| T O P I C R E V I E W |
| mandy21 |
Posted - 29 January 2010 : 14:21:14
I currently have £8000 worth of debt.
My income is £750 p/m.
I rent a room at £400 p/m.
Housekeeping totals £100 p/m.
Prescriptions total £10 p/m
Travel(public transport) £12 p/m
Mobile phone £25
Interest payable on credit cards total roughly £200.
Please advise given these circumstances whether i may qualify for bankruptcy..?
Regards,
Mandy |
| 5 L A T E S T R E P L I E S (Newest First) |
| Housing |
Posted - 31 January 2010 : 18:44:08
Hi,
Good advice already provided - I think it would be worth you making an appointment at your local CAB and they will be only too pleased to take you through the best process open to you
Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and one of my best heroes!!) |
| gettingoutofdebt |
Posted - 31 January 2010 : 17:37:02
With a DRO out of the equation your options are:
- Debt Management Plan (DMP). This is an agreement between you and your creditors. You pay back an agreed amount each month until the debt is cleared. As you have already said the creditors do not have to freeze the interest so it can take a number of years to clear the debt. There are intermediary companies that are able to set up the DMP. The creditors also need to agree to the DMP. If you have £200 DI as it looks like from your original figures then this would be 40 months to pay £8k. You would need to add on a few months for interest repayments and a fee for the intermediary company so it would probably be more like 48 months. One thing worth mentioning about DMPs is that setting one up with creditors doesn't always stop them chasing their debt. Generally creditors will only be happy when you are paying them the full repayment amount and a DMP does not offer any legal protection from creditors chasing their full repayment amount.
- Individual Voluntary Agreement (IVA). You would normally need to have £200 DI each month to be able to set up a IVA however some companies will accept £100 DI. The IVA normally lasts for 5 years and 75% of your creditors need to agree to the IVA. Have a look at http://www.iva.co.uk/ for more information and a list of reliable IVA companies. From your original figures you could probably pay the debt off in 4 yrs with a DMP so this possibly isn't a valid option.
- Bankruptcy. Your debts are written off and you are discharged after 1 year. If you have £200 DI then you would have to pay an IPA (Income Payment Agreement) of £100 (50% of your DI) for 36 months.
Are you sure your original figures are correct? £100 for housekeeping is a very low amount. The guideline figure if you are BR is £200 for a single person and I normally spend between about £180 and £210 each month.
You are the only one who can make the decision as to which option is the best for your situation. I would suggest that you have a look at other posts on this forum and iva.co.uk and investigate your possible options. You can also speak to the CCCS and the CAB to discuss your options but whatever you do, do not rush the decision.
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| mandy21 |
Posted - 31 January 2010 : 16:56:10
Thankyou for your responses. Having spoken with the National Debtline, i have been advised that i do not qualify for a debt releif order given that I have more thatn £50 DI. I failed to mention in my earlier post that i suffer with bipolar disorder and therefore my income can vary greatly depending on my ability to work. I worry that I will never clear anything of the actual debt given that the interest etc is so high. (I have exhausted all balance transfer options over the years) Please advise, should I opt for a pymt plan, am i likeley to clear the actual debt over any reasonable time as i beleive that the interest is not necessarily frozen by the creditor..?
Kind Regards
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| gettingoutofdebt |
Posted - 29 January 2010 : 16:24:15
There is information regarding DROs and their criteria at http://debtrelieforder.org.uk/commonly-asked-debt-relief-order-questions and companies that are approved intermediaries at http://debtrelieforder.org.uk/debt-relief-order-competent-authorities
One of the criteria for a DRO is having less than £50 disposable income (DI) after you have paod all of your bills and I am not sure if you qualify for this.
In any case try and book an appointment to speak to the CAB and they will go through your options.
If a DRO isn't an option then bankruptcy will be although £8k is not a lot of money to declare BR over so the CAB may come up with another solution.
Maybe you could make a smaller payment to your credit cards? From the figures you have quoted you have about £100 DI so contacting your creditors and offering a smaller payment amount may be an option. |
| chester2005 |
Posted - 29 January 2010 : 16:14:42
firstly welcome to the forum
for debts less than £15000 a Debt Relief Order DRO may be more suitable depending on your Disposable Income DI and if you have any assets
the CAB are one of the people doing these
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurhman)
RevivaUK and Paul Johns helped me through it all i can't recommend them enough!! |
