BRU/BRO, then 5 further years of being on the insolvency register beyond this, so 10 or 11 years all told.

Or have I misunderstood how it works?

No, you misunderstand, the years do not run concurently.

You are declared bankrupt on a certain date, and placed on the insolvency register, 12 months from that date, you are discharged, 3 months later you are removed from the IS.

IPA runs from the date of bankrupcy also (normally), if you get a BRO, same applies to that.

After 6 years it all drops off your credit file, so it will not normally affect you for more than 6 years in total.

Minkym00 · 26 March 2019 at 4:38PM

Not quite. A bankruptcy is 12 months. A BRO could be up to 15 additional years (depending on the seriousness of the misconduct) and the BRO remains on your credit files for a further 5 years. Otherwise what would be the point of a BRO longer than 5 years if it dropped off your credit file at that point whether you had a BRO or not???

An IPA is for 3 years but doesn’t necessarily start from the date of the bankruptcy - in can be put in place at any time during the 12 months of the bankruptcy and will run for 3 years from that point. Essentially though unless it’s in place within 9 months of the order it won’t happen as there wouldn’t be enough time to go court if the bankrupt refused to sign it.

Help please

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