Thread: Seriously considering going bankrupt, could I get some views as to whether you think I should

Firstly appologies for the long winded essay.


Hi, ive been looking at my options and have to admit i'm seriously considering making myself bankrupt. I have about £19500 on credit cards(and rising) and a £600 overdraft. I'm 29, self employed sole trader and have no assets + very little business stock(maybe £1500 retail, used vinyl). Infact I was forced to move back in with my parents.
Heres a quick summary of my finances

Cards
Cap one £9500 - 35.9% apr - £300 odd monthly
Lloyds £2800 - 34.9% apr(I think) - £60 odd monthly
Citicard £4200 - 27% apr(I think) - £105 odd monthly
Egg £1250 - 25% apr(I think) - £40 odd monthly
Ulster £1750 - 26 apr(I think) - £60 odd monthly
Lloyds overdraft £600 + about £8 monthly interest + more charges if I forget to pay in to cover the interest.

Now these just dont shift, interest barely covers minimum payments, all are maxed and in arrears so theres £24 charges each per month on top. Most are actually higher now than they were 12 months ago with no realistic chance of them ever being cleared.

Rent £200 (unfortunately this is wheat gets skipped often, feel so bad about this)
car insurance £21
Other car expenses ie tax/mot/maintenance etc £30+
Petrol £50
Mobile £34
Internet £15
Food £80 (mum looks after me otherwise)
All other non business expenses including going out £20

So well over a grand a month going out with over half going to creditors although a few of these cross partly into business also so maybe a bit lower.

Business turns out roughly £800-900 net profit a month which is all spent on the above.


Now my parents are not getting any younger, dad is 60 and mum not far behind, they should not have to deal with me and all my stuff everywhere, I mean 29 and living with parents really is sad, probably my main motivation.
I know the serious implications of bankruptcy ie no credit for 6 years the poor rates if I do and possible struggle to get a mortgage but I feel the positives out weigh the negatives. I mean in 6 years the business could be doing really well(what with more money to invest + having my own place would mean hopefully a specific room for business and storage rather than having stuff everywhere), being able to move out - my parents need there space back + I need to move out. Also I feel trapped at the moment, I dont go out ever not out of choice, single but find the debt really affects my self confidence.
Can rent a 2 bed house(shared with my brother) for £500 round here.



The negatives as far as i'm concerned is purely the credit record, I dont have credit for work other than ebay or discogs(music classified site) which as I gather is fine aslong as you never owe £500 so i'll just pay that once. I lose my bank account and debit card(although I already have a prepay debit card) and gather I can probably get a basic account anyway.




Now a couple of questions.

Will I have to account for every last penny spent/recieved and how far back?, I keep accounts(not very good but I know whats what) however because of how things have been ive been so stressed even feeling a bit depressed about it all that the odd thing gets missed


The only things I own in the world are all things used for work ie car(£400 runabout), laptop(probably worth £200), then naff tv.

I have a phone contract which I use for work, will this come under the bankruptcy or will I be able to keep the contract?

Will they remove stock from me?, basically its just old dance vinyl, fairly worthless(cost me 50p piece probably average £3 each individual resale)I maybe keep £1000 at a time. I also sell diet products which I do in person but I keep hardly any of this in stock and very much doubt they would want this anway.

Also I know i'd be expected to pay a certain amount back monthly, how would this be worked out?

I have a HSBC account and pay all of my money into it, it has been run perfectly for 2 years since I opened it, direct debits and plenty of cash going through. What is the chance they may let me keep it but downgrade it to basic?, I have no debts with them nor have I ever and imagine have an excellent in house credit score with them.



Sorry about that waffle. Guess I just want some peoples views. Ive thought about dmp or iva but cant help but think they will both still leave me in a position where I wont be able to move out or even if I could with the dmp i'll be paying it for 10 years by which time I could of done so much with my life. I know ive paid back as much as ive borrowed over the last 12 years I just want out of this prison now and BR seems like the only realistic way of me making the next few years happier than the last.

or write to all your creditors and explain the situation and try to come to an arrangement to pay a reuced sum and to stop all interest, some may oblige, the ones that dont then make a payment of £1 a month and send them all a cca for the agreements for credit cards and laons.

do any of these have PPI, if yes was it relevant and can you claim on it, if you are self employed then chances are the ppi was mis-sold so claim the payment back.

Originally Posted by rapterman

First thing you should do is create a more detailed budget of your income and out goings, you would be amazed at some of the things you can forget about!
Go to the Consumer Credit Counselling website and fill in your expenses, it’s anonymous and it will also give you some options as what to do next.
An IVA maybe a better option for you as you will only pay into it for three years, you should be able to keep your bank accounts with the IVA but it’s very unlikely you can keep any account when you declare yourself bankrupt, at the very least all accounts would be frozen by the official receiver.

Are you from Northern Ireland by any chance?

Hi and thanks very much for replying.
I will do a income outgoings in more detail. Ive thought of a few things i'd forgotten already.
As for the IVA I thought it was 5 years?, realistically I dont wanna be paying much over £200 or maybe £250 a month i'f im going to be commiting but that would certainly appeal to me. Would that stick on my record for 6 years from the start or end?. I'm really not bothered as i'm happy to avoid credit unless its for a mobile, mortgage for the rest of my life.
Not in Northern Ireland.

you can claim back all crdit card charges and the interest the acrued from the date of the charge.

if the agreement is not enforcable then you can withold payment, so for Lloyds and crap1 send the account in dispute letter and stop paying

have a read around some threads to get a better idea