To declare myself bankrupt?

[gardentrent]

I'm 22 and a university student, due to a cock up with student finance last year I had no income from September-May, I took out loans to pay the bills for me and DS (including childcare).

I'm in about £10000 worth of debt and with the cost of living etc. I have not made any payments apart from my rent in the past three months. I cannot afford them and they are just mounting and mounting.

I'm at the point where I think bailiffs are imminent. I'm a single parent.

I am seriously considering declaring bankruptcy.

There's no way I'd be able to take out a mortgage in the next six years anyway.

It's keeping me up at night, I don't feel like eating, every second I am stressed about this. I'd just really like a fresh start/clean slate.

OP, use a well-known charity that can help, like StepChange or Christians against Poverty to get specific advice for your situation, it may not require full bankruptcy at all, which would give you a small amount to live on for many years. They will go through the options, so you pay priority debts (e.g. council tax) but the others are offered token payments. Please get advice from the specialists on this, and don't refinance with another company. you can do it- I have clawed myself out of worse debt than that, and it did stop the sleepless nights.

Sorry you're in this situation. I would suggest you call stepchange. They will go through your finances and advise you the best next steps and support you with them. It's free and impartial.

It sounds worth doing in your circumstances. Look into all the ramifications, and if it's cost effective just do it. These greedy people should have loaned you money in the first place.

www.stepchange.org/

Sorry you are in a tough situation. I’d recommend going to an independent advice service like the Citizens Advice Bureau or Step Change and get personalised advice on your debt situation. If bankruptcy is the right option for you (and it sounds like it might well be) they can help with that too. I don’t think any student loans will be included though.

Hi there. Get in contact with citizens advice bureau or money works (government kind of finance help place) and speak to student services. Get as much practical support as possible so that you’re being proactive with this issue. If you don’t, it’ll become a monster in your mind. These organisations won’t relieve the obligation to pay but they can give you support to tackle all the issues and ensure you are making arrangements to pay; they will also help you claim whatever you are entitled to.

You are going to be ok. It might look bleak right now but you’ll get through this

My post only had a link to the StepChange website on it, not something terrible! you can google that yourself, and start to read up about how they can help you, it might make you feel better tonight for starters. This is solvable, don't worry.

Please call step change. For 10k an IVA would likely be a far better option for you but they'll be able to help.
There is an immediate stop to letters calls and bailiffs with an IVA so the pressure relief is insane
It stays on your file for 6 years anyway as a bankruptcy but in my experience it could be a better option.
Please make the call, it's horrid and scary but you'll feel so much better when you're in control of the situation

My post only had a link to the StepChange website on it, not something terrible! you can google that yourself, and start to read up about how they can help you, it might make you feel better tonight for starters. This is solvable, don't worry.

If you really can't see a way to paying this off in a reasonable time then that's what insolvency is there for.

Have you spoken to the companies? Unless you have assets they'll know they can only take what you can afford to pay and will accept a token payment, then you wouldn't need to worry about bailiffs.

I know several people who struggled for years making minimal payments, then struggled with ivas, then went bankrupt. All were very relieved it was over.

Talk to a charity first though, get help with what to do for the best even if you're going bankrupt eg you need to get a pile of cash together because they'll freeze your accounts and it'll take a while to sort out.

Good luck with it all. You won't be the only one.

Have you thought about future careers as a uni student. If you declare yourself bankrupt or have an Iva then some careers will be closed off to you.
A debt management plan may be a better option. You still have to pay the whole amount back but does not necessarily have the same impact on you as other options.
As said above, speak to someone like payplan or stepchange.
Good luck.

Thank you everyone.

I'm training to be a midwife, not sure I'd bankruptcy would affect that?

Thinking about it I think we worked our way out of debt with PayPlan, not StepChange, I'd contact at least one of them and get advice about your particular situation. get moving on that this week and you will feel so much better when the letters stop arriving.

Hi OP

We've compiled some useful links posted by Mumsnetters into a financial issues webguide, so that people experiencing difficulties can find all the relevant information in one place - we hope that it's useful for you.

@gardentrent Sorry to hear you are in this financial situation. I too am a student midwife and single parent.

have you sorted things with student finance now? Do you claim the bursary and any universal credit?

so it definitely affects people working in regulated financial services, company director and charity trustees and solicitors. Don’t imagine it’ll be an issue for you but you could always check with the NMC who would be the regulator once you qualify.

The only other issue with going bankrupt is it will affect you obtaining a good credit check for private rentals. You would need a guarantor then. Do you know or have a viable solvent guarantor in mind? Usually a relative.

It's unlikely bankruptcy or IVAs would be suitable. Given the amount, if you can't afford to pay back at contractual rates, either a dmp or a dro would probably be the best options.

A dmp would mean paying back what you owe but after having been defaulted so at least interest won't keep being added.

If it was a problem with student loans, does this mean you might be entitled to loan paymens from them to cover the sept-may period? Because that would help to pay off your debts.

Hi OP

I went bankrupt in my twenties.

20 yes on I'm married, own a house, car etc..

Getting finance for a few years after bankruptcy is hard. But you'll rebuild your credit rating and after a few years you won't need to declare your past bankruptcy

The worst thing for me was the feeling of shame and having to go to court. Still impacts me to this day. So I'd advise not to go into this lightly.

Your student loans won't be written off. I've only just finished paying my student loans now.

Best of luck and sending you a big hug.💐

Hardly any careers will be closed off. Having been through bankruptcy it's never impacted my career. I did have to declare it, but it didn't close any career doors. Can't think of many careers where this would b an issue.