Is there another option to bankruptcy?

Ember999 · 20 August 2005 at 1:37PM

Jaelor wrote:

Hi Ember - The sofa payment of £32.69 runs out in January and it was one of those niggly debts that I had completely forgotton about when doing the dreaded First Plus thing. The Egg card has crept up to £900 due to buying baby stuff - I now see that I could of shopped around, but I have capped my facility on Egg to a £1000 and have opted to pay £25 per month, its only £4 more than my oustanding balance, but its something.

Hubby is doing overtime at the moment, so I will get him to sort something out on the NTL front.

I do want to avoid bankruptcy at all costs - or at least give it a really good go for a year and see if I can somehow claw my way out of this.

Thanks all for your advice.

J

Thanks for your reply hon. I'm pleased you are going to try to avoid bankruptcy, much better for you and your whole family.
Good Luck and keep posting to let us know how you get on.

Ember xx

Xbigman · 20 August 2005 at 3:13PM

Have you seriously looked at bankruptcy? Who's name is the house in and who's name are the debts in? If there is a lot of secured debts in joint names you will probably lose the house. Second secured debt holders tend to panic and repossess a lot faster than the main mortgage holder in these circumstances so they are actually your biggest danger.
There is a lot more detail you need to look at in listing your debts and it is worth working it out and posting it in this thread.

Likewise you should do a complete budget. How much do you spend on food, cloths, car etc. You should do this so you can see exactly where you stand. If you don't know what you spend on things then start a spending diary. Understanding your budget and spending habits is very important and is the basis of all the decisions you will make later.

Once you have a budget you need to split it up into three sections. Priority debts are those things you must pay to live and keep the house. Non priority debts are those you don't need to pay. And lastly list your other debts.

Using your original list.

Priority
Mortgage £912.36
Council Tax £117
TV Lic. £10.49
House Insurance £28.46
First Plus £661.65
Electricity £34

Non priority
NTL £130
HP for Sofa £32.69
HP for Car £175 (might be a priority debt for now if needed for work)
Life Cover £50.46
Pet Plan £13.36

Unsecured debts
Egg Card £25.00
Cahoot £60.20

There is a lot of stuff missing from this list which you need to add in. Then you need to decide just how far you want to take it. If you are in a scenario of trying to keep your house then dump the pet insurance and give your pet away, sell it, whatever. Dump NTL completely. Buy a PAYG mobile and live without the extra TV for a few years. How much do you actually use the internet? Can you go through the library? The sofa is nearly paid for but how much of the car is left? Can you get rid of the car or is it needed for work? Can you hand it back and buy an old banger? Sell it and pay off the finance and downsize? (if you go bankrupt the HP company will probably repossess it).

Once you have a budget and trimmed everything ruthlessly you will know how much is left over. If you can pay your unsecured debts brilliant. If you are short then you need to get on to the lenders and try to negotiate a lower payment.

Looking at what you have posted so far it looks like you have been living above your means and run up some debts but you have not yet reached a bankruptcy position. You need to start budgeting, get rid of your cards and easy credit options and start only buying what you can afford.
Regards

X

homersimpson_3 · 20 August 2005 at 4:17PM

don't take anything you read on websites or chat forums as 'gospel'- check it out for yourself.(including things i say). which website was this so called 'debt counsellor' on? just because they say there's no other option does not mean it's the case- that's in his/her opinion- you're right to contact a professional organisation such as cab- they're reputable; can be sued and you actually see and judge the person for yourself.
now the practical advice-
1. bankruptcy should be avoided at all costs - not only could you lose everything but it has major implications on your ability to obtain credit etc in the future.
2. get rid of ntl- with this amount of debt you should be focusing on what you need (not want). why can't you sort it out? if you're going to take control of situation you need to understand how ntl works; exactly what you're paying for and where the money's going. ask hubby or ntl to explain it. what if hubby couldn't for whatever reason deal with it?
3. shop around for cheaper household insurance & life cover.
4. mortgage accounts for nearly 50% of income- can you move to cheaper house and use some money from sale to clear some of debts?
5. if car needed for hubby's job, why is work not paying for it. can hubby claim expenses?
6. ask friends/family for baby stuff- don't buy all new- the baby doesn't even understand what's second hand is and is only in clothes for a few months. after baby stuff no longer required sell them & use money to repay debts.
7. make sure you join all clubs for babies/toddlers etc to get all possible discounts and freebies. all the points add up.
8. 137 per week is plenty to live for a family of 3. (some people live off 15 per week. 2 adults at 15 per week = 30 so that still leaves 107 for baby. whilst babies are expensive 107 seems enough).
9. target all overtime money to clearing debt.
10. can you do work from home (e.g. ironing, baby sitting or whatever)

Is there another option to bankruptcy?

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