£20k in debt is it easier to just go bankrupt?

MarkMr · 6 August 2018 at 4:24PM

Hi Have about £20k in credit card debt. It's managable at the moment, as I have just gotten a new job. This pays around £23k a year.

Is it easier to just go bankrupt and write off the £20k debt? I don't own a company, my credit rating is already poor due to the debt (around 378).

What are the bennefits of actually paying the debt back?

Willing2Learn · 6 August 2018 at 4:29PM

Hi Mark and welcome to the forum.

"Is it easier to just go bankrupt and write off the £20k debt?"
That all depends on your overall state of affairs.

If you complete a Statement of Affairs (SOA) and post it here then people will be able to give good advice.

http://www.stoozing.com/calculator/soa.php
Please click on the 'Format for MSE' button at the bottom of the form

MarkMr · 6 August 2018 at 5:31PM

Ok apparently I can't post links to screen shots yet as I'm a new user but add https to the start of this and you should see it

/i.imgur.com/Y4ih7Vs.png

MallyGirl · 6 August 2018 at 5:34PM

Hi

you really need to do this:

http://www.stoozing.com/calculator/soa.php
Please click on the 'Format for MSE' button at the bottom of the form

as your picture doesn't hold enough detail to let anyone help.

You need to break out the costs/debts anbd quote APRs etc.

brewthebear · 6 August 2018 at 5:35PM

Benefits of paying back what you owe !! Surely thats an obvious answer you borrowed the money and now you want to go bankrupt so the debt does not have to paid Thats what it sounds like to me

ReadingTim · 6 August 2018 at 5:52PM

Morality aside, going bankrupt isn't the easy option - it'll pretty seriously mess up your life for the best part of 10 years in terms of getting credit - and I don't just mean loans or a mortgage - mobile phone contracts, gym memberships, even gas and electricity supply may be off limits, or require (more expensive) prepayment. It may cause issues for the rest of your life, and could even prevent you from taking certain jobs or careers.

But if attempting to repay the amount owned would take longer, or ultimately never be realistic, then bankruptcy may be the least bad option.

People on this board have repaid larger sums than the amount you owe, but without more info (a statement of affairs or SOA), no-one can say what's best in your circumstances. It also depends on what your financial plans for the long-terms future are, as that might have an influence on which route you take.

Smellyonion · 6 August 2018 at 6:01PM

If you clear it within a few years, it's not worth going bankrupt. The longterm effect will have implications for life in some instances.

Willing2Learn · 6 August 2018 at 6:06PM

MarkMr wrote: »

Ok apparently I can't post links to screen shots yet as I'm a new user but add https to the start of this and you should see it

/i.imgur.com/Y4ih7Vs.png

That is no good

We need all of the form, in all its glory

Here, see the image below. I've circled the 'format for MSE' button for you. Just click it, wait a few seconds, then the screen will be formatted it for you. Then follow the instruction to copy and paste.

MarkMr · 7 August 2018 at 9:55AM

Ok here it is in the correct format!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 530
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 9
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 23
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 120
Road tax................................ 12
Car Insurance........................... 70
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1186

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1200
Other assets............................ 0
Total Assets............................ 1200

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
(Unnamed debt).................8000......200.......17.5
(Unnamed debt).................8000......200.......17.5
(Unnamed debt).................8000......200.......17.5
Total unsecured debts..........24000.....600.......-

Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 1,186
Available for debt repayments........... 514
Monthly UNsecured debt repayments....... 600
Amount short for making debt repayments. -86

Personal Balance Sheet Summary
Total assets (things you own)........... 1,200
Total HP & Secured debt................. -0
Total Unsecured debt.................... -24,000
Net Assets.............................. -22,800

The unnamed debts are credit cards

Willing2Learn · 7 August 2018 at 9:59AM

Hello again. Well done on the formatting!!!

The three unsecured debts. Are they loans or cards? If they are cards, what is your combined total credit limit?

ReadingTim · 7 August 2018 at 10:45AM

If you're able to sell the car, move into somewhere cheaper, and get a evening/weekend part-time job or a better paying main job, you can make a significant dent in this.

You're going to have to make some fairly significant changes to your lifestyle to live within your means going forward, especially if those 3 credit card debts were incurred on general spending, rather than anything specific; but I don't think this is an amount worth going bankrupt over.

£20k in debt is it easier to just go bankrupt?

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