Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Rosebud19
    • By Rosebud19 21st Apr 17, 12:13 AM
    • 7Posts
    • 4Thanks
    Rosebud19
    Advice needed
    • #1
    • 21st Apr 17, 12:13 AM
    Advice needed 21st Apr 17 at 12:13 AM
    Hi, I desperately need some advice regarding my debts and the best options available to me. I have contacted Stepchange and the adviser was great, but before I accept their advice, I wanted to get other people's opinions on my best course of action.

    In short, I owe almost £80,000 in unsecured debts. I sold my house (no equity, I was a Northern Rock Together mortgage fool who agreed a 5 year fixed term mortgage exactly one month before they went bust!) in December 2016 and at the same time I agreed a settlement with my employer after being signed off with stress 3 months earlier. I am currently interviewing for a new roles but the whole process is taking a lot longer that I anticipated.

    I have carried debt around since my first job after uni, 20 years to be exact. I have consolidated loans in the past too. Ironically for such a huge debt with five different creditors, I have an excellent/good credit score albeit with a high percentage borrowing mark against my name. I have never missed a payment on any of my loans or mortgage when I had one, never had a CCJ or anything. I fought hard to keep my payments up, taking better paid and more senior roles to keep up with payments.

    I have used every penny of my settlement to pay £2600 each month to cover my debts, rent and bills since I left work and now it has all gone, bar £400 left in my current account. I can't pay anymore, I just don't have the money available.. I have no income or savings, just an new claim for Universal Credit which I applied for yesterday which will pay me approximately £923 every month until I return to work, hopefully very soon, but my first payment won't be processed until end of May 2017. I have run out of options and I have to take drastic action, preferably before 24 April 2017 when all my bills and debts are due to be paid.

    My preference is bankruptcy. I can't face another 5-7 years of trying to manage these debts. I honestly believe the stress will finish me off. It's no coincidence that I am prescribed maximum medication for stress and anxiety and haverecently started experiencing panic attacks

    Has anyone had a similar experience or are there any professional debt advisers on the forum willing to talk to me?

    Thanks in advance.

    Rosebud19
Page 1
    • LEK
    • By LEK 21st Apr 17, 2:54 PM
    • 83 Posts
    • 41 Thanks
    LEK
    • #2
    • 21st Apr 17, 2:54 PM
    • #2
    • 21st Apr 17, 2:54 PM
    Hi there,

    Sorry to hear that you've fallen on what appears to be hard times, and especially with somewhat of a high personal debt against your name.

    I know the feeling with regards to carrying out a lot of debt for years and years on end, I've been there myself and I'm still only young (late 20's). Though you live and learn as they say, and I certainly did (well, still learning as I go along!). Just a bit of background into my story.

    I went bankrupt in July 2016 with debts totalling to £20,000 that were spread across 5 creditors. These were basically a couple of loans, a credit card, a small HMRC tax credits claim and a mobile phone contract. My debt first started and stemmed back to 2009 when I had to take a loan out on a new car, and as the years have gone by the borrowing slowly increased for a variety of reasons and life changes.

    In July 2015 my debts pretty much peaked and I had no option but to then enter a DMP as my monthly outgoings on debts was getting more ridiculous, and I was paying out more on them than what I was in rent and utility bills combined. The DMP worked well but as a result my credit report took a leap due to a couple of the creditors defaulting on the DMP arrangements which in a way was expected but it kept the payments lower.

    Fast forward to around June last year, me and my partner discovered that we were going to be expecting our first baby which was wonderful and exciting news... however, not long after my Mrs lost her job unfortunately and as a result we both had to solely rely on my income. At the same time it suddenly dawned on me that it was in a way time for me to clean up my act and grow up in a number of ways - one of which and most importantly was financially, I was also finally sick of carrying around the burden of debt around constantly and having to scrimp and scrape every month just to tie me over. With bringing a baby into this world and having to manage financially, I had to sort it out otherwise it wouldn't work. I researched into bankruptcy thoroughly for weeks, obtained advice from various places, made preparations, saved up for the bankruptcy fee, had a couple of sleepless nights of deliberation before then filling out the form online and then submitting it off.

    Since then things have got steadily easier, and in back in Feb my Mrs gave birth to a lovely little girl. Financially I have learned a lot since and I have changed my ways for the better, and I aim to never get in silly debt ever again. In fact I have said to myself that if I do get in any form of debt in the future - it will only be for a mortgage, years after my bankruptcy is behind me. Nothing else.

    Applying for the bankruptcy was fairly straight forward online, I was approved the next day, then followed a telephone conversation with my appointed official receiver a couple of days later to confirm things and to get the ball rolling.

    In my case and circumstances financially, I have not been subjected to a 3 year IPA so far (I'm still just over 2 months away from my discharge date, my official receiver could still impose one before the discharge date if they wished though they informed me at the beginning that for me it would be very unlikely). However, they did put me on an NT tax IPA arrangement instead at the beginning where the tax on my earnings is paid to the Insolvency Service until the next tax year, in turn the contribution is spread & shared out to my creditors (I've literally just completed it), and then after that you start paying tax on your earnings again.

    My advise for yourself would be to study and research thoroughly into the bankruptcy before you proceed, the downsides that may follow, the positive side to it as well, how it may affect your way of living moving forward as you won't be able to obtain any more suitable credit / lending for the best part of up to 6 years, and most importantly - the restrictions / rules that may be put in place while being bankrupt (if you do go bankrupt, your official receiver will advise on this and anything else that you need answering to be sure).

    Keep us informed on how you get on as time goes on.

    Liam.
    Last edited by LEK; 21-04-2017 at 3:05 PM.
  • National Debtline
    • #3
    • 21st Apr 17, 3:01 PM
    • #3
    • 21st Apr 17, 3:01 PM
    Hi Rosebud19 and welcome to MSE,


    This is a difficult situation and debt can be stressful to deal with. If you don't feel up to doing new payment plans and dealing with creditors then bankruptcy is most likely the best solution. However, I will mention that there are free Debt Management Plan (DMP) providers and reputable IVA providers who can help and take some of the pressure off you.


    You should call one of the free debt charities for full advice so you are aware of all the choices (and how things may change if/ when you were to return to work). In a nutshell bankruptcy costs £680 and you can apply online. Once the forms are submitted the adjudicator has 28days to decide whether the application is successful. If you are declared bankrupt then it will normally last for 12months and you will have certain restrictions on you during that time. Any assets such as property, vehicles, savings etc would be at risk. Bankruptcy is obviously very damaging to a persons’ credit file. It would be very damaged for 6 years but can affect your ability to get credit in the future.


    In bankruptcy your income and expenses will be assessed – if you have more than £20per month disposable money then they can take 100% of the disposable money for up to 3 years under an Income Payment Arrangement (IPA). This won't be applicable from universal credit. I hope that helps,


    Laura
    @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
    • fatbelly
    • By fatbelly 22nd Apr 17, 3:24 PM
    • 12,714 Posts
    • 9,775 Thanks
    fatbelly
    • #4
    • 22nd Apr 17, 3:24 PM
    • #4
    • 22nd Apr 17, 3:24 PM
    Rosebud, from what you say in your post, bankruptcy is the option.

    Read up on it - National Debtline have a factsheet here

    and Debt Camel who is a CAB debt specialist, like me, has info here:

    https://debtcamel.co.uk/debt-options/bankruptcy/

    and here (but note the fee is now £680)

    https://debtcamel.co.uk/debt-options/bankruptcy2/
    Last edited by fatbelly; 22-04-2017 at 3:26 PM.
    • Rosebud19
    • By Rosebud19 22nd Apr 17, 6:16 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    • #5
    • 22nd Apr 17, 6:16 PM
    • #5
    • 22nd Apr 17, 6:16 PM
    Thank you.
    • Johnsmith2016
    • By Johnsmith2016 23rd Apr 17, 10:09 PM
    • 436 Posts
    • 224 Thanks
    Johnsmith2016
    • #6
    • 23rd Apr 17, 10:09 PM
    • #6
    • 23rd Apr 17, 10:09 PM
    Bankcruptcy i would say.

    My rule of thumb is if it's going to take you longer than 6yr to repay via other methods, you have no assets to protect and it's more than 20k then bankcruptcy is usually the best option.

    DMP - will be something silly like 15yrs to repay
    Iva - no job, no assets, can fail
    DRO - your debt is more than 20k

    So bankcrupty seems best. Read up get your ducks in order plan it before doing it, if your off work you won't get a IPA - you may get one once you start earning, if you could take 12 months out to train/college etc you can avoid the 3yr IPA .
    • Rosebud19
    • By Rosebud19 23rd Apr 17, 10:23 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    • #7
    • 23rd Apr 17, 10:23 PM
    • #7
    • 23rd Apr 17, 10:23 PM
    Appreciate all the guidance. I'm in the process of filling out my online application for bankruptcy. I've cancelled all the creditor direct debits that are due to be paid tomorrow and I have written to them all this weekend to say I'm having financial difficulties and can pay them all a pound while I sort my life out.

    Expecting the calls to start tomorrow ��
    • sourcrates
    • By sourcrates 23rd Apr 17, 10:56 PM
    • 15,304 Posts
    • 14,394 Thanks
    sourcrates
    • #8
    • 23rd Apr 17, 10:56 PM
    • #8
    • 23rd Apr 17, 10:56 PM
    Appreciate all the guidance. I'm in the process of filling out my online application for bankruptcy. I've cancelled all the creditor direct debits that are due to be paid tomorrow and I have written to them all this weekend to say I'm having financial difficulties and can pay them all a pound while I sort my life out.

    Expecting the calls to start tomorrow ��
    Originally posted by Rosebud19
    Barr the numbers on your phone, write and insist on contact in writing only, they will comply with that.

    Good luck.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • wildheart83
    • By wildheart83 24th Apr 17, 7:39 AM
    • 714 Posts
    • 352 Thanks
    wildheart83
    • #9
    • 24th Apr 17, 7:39 AM
    • #9
    • 24th Apr 17, 7:39 AM
    I'd do as much reading as you can, keep a notepad handy so that you can jot down any questions that pop into your head and I'd agree with blocking numbers. Some of my creditors were fine, others less so - even when I'd already gone BR.

    It's also worth setting up a new bank account for a fresh start and look at the T&Cs in your insurances in case they have a no BR clause in there.

    Good luck, it really is a blessed relief once it's all done
    • Rosebud19
    • By Rosebud19 7th May 17, 11:36 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    Well, I've done it.

    I submitted my form, it was approved the next day and less than a week later I had a call with someone from the Official Receivers office.

    I thought he was calling to make an appointment for face to face meeting but the phone call covered everything in less than 45 mins.

    After the call I was in shock, I felt completely numb and later that day I cried tears of relief. I still can't believe I did it.

    I'm not proud of being bankrupt and its most definitely not an easy way out, but I struggled for over 15 years trying to manage my debts alone, trying to make ends meet and always believing I'd pay them off myself. My health was badly affected by the stress of it all. After I lost my job, I got to the stage where my money ran out and I just couldn't pay. The best thing I did was to speak to StepChange. Their advice helped me enormously.

    Thanks to all those who took time to send me advice and guidance.

    Rosebud ��
    • fatbelly
    • By fatbelly 8th May 17, 6:51 AM
    • 12,714 Posts
    • 9,775 Thanks
    fatbelly
    Well, I've done it.

    I submitted my form, it was approved the next day and less than a week later I had a call with someone from the Official Receivers office.

    I thought he was calling to make an appointment for face to face meeting but the phone call covered everything in less than 45 mins.

    After the call I was in shock, I felt completely numb and later that day I cried tears of relief. I still can't believe I did it.

    I'm not proud of being bankrupt and its most definitely not an easy way out, but I struggled for over 15 years trying to manage my debts alone, trying to make ends meet and always believing I'd pay them off myself. My health was badly affected by the stress of it all. After I lost my job, I got to the stage where my money ran out and I just couldn't pay. The best thing I did was to speak to StepChange. Their advice helped me enormously.

    Thanks to all those who took time to send me advice and guidance.

    Rosebud ��
    Originally posted by Rosebud19
    Well done, Rosebud
    • Rosebud19
    • By Rosebud19 14th Apr 18, 9:45 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    Rebuilding my credit as discharged bankrupt
    Hello,

    Iím counting down the days until my bankruptcy ends. Itís been a horrific 12 months and I know I have another 6 years to carry the burden of bad credit rating, but just knowing Iíve got through the actual bankruptcy period will help me breathe a little easier again.

    Providing all is ok and I am discharged as planned, I really want to rebuild my credit rating up again and would appreciate any guidance. Prior to bankruptcy and somewhat ironically, I had an excellent credit rating, albeit I had a high rate of borrowing. I never missed a payment in 20 years. Feel free to read my previous post if you want to know how I ended up here.

    Anyway, I have an email ready to send to the Insolvency Service as soon as I am discharged asking for certificate of discharge to send to Experian, Equifax and the other credit agency I canít quite recall just now.

    Should I apply for a credit building credit card once discharged? Can anyone recommend which one I should apply for?

    I had to sell my car as part of the bankruptcy and the old banger I have now is definitely on its last legs! Will I ever be able to get a half decent rate on a loan again to get something a little more roadworthy?

    Thanks in advance

    Rosebud
    • TheGardener
    • By TheGardener 14th Apr 18, 9:59 PM
    • 2,433 Posts
    • 2,365 Thanks
    TheGardener
    Sorry to hear you didn't have a good time of it - I have to say my BR year was a huge relief after years of stress and worry.

    It usually take a couple of months for the credit files to update - then follow the advice on the sticky post at the top of this board about the file clean up process.

    Loans - hummm - TBH you at not going to get one any time soon - well, not at a reasonable rate of interest. Is there anyone who can help you with a vehicle?
    • Rosebud19
    • By Rosebud19 14th Apr 18, 10:40 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    Thanks for your reply.

    Not sure I have anyone I can ask for a loan but Iíll see how long my current vehicle holds out!

    I canít wait to be discharged. Psychologically and emotionally itís going to be a huge milestone for me!
    • fatbelly
    • By fatbelly 15th Apr 18, 5:09 AM
    • 12,714 Posts
    • 9,775 Thanks
    fatbelly
    Hello,

    Iím counting down the days until my bankruptcy ends. Itís been a horrific 12 months and I know I have another 6 years to carry the burden of bad credit rating, but just knowing Iíve got through the actual bankruptcy period will help me breathe a little easier again.

    Providing all is ok and I am discharged as planned, I really want to rebuild my credit rating up again and would appreciate any guidance. Prior to bankruptcy and somewhat ironically, I had an excellent credit rating, albeit I had a high rate of borrowing. I never missed a payment in 20 years. Feel free to read my previous post if you want to know how I ended up here.

    Anyway, I have an email ready to send to the Insolvency Service as soon as I am discharged asking for certificate of discharge to send to Experian, Equifax and the other credit agency I canít quite recall just now.

    Should I apply for a credit building credit card once discharged? Can anyone recommend which one I should apply for?

    I had to sell my car as part of the bankruptcy and the old banger I have now is definitely on its last legs! Will I ever be able to get a half decent rate on a loan again to get something a little more roadworthy?

    Thanks in advance

    Rosebud
    Originally posted by Rosebud19
    The third agency is Callcredit.

    Yes, use an eligibility checker to get accredit card but pay it off in full each month. It'll be Capital One, Aqua or Vanquis most likely though there are a couple of other poor credit credit cards.

    Finance on cars is a little easier to get as the lending is secured to some extent. However, I'd be cautious about that. If you can save monthly while you keep the old one going that is better.
    • Rosebud19
    • By Rosebud19 15th Apr 18, 5:15 PM
    • 7 Posts
    • 4 Thanks
    Rosebud19
    Thanks again for your advice FB! X
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,435Posts Today

7,774Users online

Martin's Twitter