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Original poster

in a financial mess is it worth filing for bankruptcy

16 replies

juicymelon · 29/06/2008 20:13

I have aprox £10,000 in unsecured debts, mortgage of aprox £77,000 (house was worth £84,000 twelve months ago prop gone down in currrent market) split with ex back in march and have now (this week) lost my job as i could no longer work the hours in my contract due to childcare issues, so will be on IS in the next week or so, I really donot know what to do, any advise will be grately appreciated,
i am seriously considering the fact that i will not be able to pay mortgage and therefore will have to allow the house to be repossesed, is this the best thing to do or should i see about declaring bankruptcy now

OP posts:

cyanarasamba · 29/06/2008 20:18

Go to your local Citzen's Advice now - ask at your local library for contact details and get and appointment asap. They will give you free advice on what to do.

All best wishes to you.

hopefully · 30/06/2008 10:12

The consumer credit counselling service also might be able to help - www.cccs.co.uk

hopefully · 30/06/2008 10:13

Sorry, should have written, they are a charity (so not trying to sell you anything) set up to help people with debt problems.

MrsTittleMouse · 30/06/2008 14:58

You can get impartial advice online too from Moneysavingexpert or The Fool. Both are pretty well regarded around here.

I'd also recommend going to entitledto and checking that you're getting all the help and benefits that you are entitled to, once you lose your job.

WingsofaAngel · 30/06/2008 15:06

Going bankrupt needs consideration.
You may well have to sell your house.
You will find it difficult to get another mortgage.

You may well have to find another bank account (depending what the official receiver recommends to the bank)

You can go to your local court and get a the forms. In the pack you will get plenty of information on what may or may not happen.

thumbwitch · 30/06/2008 15:08

bankruptcy has serious longterm effects (i think it is still for 7 years) so get some proper advice before considering this rather drastic step - you won't be able to hold a credit card for 7 years, or (I believe) even have a current account in a bank - not sure about savings. CAB definitely as a first stop.

GivePeasAChance · 30/06/2008 15:11

Could you try and get another job and in the meantime speak to your mortgage company and explain your situation? I 'think' they give some lenience for a few months in terms of payments and it may be enough time to get a job that fits around childcare etc

Good luck though

noddyholder · 30/06/2008 15:20

could you let a room?

WingsofaAngel · 30/06/2008 15:30

You can have a basic bank account. The Post office do one too.

You need to write down all of you outgoings. The money you have coming in.

You may be able arrange reduced payments with creditors.Increasing payments when you have found another job.

Once you start missing payments or are late it is recorded on your credit file.

Are you behind with payments at the moment ?

bohemianbint · 30/06/2008 15:34

CCCS are brilliant. I went bankrupt last year and it has only made my life better - but then I don't have a mortgage in my name and am not likely to try for one in the next 6 years.

I hope you get things sorted, it's incredibly stressful. There's probably a bit of a wait to get an appointment with either the CCCS or CAB so you probably want to get on it asap.

Original poster

juicymelon · 30/06/2008 16:19

thanks for the replys
not really practical to get a new job at the moment on a full time basis as i have made the drastic decision that i am going to go back to full time education in september!

Wingsofaangel- yes i am seriously behind on a lot of my payments at the moment, have been for a few months.
Enquired with local CAB today they only offer a drop in service and if they think will b able to assist more they make an appointment to go back

Would an IVA be possible if i am going to be on income support?

OP posts:

MrsTittleMouse · 30/06/2008 16:29

An IVA is generally a bad idea when you are on benefits - you just won't have enough money to satisfy your creditors. And then they'll make you bankrupt anyway. Some companies make a lot of money from organising IVAs (at your cost), so it's a good idea to get independent advice first (like the moneysavingexpert website).

WingsofaAngel · 01/07/2008 10:07

For an IVA you need to have assets over a certain amount.
I would go to CAB and call into your court and get a pack to read through.National debtline

newforold · 02/07/2008 11:56

I think a better idea for you would be to speak to CCCS as others have suggested.
You can make token payments to creditors of £1 per month if you are going on to benefits but this would only really be practical for a fairly short period of time.
As you are planning to be a student this clearly won't be a short term situation.
An IVA is probably not suitable for you as you would still have to cover the mortgage and you can't do that on benefits.

Bankruptcy would mean that you would find it very difficult to get credit for 6 yrs, if you did get credit it would be at a higher rate of interest.
You would be discharged from bankruptcy after 1 yr but it would remain on your credit history for a further 5 yrs.
The co operative bank do a good basic bank account for bankrupts. Your normal bank would probably close your account pretty much straight away. Bankruptcy isn't free by the way, even if you're on benefits. You would still have to pay around £350.

I think it is probably the best option in your situation but not one to be taken lightly, you really do need to speak to a non profit debt advisor before you go any further. In any case, speaking to a debt advisory service is a condition of obtaining a bankruptcy order.

funbags · 03/07/2008 23:49

newforold is right you need to speak to a proper debt advisor, its amazing what they can do sometimes...ie get some debts written off all together, negotiate payment plans for priority debts (CTAX, Utilites, rent etc), get token payments agreed for non priority debts (ie £1 per week) and interest frozen or reduced. Access to these services can be challenging so persevere and dont be put off if you dont get in straight away. There are also charities like the energy trst fund who can clear off certain utility debts depednng on who your utility suppliers are. You'll need help to sort the mortgage. carefully consider an IVA - you can pay thousands in fees and a lot more (thosands again) in interest than if you'd just negatiated via a debt advisor. best of luck.

anone1 · 04/07/2008 16:12

If you go bankrupt in the UK because you can't pay your loans, but you live abroad, are your overseas assets seized?

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