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  • Bankruptcy?

    I have two debts one is just over 7k the other is for 1700.

    I am not working due to poor health I am not entitled to benefits.
    My partner works and is self employed. The work isnt permanent and can dry up. One year our income can be different to the next. We are not usually in debt and both if these issues were caused by mistakes by others and not us.

    My partner earned under 30k last year and the private limited company was dissolved. The people who are owed the 1700 have refused an offer of 5 per month that was offered despite me telling them of hardship and saying is pay more once finances are better.

    I'm not sure what to do I don't live outside of my means and never usually owe a penny to anybody.

    I'm thinking of going bankrupt or something to get rid of these debts and start again.

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  • #2

    I'm sorry to hear that you're struggling and I hope I can help with this as I went through a similar situation.

    Are you able to apply for any furlough payments? Your partner may be able to claim some self-employed benefits when she files her taxes for last year?

    Who specifically is it that you owe the two debts to?

    A lot of major creditors/lenders are giving payment breaks at the moment to due the pandemic.

    If they're not, as it sounds like the case with your smaller debt, then you can also ask them to momentarily freeze your interest so at least your situation won't get any worse whilst you get back onto your feet.

    Maybe try sending them a copy of your budget to show that, like you say, you really don't spend more than you have. It's often the case that when they see your budget, they understand/believe it a little more.

    I'm entered into an IVA which is a less severe insolvency method than bankruptcy but I still would only recommend it as a last resort. That being said, it has been good in clearing the majority of my debt which like yours was around 7k but it does leave a pretty hard mark on your credit report than although can be fixed, takes some time.

    I hope this helps and I will try to find your response as quickly as I can on here if you choose to reply.



    • #3
      Hi Gudillidup,

      One thing I'd add to Liz's post above is that an IVA can be a problem if you have a fluctuating income. If you try to reduce the payments during the IVA and your creditors don't agree, it can be cancelled - and you still owe the debts.

      If the debts were caused by mistakes by others & you don't think you should owe them at all, you could dispute the debts. Alternatively, you're right that bankruptcy could be an option. Depending on your income & spending month to month, and your assets, you might also be eligible for a Debt Relief Order (similar to bankruptcy, but costs 90 not 680!).

      If these creditors take you to court and get a County Court Judgement (CCJ) against you, the court will look at your income and outgoings and work out what you can afford to repay (as long as you've not ignored the court letters!). So at the moment these creditors either think they can bully more out of you, or just don't believe you when you tell them what you can afford.

      Sending them your budget as Liz suggests could help. They might be more likely to 'accept' your budget if it's been prepared with a debt advisor - and an advisor can also talk you through all your options in more detail. Even if you're certain bankruptcy is right for you, it does have some important consequences that you should be aware of before applying, so I would always recommend you speak to a free debt advisor first.



      • #4
        Absolutely right - an IVA is not for everyone and as I said has some significant consequences. It's hard to suggest a solutions without knowing more about your circumstance. I agree with weatherman that some professional debt advice would be best but don't feel you need to pay for any of this as there's lots of help out there. Try to stick to charities who won't pressure you in any direction as many insolvency practitioners might.

        I would recommend just keeping regular contact with your creditors and keeping a record of it all to show the courts that you've made your best efforts.


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