Would bankruptcy be the best option?

[Annabanna]

I am in £25000's worth of personal debt, I have creditors chasing me all over the place and no way of paying them back at any reasonable rate.

I am also self employed, Currently not turning a profit but no breaking even and hoping to start making a profit soon - That was a long hard slog so I don't want to give up now im almost there.

But Im worried about what will happen to my business should I go bankrupt. Would they let me trade still? Take my stock?

I have nothing of any great value, and am now on anti depressants because of all the stress, I have been close to ending it all. Im so scared I will loose my business if I go bankrupt, its all I have left

[Curlyben]

Re: Would bankruptcy be the best option?

In all honesty I would seriously consider your options here.

£25k is NOT an insurmountable amount of debt and, personally, I think bankruptcy is a step too far.

A simple DMP maybe more appropriate for you.

Of these debts how many have been "sold" to debt collectors.
A simple breakdown would help for better advice.

[Annabanna]

Re: Would bankruptcy be the best option?

All of them I believe, Some of them may even be uncollectable now

[Curlyben]

Re: Would bankruptcy be the best option?

That being the case, I would give them the satisfaction of BK.

Could you do use a simple breakdown so we can help better.

[Caspar]

Re: Would bankruptcy be the best option?

annab,

I have been almost exactly where you are now. Three years ago we were advised by CAB to wait for one of our creditors to make us bankrupt as they could see we simply didn't have the money to do it ourselves. Our debt was more than double yours.

I in particular went to hell and back over this. It really was an immensely difficult time in my life. However, I did eventually accept that it was the best thing for us and "got my head round it."

This was a major move forward as all the letters and threats became totally meaningless as I either ignored them, or accepted their threats that the time had finally come for "it" to happen. Honestly, no stress, no worry - that had been done getting my head round the concept. I've even asked DCA's to make me bankrupt - they won't!

As CB said £25000 is not a vast of money in the scheme of things. My advice would be to soldier on with your business - if you've nursed it successfully through the recession it must be a good, strong one. If many of the debts are with DCA's now and been sold, I honestly think you'll find as I have that they won't make you bankrupt.

As long as you can get your head round having the debt and accepting it may take a while to pay it off. You can only pay what you can and debt is not a crime. Please try to see it as I now do. It makes all the letters and threats so much easier. With me it's almost become a game seeing how much I can get written off, a slight overstatement as it trivialises a serious issue, but the serious issue genuinely doesn't feel very serious anymore. It's just money.

The only thing that would make me seriously consider it in your situation is if you have any significant debt to someone like HMRC or other governmental body. If it's just to "normal" places - banks, other businesses etc... don't worry about it. Keep on doing the good work you're obviously doing with your own business. It would be such a shame at this critical stage where you're about to hit break even point and actually be in a position to start repaying some of these debts to throw in the towell and give up.

Keep fighting, and I'm not pretending it's easy, it is far from, but try to get your mindset like mine - if it happens then so be it. It's not the end of the world and life goes on. The reality is people are very reluctant to make you bankrupt as it costs them money. Meanwhile you "forget" about them and responsibly make the most of life.

[Annabanna]

Re: Would bankruptcy be the best option?

Thanks, I see what your saying, But our lives seem to have stopped until we are out of debt - for example, We can't have a car in case the bailiffs take it and with 4 children we can't take them out without one, I feel we are making them miss out on things because of mistakes I have made.

I just want this to stop - or at least to stop panicing every time the doorbell goes.

[Curlyben]

Re: Would bankruptcy be the best option?

Is there any real possibility of bailiffs attending your property ?
Are your priority debts unto date, ie mortgage, government, council tax, utilities.

Everything else can wait.
Bailiffs wont simply arrive without a pre-existing judgement against you, so don't worry in that respect

[seduraed]

Re: Would bankruptcy be the best option?

First just a welcome to you . Do no dispair there are lots of people here who are keen and able to help.
A simple fact is if you started your business in the recession then it is more likely to survive in long term.

What you need to do is down load an income and expenditure form and fill it in honestly .

Write to all the debt collection companies and send a prove it letter . I think there is one on \Curly bens posts underhissigniture .
Once this is done you will see who continues to chase you .
Then send a section 78 request to each creditor with £1 and they should send statements and the amount of the debt.
If there are any which are more than six years since last payement (a few excptions mainly to councils and goverment) they are Statue barred which makes them uncollectable.
Once you have that infomation you can start to plan and work your way out of the problem .
Use the benefits checker on the ugov site and calim everthing you might be entitled to . If they say no you're no worse off than today . If yes then there's a few quid to go around.
Write and offer to each creditor a pro rata amount and if that's £1 a month so be it.
Dont speak to them on the phone as all the collector wants is a payment . If you can arrange it make your payments by standing order . That way no can get cute with your payments.
When things improve then offer more on a pro rata basis .

Thats all
I can think of for the moment other more expeienced people will be along shortly .

[Caspar]

Re: Would bankruptcy be the best option?

One thing we did was prepare for bankruptcy. This may sound strange, but we had a motorhome. We transferred it into a friend's name as we didn't really want to lose it (even though it's ancient!) and have joint insurance with him.

As regards cars, I'm lucky in that I love them and do 99% of my own work on them. Last week I changed my trusty P reg Audi for a 2002 Rover 45 with 92000 certificated miles on it, MOT till Jan 2012, Tax till end of March. Cost? £100.00

There are lots of good cars out there for £500 or less - again it's a mindset. Do you want a status symbol, or do you want something that goes from A to B reliably? Our car is in our name, but £100? We can live with losing that.

I suspect your mindset is as mine was, that this will happen and you can already see yourself putting up the tent to accommodate your family etc... etc... The reality I bet is very different. It's something you're contemplating. If you've not had loads to do with DCA's before, you're probably worried sick about them and frightened. I've said it before - I used to be physically sick every time the post came I was so scared.

Post up your situation in more detail and I reckon you'll find you're not in as bad a hole as you think.

[Annabanna]

Re: Would bankruptcy be the best option?

Hi, I do have 2 existing judgements against me, That have been defaulted on, So I believe there is a very realy possibility of a bailiff arriving, I don't know? What happens when I default on a ccj? Im getting threats ranging from breaking in to imprisonment, These are water bills ccj's

[Caspar]

Re: Would bankruptcy be the best option?

You need someone more knowledgeable than me here, but I do know there is a way of applying to the court to have a repayment plan amended to suit your current circumstances. It sounds as though this would be a sensible way forward for you over these.

You're quite right to prioritise these as they are potentially serious having already been to court.

Being nosey, what about rent / motgage? Gas? Electricity? Council Tax? Non Domestic Rates on your business? Tax? VAT if registered?

Beyond this what else have you got owing? Please try to give us a full picture. You will not be judged - we've all been there, or, as in my case, are still there and working through it. Give a full picture and you'll get the best help we can give - various people on the site have expertise in various areas, so if we know the full picture we can call in the troops to give the best advice available.

Honestly, you'll be surprised how quickly you learn, and this in itself puts your mind at ease. I'm in the process of reclaiming from Council Tax and Bailiffs from three years ago. I've already had £126 and have just asked for an amount more than double that for the hell they put me through.

I do know EXACTLY how you are feeling. Give us the full picture laid out in black and white and you'll be amazed at the help there is here.

[Annabanna]

Re: Would bankruptcy be the best option?

Ok, Here goes

No rent, council tax, electric, gas arrears owed. Im paid up on those.

I have about £700 worth of business rates owing, Moving out of property so they wont build up again. Im paying these direct to the coucil but the bailiffs are still hovering and demanding

I have about £2000 water rate bills on ccj's that I havent paid

I have a £10000 bank loan I was forced by my ex into getting in my name

£3500 in joint names with my ex, a car loan, car was taken back and this is outstanding

£1000 credit card which I believe is over 6 yrs old
£1000 on catalog again I think this is 6 years old.
£2000 outstanding on water rates not attached to ccj

And £1800 in bank charges!!! for going £15 overdrawn
I actually think thats it apart from a few £50ish bills - My panicking has made me think I had a bigger prob!

[Caspar]

Re: Would bankruptcy be the best option?

Only writing in red to differentiate from what you've written.

Ok, Here goes

No rent, council tax, electric, gas arrears owed. Im paid up on those. Excellent

I have about £700 worth of business rates owing, Moving out of property so they wont build up again. Im paying these direct to the coucil but the bailiffs are still hovering and demanding These need dealing with asap as they could become very serious. I'll return to these at the end - if I forget, pm me and remind me!

I have about £2000 water rate bills on ccj's that I havent paid Already discussed - can be dealt with, but I don't know how as I know little detail about courts. A repayment plan can be agreed though - obviously quite a priority.

I have a £10000 bank loan I was forced by my ex into getting in my name See 1 below

£3500 in joint names with my ex, a car loan, car was taken back and this is outstanding See 1 below

£1000 credit card which I believe is over 6 yrs old If not acknowledged or paid towards for a continuous 6 year period this is unenforceable through the courts.
£1000 on catalog again I think this is 6 years old.As above
£2000 outstanding on water rates not attached to ccj See 1 below

And £1800 in bank charges!!! for going £15 overdrawn
I actually think thats it apart from a few £50ish bills - My panicking has made me think I had a bigger prob!See 1 below

Right, back to a nicer colour.

1. All of these are non-priority debts and should all be treated the same (not sure if you can reclaim any of the bank charges - sure someone will tell you). More below.

OK, main thing keep paying all priority bills so you don't get behind.

Next address NNDR (business rates). You will find bailiffs and councils lie through their teeth sadly. Try to come up with a figure that you know is BOTH affordable and sustainable. Pay this, ideally weekly, direct to the council - do not pay the bailiffs a penny! Use their automated telephone system or online payment system to pay. If you phone the council they will say they cannot take payments and you have to deal with the bailiffs (lies). If you phone the bailiffs they will want everything all at once. Keep paying religiously - do not miss a payment. Meanwhile the bailiffs will go berserk and threaten all sorts - record everything. After a few weeks contact the CEO of the council and point out you've been paying religiously. You have to contact him as the frontline staff refuse to take any payments and say you have to deal with the bailiffs. Remind him the council is vicariously liable and his own staff are laying the council open to litigation.

These are your absolute priorities.

Now fill in an Income Expenditure sheet which works out what you should offer the others pro-rata from your disposable income (you can find this at the top of the debts page I think . I think they're in the bailiffs section as well - any problems, just shout!) Legal Beagles Consumer Forum

Then offer the others what the IE sheet says. Make sure you fill it in realistically - it's easy to convince yourself you can live on nothing and you can't! Remember haircuts, clothes, house repairs, etc...

It is important at this stage to be seen to be treating all non-priority debts equally, hence the pro rata calculation. Effectively you then send that off to them and see if they accept or not. Include a copy of your IE sheet so they can see you've done it properly.

In all of this process, remember not to overstretch yourself. If all you can offer someone is £2.00, then that's what you offer.

Send it all off and wait for replies, then post back and let us know what they've said.

The NNDR are important to sort out. As said pay direct to the council - read the Bailiff Guide under bailiffs by Amy - it's excellent Bailiff Guide - Legal Beagles Consumer Forum

Don't panic - all is manageable and life will go on.

Good luck, and if you want any help with anything, just ask!

[Annabanna]

Re: Would bankruptcy be the best option?

Thank you so much! I may even sleep easy tonight.

Will probably be back with more questions tomorrow though!

[Caspar]

Re: Would bankruptcy be the best option?

That's fine! No problems. I've added some links to help you find IE sheet and Bailiffs Guide - sorry, had the wife nagging me my food was going cold!

Sleep well. All resolveable. If I showed you my debt yours is pennies! Seriously, rest easy about it - you're doing all you can, AND BEST OF ALL you've done the hardest bit - admitted it and done something. Well done you! That sounds patronising but I honestly mean it, well done!