Could someone explain Bankruptcy- seriously considering it..

[namechangedtomoan]

DP has Massive debt of £18,000 has never been able to even make a dent in it despite no kids and good job, he doesn't care if he cant get credit again and has been very careful not to get in any more debt for many years.
Is it something that's easy to do? Pardon my ignorance

Have you looked into an IVA? The costs are usually less than a full bankruptcy and some of the restrictions of bankruptcy are avoided.
You will need the assistance of an insolvency practioner. I would suggest you go to the CAB or one of the debt charities and they will offer you some guidance.

Thank you so much

www.insolvency.gov.uk/bankruptcy/alternativestobankruptcy.htm

Have a look here too

www.insolvency.gov.uk/bankruptcy/alternativestobankruptcy.htm

Just make sure he is aware of 'hidden problems' of bankruptcy eg he will struggle to get a bank account, may only be able to have a cash machine card if he opens one so wouldn't be able to use in shops or online etc.

Not in any way trying to belittle your DPs debt but my Xh abd my joint debt was rather more than that. We took out IVAs and this was definitely the right thing to do. We went through the CCCS and make a monthly payment. Has scuppered credit history but seeing as we couldn't pay the debts it was scuppered anyway. For my job being bankrupt wasn't a possibility so was good the IVA was possible.

I am only able to have a basic bank account but it has a debit card and I can use it online. Can't write cheques which is occasionally an issue but I either pay cash, postal order or get my mum to write me a cheque.

The feeling when we took the first steps to sorting out the debts was one of relief and although I still feel stupid for the mess we got ourselves into, it could have been worse.

Your DP needs to talk to one of the free debt advice services such as CAB, CCCS or National Debtline. There are all kinds of things that can be done before declaring bankruptcy although, for some people, bankruptcy is sometimes the best option.

In the meantime, if he has a good job and a reasonable salary, he needs to sit down with the bank statements, credit card statements etc. and work out where his money is going exactly. Interest payments presumably take up a lot of his spare cash, for example, but debts can be consolidated, made cheaper, prioritised... spending can be budgeted more carefully.... all kinds of things if someone is prepared to put in the effort

www.moneysavingexpert.com has some really good ideas on how to make yourself a debt reduction plan and stick to it.

I can only echo what Cog has said.

Bankruptcy is an option for people with insurmountable debts.

The people who benefit from it most are those with no or few assets, with unsecured debts.

Your DH would be 'bankrupt' for up to a year, but depending on an assessment of incomings and outgoings would need to contribute to his debt for up to 3 years.

This compares with an IVA which requires a 5 year committment.

The note of insolvency lasts 6 years after last entry.

So, for bankruptcy, his 'credit rating' would be marked for 7 yrs, for an IVA 11 yrs.

Some effects of bankruptcy last a lot longer than others. For example, getting any sort of credit will be very hard. Having said that, anyone who has benefitted from bankruptcy on a personal level (ie. it has changed their lives and given them a 'clean start') has, in my experience, been completely put off credit for life!

DH and I filed bankruptcy in 2007. Discharged the same year (9 months and 10 months respectively). Had no assets, no excess income to speak of, so didn't need a Payment Agreement.

We were allowed to keep both (old) cars because we worked in opposite directions at conflicting times and had no access to reliable public transport (DH worked off-route and I worked at a time which was impossible for a bus journey). The Official Receiver decided it would be silly to demand we give up a car because to do so would stop us earning an income.

We have a bank account. Never been overdrawn in nearly 5 years now. We have a debit card, can set up Standing Orders, Direct Debits, etc. We don't, nor will ever, have an overdraft - wouldn't take credit under any circumstances now.

We have been able to take out a contract for a TV subscription (BT Vision) but had to jump through a few hoops to do so. Generally, you would fail first credit check, but then the more indepth assessment is fine, when they can see that you have no credit, 5 years good history, etc.

For us, it was the best move. We couldn't survive with the debts we had, and we couldn't escape the situation we were in. Even with an IVA we would have been sunk.

Having said that, if your husband has a good job, and only £18k debt, there are other options, and an IVA is one of those. The other is asking CAB to intervene and get interest rates frozen, etc.

DH has been through bankruptcy. It was a tough journey, he couldn't even have the electricity bill in his name unless we went to a prepaid meter, he was declared bankrupt in the days when he couldn't have a bank account but we are now out the other side. DH's bankruptcy was before the new rules came in but if I can help PM me.

joyfulpuddlejumper depends who you open the bank account with, I know natwest no longer allow you to use other bank cash machines but can use card in shops, whereas Barclays you can't use as anything other than a cash withdrawal card, they are all slightly different terms, obviously can't go for any bank debts are linked to so may end up with something like either of the above examples, or something else altogether.

rokchick I have a Barclays Basic Bank account after going BR 3 years ago and my card is a visa. I don't have an overdraft or a cheque book but I can use it the same way as a visa apart from that - in shops / online etc.

I haven't had any problems with utilities (virgin tv/ internet, gas, elec etc) and have a contract phone with T mobile (on a £25 monthly tariff) Its not easy to find these, and I am 3 years on, but there are options there after Bankruptcy.

Have just re-read the above, and it makes it sounds easy - it was an incredibly difficult and heartbreaking decision to make, but for me there was no other choice and it was life changing. Seek advice as the other wise posters have suggested and good luck. If you need any advice or I can help, feel free to PM me :)

Under an IVA or a bankruptcy the time limit is the same - 6 years.

Does he have any assets, eg a house. If not I would be tempted to get the debt under 15,ooo & then do a DRO, slightly less daunting than bankruptcy.

"Under an IVA or a bankruptcy the time limit is the same - 6 years.£"

Although that's not quite true.

It's 6 years from last entry. Which means that someone in an IVA will have 11 years on credit file.

Someone with no assets, no spare income, so no Payment Agreement will have 7 years on credit file.

Lougle I can state with 100% certainty that both are 6 years from commencement, therefore equal in terms of time.

Except that the creditor marks the debt satisfied on discharge, which is 1 year in the case of BR and 5 years for IVA.

Sorry Louge, RedHelen is correct. You would naturally be defaulted under the CCA.Defaults come off your file satisfied ir not after 6 years.If not you can complain to the Information Commissioner.