IVA, Bankruptcy or other option, please help?

[nikkikitch]

Hi

 

Ive been made redundant twice in the last year and a half which has left me with a huge amount of mounting debt.

I stupidly also bought a car on finance at Christmas when mine died as i need it for work and also for my family.

 

The situation has become increasingly worse and i now owe more every month than i bring home.

 

I actually earn a good salary of £33,000 plus working tax credit of £340 per month.

 

I owe a mixture of companies from rent arrears to old credit card debts to mobile phones. Everything has just completely spiralled out of control and i just want to wipe the slate clean.

I guess the biggest drain is the car which costs me £240 in finance, £50 in insurance and about £250 in fuel every month. But i cant get out of the credit agreement!

 

Im seriously considering bankruptcy as ive struggled with debts for the last few years and they are just making me ill!

 

Another option might be to get a consolidation loan but no one will touch me with a recent ccj!

 

Ive managed to get car finance, a mobile phone contract and have a debit card so i can obtain SOME forms of finance.

 

I just dont know what to do, please advise on the consequences of the different options.

 

Thanks

 

Nikki

[debtinfo]

Hi, i cant tell you which to go for as it has to be your decision, mainly specialise in bankruptcy information, so what would you like to know

[rapterman]

I think the first step you need to take is to contact your creditors, in writing, and explain your situation.

 

You could enter into a DMP with them, even if its just temporary until you decide what to do next. It will give you some breathing room and even allow for you to put some money away to pay for the bankruptcy if you choose to go ahead with it.

 

Do you have any assets?

Would your job be effected by going bankrupt?

[loobyloo85]

Hi there

 

It is your decision at the end of the day, however, I can inform you from personal experience that taking out a consolidation loan in attempt to clear debts only seems to worsen the situation due to high payments and interest charged.

You could sit down and write down all of your income and outgoings. The outgoings would need to exclude unsecured creditor repayments, so you would just need to write down bills, rent arrears payment, housekeeping, clothing, vehicle costs etc. Then from this, work out how much surplus income you have if any (income - expenditure). If you have more than £50, a debt management plan would be an option. The advantage of a DMP is that you have someone acting on your behalf making payments each month and applying to freeze interest, however the disadvantage is that it can take years to repay your debt in full if the interest and charges are still put on your accounts. If you have more than £100 surplus, an IVA would be an option for you where you can propose to make a monthly payment for 5 years into the plan, and then after 5 years, the remainder of your debt is written off and you are debt free. The possible disadvantage of this option would be that you would need to stick to a budget for 5 years (although if circs change, this is taken into account). Bankruptcy would be an option for you even with no surplus monies available, however, it does cost £600 to declare yourself bankrupt, so you would need to find this money. Bankruptcy would be a quick option for you to become debt free, however, the possible disadvantages with this is that assets would be at risk (with regards to your car on finance, it depends on the agreement and OR as to whether this would be affected), and also the stigma involved with bankruptcy.

 

I hope this helps. I would be interested to hear what you decide to do, and if I can be of any more help at all, please let me know x