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Is BR for me?

Teddyuk85
Teddyuk85 Posts: 24 Forumite
in Bankruptcy & living with it
Hi everyone,

I could really really do with some advice as I am constantly thinking about this.

I have gotten myself into a right mess financially from being stupid over the years.

I have the following debts

Loan that ends next year with £3800 outstanding

Loan with £12500 outstanding for another 4 years

Credit card with a balance of £9500

Credit card with £2700 on it

Credit card with £1900 on it

My car which has 1 years finance left on it £120

And finally I pay my mum £320 a month for £11000 she lent me.

My payments equate to over £1300 a month.

With my line of work I get a bonus some months, however when I don't, my wage does not over my outgoings (including rent, bills etc) and o rely on money that my partner gives me to cover half the household bills. However if I get paid my basic salary that leave me with £50 a week to live off, for food, petrol etc etc.

I am on a good salary, just short of 30k a year and my partner works part time but takes on extra hours where possible.

I really don't know what to do.

I am registered diabetic, and I am worried they will tell me I can't have the gym membership (£20 a month) or take my car away which I rely on for work. My car is worth less than £2000 but would they take it away with a years left on the finance?

Also I was wondering what amount they would consider to leave me with to live on after being accepted for bankruptcy? What is the norm? As I'm on a good wage I don't know how it would work?

Would you consider my case as a BR case?

I would appreciate any help were possible. Part of me thinks wait a year until one of my loans is clear and my car is paid as it frees me up £400 a month but it's really a struggle at the moment that I cannot have any sort of quality of life on the money I am left with.

Plus it worries me my health will be affected being diabetic?

Any advice is appreciated
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Comments

  • worriedmamma
    worriedmamma Posts: 159 Forumite
    Fifth Anniversary Combo Breaker
    Hi there

    Firstly, take a deep breath. You aren't the first or last person to be in trouble financially. I would recommend you visit StepChange or National Debtline websites or call them, they would be able to look into your income and expenses and work out the best way to manage your debt.

    With regards to a car, I believe at the moment you get a £1000 car allowance, but each case is different so would depend on your specific circumstances.

    As your debt is over £20k, bankruptcy would be the way to go, if it was under £20k there is a Debt Relief Order which is sort of a mini-bankruptcy.

    However it really depends on your actual income and expenditure and your living arrangements etc.

    I really would urge you to contact StepChange or National Debtline, I found speaking to them so reassuring and I've felt a weight lifted since beginning to take control. Best of luck.
  • Flyright
    Flyright Posts: 424 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    edited 19 September 2016 at 12:43PM
    You would not be permitted to pay anything to your Mum if you went bankrupt as this debt would also be included in the bankruptcy.
  • Teddyuk85
    Teddyuk85 Posts: 24 Forumite
    Hi there,

    How would that work!?

    If my mum has taken a loan for me but in her name, it is not included in my costs. So would I be allowed to continue paying my mum.

    I am a bit confused about that
  • Flyright
    Flyright Posts: 424 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    edited 19 September 2016 at 2:12PM
    If your Mum took out a loan in her name then it is her debt, legally. You will not be allowed to make payments to cover your mother's debt (irrespective of whether she incurred it to fund something for you) if you went bankrupt. It is not your debt.

    In bankruptcy, any spare funds you have after paying your essential expenses (a payment to your mother's debt will not be considered essential expenditure) will be claimed via an IPA.
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi Teddy


    I just wanted to back up what Flyright is saying here. It doesn't matter that you may have been the "beneficiary" of your mother's loan, I'm afraid - she is still seen as being the only person liable to repay it and so you would not be allowed to maintain repayments to her if you went bankrupt.


    Either way, the current state of affairs can't continue as you can't try to maintain monthly repayments of £1300 on a £30K salary. Please take worriedmamma's advice to contact one of the debt charities as she too was very anxious about things before getting some expert guidance.


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Teddyuk85
    Teddyuk85 Posts: 24 Forumite
    Thanks for all the advice.

    So basically I cannot go bankrupt without leaving my mum with a debt.....

    Would I not be able to explain and still make payments at all?!?!

    If not it looks like I'm going to have to somehow continue as I am and end up in even more of a mess down the line....
  • Flyright
    Flyright Posts: 424 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    No, your Mum's debt was incurred by your Mum and there is no way any OR will allow you to continue making repayments to her when that amount could be claimed as part of an IPA to benefit your bankruptcy estate.
  • Teddyuk85
    Teddyuk85 Posts: 24 Forumite
    I'm sorry if I sound stupid, but what do you mean by "claimed as part of an IPA" ?? What's an IPA
  • tigerfeet2006
    tigerfeet2006 Posts: 14,030 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    An IPA ( individual payment agreement) is when any surplus income after your reasonable living costs have been agreed by the official receiver is paid to the insolvency service.

    Please ring National Debtline or Stepchange and let them go through your circumstances with you. They may come up with other options for helping you keep your head above water. Please don't panic just yet.
    BSCno.87
    The only stupid question is an unasked one
    Loving life as a Kernow Hippy
  • Teddyuk85
    Teddyuk85 Posts: 24 Forumite
    Thank you I'll give them a call tomorrow and let everyone know how I got on
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