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  • FIRST POST
    • MarkMr
    • By MarkMr 6th Aug 18, 4:24 PM
    • 10Posts
    • 8Thanks
    MarkMr
    20k in debt is it easier to just go bankrupt?
    • #1
    • 6th Aug 18, 4:24 PM
    20k in debt is it easier to just go bankrupt? 6th Aug 18 at 4:24 PM
    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?
Page 1
    • Willing2Learn
    • By Willing2Learn 6th Aug 18, 4:29 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    • #2
    • 6th Aug 18, 4:29 PM
    • #2
    • 6th Aug 18, 4:29 PM
    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
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • MarkMr
    • By MarkMr 6th Aug 18, 5:31 PM
    • 10 Posts
    • 8 Thanks
    MarkMr
    • #3
    • 6th Aug 18, 5:31 PM
    • #3
    • 6th Aug 18, 5:31 PM
    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
    • By MallyGirl 6th Aug 18, 5:34 PM
    • 3,001 Posts
    • 8,006 Thanks
    MallyGirl
    • #4
    • 6th Aug 18, 5:34 PM
    • #4
    • 6th Aug 18, 5:34 PM
    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.
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards 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 inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    Any views are mine and not the official line of MoneySavingExpert.com.
    • brewthebear
    • By brewthebear 6th Aug 18, 5:35 PM
    • 168 Posts
    • 176 Thanks
    brewthebear
    • #5
    • 6th Aug 18, 5:35 PM
    • #5
    • 6th Aug 18, 5:35 PM
    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
    • By ReadingTim 6th Aug 18, 5:52 PM
    • 2,993 Posts
    • 4,429 Thanks
    ReadingTim
    • #6
    • 6th Aug 18, 5:52 PM
    • #6
    • 6th Aug 18, 5:52 PM
    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.
    Last edited by ReadingTim; 06-08-2018 at 5:54 PM.
    • Smellyonion
    • By Smellyonion 6th Aug 18, 6:01 PM
    • 136 Posts
    • 85 Thanks
    Smellyonion
    • #7
    • 6th Aug 18, 6:01 PM
    • #7
    • 6th Aug 18, 6:01 PM
    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
    • By Willing2Learn 6th Aug 18, 6:06 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    • #8
    • 6th Aug 18, 6:06 PM
    • #8
    • 6th Aug 18, 6:06 PM
    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
    Originally posted by MarkMr
    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.
    Last edited by Willing2Learn; 06-08-2018 at 6:16 PM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • MarkMr
    • By MarkMr 7th Aug 18, 9:55 AM
    • 10 Posts
    • 8 Thanks
    MarkMr
    • #9
    • 7th Aug 18, 9:55 AM
    • #9
    • 7th Aug 18, 9:55 AM
    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
    Last edited by MarkMr; 07-08-2018 at 9:55 AM. Reason: add detail
    • Willing2Learn
    • By Willing2Learn 7th Aug 18, 9:59 AM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    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?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • ReadingTim
    • By ReadingTim 7th Aug 18, 10:45 AM
    • 2,993 Posts
    • 4,429 Thanks
    ReadingTim
    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.
    • Oakdene
    • By Oakdene 7th Aug 18, 10:53 AM
    • 2,443 Posts
    • 8,831 Thanks
    Oakdene
    I note you have a child living with you, but no child benefit. Do they live with you full time?
    Dwy galon, un dyhead,
    Dwy dafod ond un iaith,
    Dwy raff yn cydion ddolen,
    Dau enaid ond un taith.


    • fatbelly
    • By fatbelly 7th Aug 18, 12:15 PM
    • 12,805 Posts
    • 9,877 Thanks
    fatbelly
    To answer your first question, I wouldn't see this as a bankruptcy situation, at least not at the moment. You would probably lose your car and have an Income Payment Arrangement of 500 x 36, and there is a 680 fee.

    You may need a debt management plan if you can't turn this around but it doesn't look like a disaster to me. Your spending is not too bad but I would use all the resources on this site next time your car insurance renewal comes around. Your soa does need something for car maintenance, and the miscellaneous things at the end of the list.

    If you can get 0% deals you can juggle credit cards and let your monthly payment reduce your debt by that amount.

    Interesting that your monthly shortfall is 86 and that is the amount of child benefit for one child is about that.
    • Oakdene
    • By Oakdene 7th Aug 18, 12:25 PM
    • 2,443 Posts
    • 8,831 Thanks
    Oakdene
    With the exception of checking to ensure you are receiving the 25% discount for single adult occupancy for council tax, I don't really see where you can save.

    The groceries is about right, though could you try shopping at Lidl/Aldi if you don't already?
    Dwy galon, un dyhead,
    Dwy dafod ond un iaith,
    Dwy raff yn cydion ddolen,
    Dau enaid ond un taith.


    • MarkMr
    • By MarkMr 7th Aug 18, 12:59 PM
    • 10 Posts
    • 8 Thanks
    MarkMr
    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?
    Originally posted by Willing2Learn

    Thanks, the debts are credit cards. One has a 14k limit, the other two are at their max 8k limit.



    I don't think 0% juggling is possible with my current low credit rating.
    • MarkMr
    • By MarkMr 7th Aug 18, 1:02 PM
    • 10 Posts
    • 8 Thanks
    MarkMr
    I note you have a child living with you, but no child benefit. Do they live with you full time?
    Originally posted by Oakdene

    Just at the weekend. I was self employed previously to getting this job.



    With the exception of checking to ensure you are receiving the 25% discount for single adult occupancy for council tax, I don't really see where you can save.

    The groceries is about right, though could you try shopping at Lidl/Aldi if you don't already?
    Originally posted by Oakdene

    I am getting the 25% single person discount. I already shop at aldi. I generally live quite frugally. Hardly ever eat out or spend on clothing that isn't an immediate need.
    • Oakdene
    • By Oakdene 7th Aug 18, 1:05 PM
    • 2,443 Posts
    • 8,831 Thanks
    Oakdene
    Just at the weekend. I was self employed previously to getting this job.






    I am getting the 25% single person discount. I already shop at aldi. I generally live quite frugally. Hardly ever eat out or spend on clothing that isn't an immediate need.
    Originally posted by MarkMr

    Ok, I think you can shave a fair chunk off the groceries then. My teenage daughter lives with me full time & my son comes every other weekend, I tend to spend 30 a week on groceries, which includes toiletries & cleaning products.
    Dwy galon, un dyhead,
    Dwy dafod ond un iaith,
    Dwy raff yn cydion ddolen,
    Dau enaid ond un taith.


    • Willing2Learn
    • By Willing2Learn 7th Aug 18, 1:12 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    Thanks, the debts are credit cards. One has a 14k limit, the other two are at their max 8k limit.



    I don't think 0% juggling is possible with my current low credit rating.
    Originally posted by MarkMr
    You may have some wiggle room.

    Here, have a look at the MSE article Balance Transfer Credit Cards Up to 36mths 0%, 2.49% fee.


    There is an eligibility checker within the article. Give it a go. It only records a 'soft' search on your credit report so as not to have a negative impact. If you can squeeze a 0% for 3 years, that would give you an opportunity to significantly reduce the unsecured debt.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • sourcrates
    • By sourcrates 7th Aug 18, 1:12 PM
    • 15,513 Posts
    • 14,598 Thanks
    sourcrates
    Ok, I think you can shave a fair chunk off the groceries then. My teenage daughter lives with me full time & my son comes every other weekend, I tend to spend 30 a week on groceries, which includes toiletries & cleaning products.
    Originally posted by Oakdene
    What do you eat ?
    Seriously you have to live, and 30 is very low, twice that amount would still be low.
    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/
    • D_M_E
    • By D_M_E 7th Aug 18, 1:15 PM
    • 1,883 Posts
    • 66,415 Thanks
    D_M_E
    Water for one person seems high - is that on a meter?

    Is the council tax over 10 months? If so, ask council if you can pay over 12 months.

    Nothing for entertainment - what about day out when the child comes to visit?

    EDIT - there's not many SOA's on the forum with a low mobile bill such as yours - but is it contract or is this the total on a PAYG SIM?
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