Is The big "B" the answer??

[Limbo Land]

Hello to All,

 

Like most other people on this forum i am looking for a bit of advice from some experienced heads on what to do with my finacial matters!

 

I think this case is a lot more straight forward then some of them on here but never the less im still confused.:-|

 

I am 27 years old, no kids, no house and no real other assests to speak off ,other than a nice smile, (so my mum says)

 

Ever since leaving school ive worked full time but have always spent (irresponsibally) more than ive earned...holidays,cars etc.. so ...here i am

 

£24000 in debt

...one managed ( dont ask) loan with HSBC £14000

...one loan with Nationwide £10000

 

The job i work in now pays ok and i can cover the repayments but it would take me decades to pay off my loan

 

Would i be better off leaving my job ( getting sacked)

declaring myself bankrupt and starting again??

 

Has anyone been in a similar position and can give some much needed advise? Ive always wanted to travel so is it feasabe to declare yourself bankrupt...then do some backpacking around the world? Come back and your Bankruptcy be discharged and start again?

 

I hold my hands up that i was wrong to get in such a mess, but when your young and cc companys throwing money down your throat its hard to say no

 

So the big question.....

 

Option A . . .do the dutyful thing and struggle with my repayments for the next 20 years

 

or

 

Option B....declare myself bankrupt and live with that hanging over for god knows how long?

 

Any ideas?

 

Thanks for your time

[rebel11]

Hi Limbo

 

Welcome to CAG.

 

Some of the experienced guys will respond, be patient as it's the weekend. Have you been mis-sold PPI on any of the loans?

[debtinfo]

Id go for option 1, if you can afford the repayments then you should continue to pay

[Limbo Land]

Hello Guys,

 

Thanks for your welcome.

 

Debt Info,

 

I totally agree that option A is the right and moral thing to do, my worry is this.....

 

My work has very low job security and is in a fragile industry....i could end up paying half my loan off in ten years time....then boom, jobless, forced to go Bankrupt but now the problem is i have a mortgage two kids and its a lot more serious....What im trying to say is that i think Bankruptcy is enevitable at some stage and i would rather it was now then later.

 

Rebel 11,

 

I do think i may have been charged PPI with some of my HSBC products but im to worried to ask them as ive heard they can get a bit nasty i.e calling in the managed loan or raising already high intrest rates or payments..same applied with overdraft charges

 

Ta

[debtinfo]

Equally, you could get a promotion or a new job that pays better in a few years, That would mean that you could pay it of earlier. I think you should be looking at ways of reducing your outgoings or maximising your income and making sure that you pay the highest interest debts first to reduce them as much as possible.

 

If you go bankrupt the OR is going to ask some tough questions of what the moeny was spent on, why you couldnt pay it back. You mention that you might want to get a mortgage in a few years, that is very very unlikely to happen with a bankruptcy on your record

 

Are both your loans over 20 years, what could you do to overpay one to pay it off and concentrate on the other.

 

I most on MSE as well and there is a club on there which helps people live as frugally as possible and save as much money as possible

[Limbo Land]

The managed loan is over a long long time....ive read up on them and it seems there not overly keen on people actually paying them off as they can make a mint. HSBC for you!

 

I do see the point your making Debt Info..and its the right one.

 

But if theres one thing ive learnt in the past 27years doing the right thing dosent always equate to making the best decison...

 

Although ive spent money badly i definetly would not consider it to be wildly...every one has a different set of circumstances..

 

Ive a friend who went Bankrupt around 7 years ago, she is now a home owner so i guess it must be possible.

 

Thanks for your advise

[Dodgy Geezer]

 

Has anyone been in a similar position and can give some much needed advise? Ive always wanted to travel so is it feasabe to declare yourself bankrupt...then do some backpacking around the world? Come back and your Bankruptcy be discharged and start again?

 

 

Even the cheapest "gap year" is likely to cost you at least £10k. Where is this money going to come from?

The Insolvency Service will not let you have it, and you will have to explain where it come from should you put it away first.

[Limbo Land]

Hello Geezer....

 

I didnt really mean backpacking...i meant working away seems like a perfect time if im BK in the UK, maybe OZ in a stress free job..i am lucky enough to have family that would fund the flight, would the OR look down on me working out of the UK whille "in" BK?

[Limbo Land]

I am not wanting to sound as if i am taking this decision lightly....this problem has been playing on my mind for years now as everyone knows feeling trapped with heavy debt is not nice especially when you cant see an end to it.

 

All advice is welcome

[rapterman]

IF you have a good credit record then I would strongly advise not to go down the BR road.

 

Have you considered the possibility of re-financing your loans?

If you do you a good credit record it might be better to look for a loan with a lower APR than your current loans and pay them off.

[rebel11]

Hi Limbo

 

Don't be bullied by these guys, if you claim back Penalty Charges or PPI

and they act vindictivly you will have recourse with the FOS, put the account in dispute. They see you as a cash cow, I've got an account with them, I will be going after them pro actively for charges, they will not be happy, but thats tough luck. Especially when I hear they've made a profit of £12bn. Get active not scared.

 

 

Rebel 11,

 

I do think i may have been charged PPI with some of my HSBC products but im to worried to ask them as ive heard they can get a bit nasty i.e calling in the managed loan or raising already high intrest rates or payments..same applied with overdraft charges

[walter147]

Hi Limbo Land

 

Don't forget - everyone has a right to declare themselves bankrupt. It's not illegal, irrespective of your financial circumstances and in alot of cases it is the best option.

 

Everyone who declares themselves bankrupt has a choice to make the right moral decision and struggle on regardless, thus existing as opposed to living. They also have the choice to draw a line under the situation, declare bankruptcy and move on with their lives.

 

Morally, our MP's were wrong to fleece the taxpayer for millions, but as MP's it was their right, under the existing rules to claim for the things they claimed for.

 

Morally it's wrong for bogus asylum seekers to come here and claim £7k per month from the tax payer for housing benefit, having put nothing into the pot, but legally, under current laws they have a right to do it.

 

Morally it might be wrong for you to declare bankruptcy, whilst you can still cover your repayments, but under current law you have a right to declare bankruptcy.

 

Just as the MP's and the bogus asylum seeker look after No1. you should do the same too.

 

There are things to consider though....

 

If you declare yourself bankrupt......

You will have to pay for the privilege... the cost is somewhere around £500

You will have to have an interview (face to face if you petition for your own bankruptcy) with the official receiver (OR) who will want to know what caused your bankruptcy. Just be honest with them. do not lie. They do not judge you, they merely find out the facts.

If you are still working the OR will assess whether you can contribute some of your earnings to your creditors (HSBC & Nationwide). If they decide you can this may last for 3 years.

Whilst you are bankrupt (the period from attending court to when you are discharged) you cannot come into any money without alerting the OR

The period of bankruptcy is usually 12 months unless you are granted an early discharge.

The OR will probably inform your employers and your landlord

The fact you have been bankrupt will stay on your credit file for 6 years.

 

Other than that, there's nothing to be scared of. Nobody who deals with your bankruptcy tries to make things difficult for you. They are sympathetic and deal with you in a respectful way.

 

 

Whilst Bankruptcy should never be taken lightly it is your right to walk into a court and declare bankruptcy any time you wish. Whether that right is one you wish to exercise is purely down to you. Society may frown upon you because you are still effectively solvent - i.e. you can cover your repayment on your debts as the repayments fall due, so why are you shirking your responsibilities, but almost everyone who goes bankrupt could have, in some way avoided bankruptcy, but life is for living not for being miserable because you made a few mistakes. The important thing is to learn from them and make sure that if you do go bankrupt, you are never put in that situation again.

 

Hope that helps

[debtinfo]

Actually you don't have a right to declare bankruptcy if you can afford your required payments, only if you can't pay your debts as they fall due.

[debtinfo]

Here is a guide from the insolvency service for you to read

 

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/howtopetition.pdf

[walter147]

Debt info - My apologies, yes, it would appear you are correct. I was under the impression that it was everyones right to declare bankruptcy, however after reading your link it would appear that if you are technically solvent that right is not there.

 

Limbo Land - it would appear as you stand at the moment, because you can cover your repayments you cannot declare bankruptcy.

 

Another lesson to be learnt - never take my advice!!

 

I hope you get things sorted

[debtinfo]

It doesnt matter a lot in the real world though, because (avoiding any moral judgements) there is nothing to say you couldnt make yourself insolvent, by giving up a job or missing payments.

 

I wouldnt recomend it though, In that guide are a number of organisations that give advice and it might be worth talking to them about how the OP can organise themselvesperaps with getting interest stopped, to pay the debt earlier.

[rapterman]

How long have you had the loans for?

You must have paid off some of it, depending on how long you have been paying it.

 

You should write to each creditor and ask them how much is left to pay off if you were to settle early. You maybe surprised by how much is actual left to pay.

[BEBOBEBO]

If you did go bankrupt then the OR wouldnt let you travel abroad if you were paying for it as you wouldnt have the funds available. Have you tried speaking to an advice agency such a cccs or national debtline.