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Falling Apart
Starting Member
United Kingdom
15 Posts |
 Posted - 22 October 2009 : 18:55:08
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Hi there. I'm so relieved to have come across such a helpful and supportive forum. I'd really appreciate any advice as I've been struggling with a debt mountain for some time now and become so worried sick about what to do, I can hardly think, work or sleep anymore.
I've been to my local CAB and the CAB at the RCJ and got conflicting advice. My local CAB said that I should write to my 13 creditors and make pro-rata offers to them (or contact PayPlan), but the RCJ said that I should go down the BR route. I have £70k on credit cards and loans ... my repayments now total £1,500 per month, but my actual disposal income is approx £50 after living costs, so I'm not sure they'd accept such miniscule repayments out of that.
But the BR option is so scary as I'm really worried how bad it would look that I've been borrowing more to make monthly repayments over the past few years and I'm still currently living off credit cards to meet living expenses (as I have negative cash flow). I've heard about the possibility of getting a BRO for incurring debt in this way and the whole thing is worrying me to death. It all escalated from a debt of £25k that I was left with after a traumatic relationship breakup in 2004, after which I was forced to rent my own place.
Since then I increasingly had trouble balancing the books each month and my doctor referred me to a psychotherapy group to help with severe depression, anxiety & OCD. I've really not been coping for years now and just had my head in the sand until it's reached a crisis point. I'm in such a panic that I'm now paralyzed with fear and in a desperate state. It's taken me ages to build up the courage to register on here, as I feel so ashamed to be in this mess.
I've got to do something soon as I'll have to start missing repayments next month as I've run out of credit, so any advice would be so much appreciated.
Many thanks |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 22 October 2009 : 19:04:04
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Hi,
To be honest pro-rata payments are a bit of a waste of time as creditors will keep chasing you until you make the full monthly amount. You may get a month or two grace with a pro-rata payment but after that they will want the full amount. If you disposable income (DI) is £50 then you would probably be looking at a few pounds each.
If you want to declare BR then you would need to save the £510 BR fee so the best option would be to stop making any creditor repayments and use this money to save for the fee. You should keep up any mortgage repayments if you wish to keep any property you may have but the rest you can stop.
To declare BR you can find your local court at http://www.hmcourts-service.gov.uk/HMCSCourtFinder/CourtList.do You should contact them and find out the procedure for declaring BR. Some have an appointment system and others just let you turn up on the day. If it is an appointment system then it can take 4 weeks for your appointment.
The forms are located at http://www.insolvency.gov.uk/forms/englandwalesforms.htm You need forms 6.27 and 6.28 and there is a guidance form as well for more information.
It's probably easier to complete the forms online - http://www.insolvency.gov.uk/doitonline/doitonlinemenu.htm and then just print them off once you have completed them.
You will need 3 copies of the 6.27 and 6.28 forms to declare BR except at the High Court where you only need one copy. Don't sign the forms before you go to court as they need to be signed in front of the bankruptcy clerk.
If you are on benefits you can receive a £150 rebate of the BR fee by filling out the EX160A form:
http://www.hmcourts-service.gov.uk/courtfinder/forms/ex160a_e.pdf
http://www.hmcourts-service.gov.uk/courtfinder/forms/ex160.pdf
Ask any other questions you have as there are plenty of people on this forum who will give you advice. |
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charlie44
Junior Member
231 Posts |
Posted - 22 October 2009 : 19:48:51
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| FA, we found ourselves in exactly the same position, it was only after talking to Giles Jones that we finally pulled our head out of the sand. We are now filing for BR, but our court date is not until late November (and we booked it at the start of October) If you have no other option but to go BR then it is not the end of the world. The posters on here are brilliant, very helpful and not judgemental at all. I would try and talk to one of the experts that frequent this site, I actually spoke to Mealanie Nicholas and am thanful now that I did, but there are also others on here who will help you decide on what your best option is. I know it is scary at first but once you have visited this site and spoken to the wonderful people who frequent it, it does become easier. |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 22 October 2009 : 20:01:32
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Hi Falling Apart and welcome to the site.
You have taken the first major step in recognising you have a debt issue, and it needs to be addressed. The CAB have their part to play with people who find themselves in a very uncomfortable place through debt. They do however, have little experience when it comes down to discussing BR and what is involved.
From the figures you have stated a DMP is not the answer for you. Your disposable income is also to little to propose an IVA. Therefore realistically, a BR maybe the best way forward for you.
Your fears with regards to a BRO are understandable, however nearly everyone would admit, and the OR does understand that people will rob peter to pay paul. As long as you have not used your cards for any extravagant spend you are likely to be ok.
You do need to stop using credit from now on. I would use part of the £1500 you pay per month to creditors to cover your BR fee.
Do you have any assets?
I would also consult one of the professionals who post on this site.
Gd luck.
Treat EVERY Penny as a prisoner. |
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Dec Bankrupt
Starting Member
United Kingdom
13 Posts |
Posted - 22 October 2009 : 21:51:56
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Hi Falling apart
I found myself in the same situation with 90K worth of debts. I was advised that i didn't have enough surplace income for anyone to deal with my debts on my behalf, so I contacted my debtors and arranged to make nominal payments but after 2 years, I pulled my head out of the sand and with some help from the CAB completed my forms for bankruptcy, and took them to the court. That was 10 months ago, and I can see light at the end of the tunnel getting brighter.
I have along the way, lost my marriage, gained the opportunity to get help with mortgage rescue (but after careful consideration turned it down), had the BI in the family home re purchased for me. I'm just waiting to see if I'm lucky nough to get early discharge!
I won't say it's an easy road but this site allows you to see what can come your way.
I wish you the best of luck. Don't look back, look forward. |
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Falling Apart
Starting Member
United Kingdom
15 Posts |
Posted - 22 October 2009 : 21:57:06
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Thanks for all your replies and advice, much appreciated. It sounds like the CAB advice would buy me more time to get my head round this, although I'd have a lot of work to do with my creditors and ultimately wouldn't solve anything for long. They also advised contacting PayPlan and I have a telephone appointment with them tomorrow, although guess this isn't looking like the best solution as you all point out. Gettingoutofdebt, thanks for the BR links, that's really helpful.
In 2 Deep, I don't have any assets except for a 20 year old car worth £100, a DVD recorder, old computer, mini Hi-Fi and cheap camera. Plus some second hand furniture that I bought from the previous tenant. Not sure what's considered valuable?
My debt has just increased as I've robbed peter to pay paul and also meet general living expenses. I've not purchased anything extravagant like holidays, but have probably bought too many coffees at the train station over the years (admittedly I probably haven't made economical purchases due to lack of time from a stressful job in London). So I should stop paying creditors and use the money I save to get by from now on? I'm so worried about when they start calling, as I've always made my repayments and a lot of them have my work number, which would be very stressful to deal with.
Thanks for sharing your experience too charlie44. It's good to know that things do get easier and there is a lot of support on here. Did you get to speak to those experts through the helpline?
I've also heard it's a good idea to set up a different bank account and switch over income & priority bills to that. But if I did go BR, would that not get closed down?
Thanks |
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Falling Apart
Starting Member
United Kingdom
15 Posts |
Posted - 22 October 2009 : 23:32:22
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Hi Dec Bankrupt, thanks for the luck. I guess it must have been quite a struggle making nominal repayments over 2 years ... were you under constant pressure from your creditors or did they accept it?
That sounds like good advice to start looking forward, rather than getting stuck in the past all the time which is what I have been doing. Maybe the book isn't closing, but just a chapter.
Sorry to hear it's been such a tough time for you, but glad you're seeing light at the end of the tunnel. Good luck with the early discharge! |
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 23 October 2009 : 08:02:44
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Hi Falling apart, sorry to hear of the circumstances you find yourself in. Charlie44 took up my offer (open to anyone who has difficulties) to have a free confidential chat with regard to bankruptcy and its implications etc. I help many people each week who contact me direct with the link at the end of this post or vhia the 'expert's button on the left hand side.
I will briefly go through your ituation with you to see whether or not bankruptcy is the right route - completely non-committal, and importantly free! All I want to do is ensure that everytone gets access to the right advice and is then able to make an informed decision as to thier debt solution.
I will be happy to help you in anyway I can
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
email me at melanienicholas@jonesgiles.co.uk
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 23 October 2009 : 08:04:47
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quote:
In 2 Deep, I don't have any assets except for a 20 year old car worth £100, a DVD recorder, old computer, mini Hi-Fi and cheap camera. Plus some second hand furniture that I bought from the previous tenant. Not sure what's considered valuable?
The car would be considered an asset but that would be it. Even though it is 20 yrs old if the OR deemed that you didn't need it for essential journeys (i.e. to work) then they could take it. If it is only worth £100 then the would probably let you purchase it from them for this amount.
quote:
My debt has just increased as I've robbed peter to pay paul and also meet general living expenses. I've not purchased anything extravagant like holidays, but have probably bought too many coffees at the train station over the years (admittedly I probably haven't made economical purchases due to lack of time from a stressful job in London). So I should stop paying creditors and use the money I save to get by from now on?
You haven't done anything that other people on this board have done. I was in the same boat as you robbing Peter to pay Paul and living off my credit cards. I didn't realise how back my situation was until my credit came to an end and I realised that the following month I wouldn't be able to pay my debts.
If BR is the option you have decided (and been advised) on then there is no point continuing to pay the creditors unless you are not going to be able to afford the £510 BR fee for 6 months or so. If this is the case then a pro-rata payment to each of your creditors would probably be a good option as it would keep the creditors off your heels for a short time and give you some breathing room. If you are going to be able to save the BR fee in a shorter time then stop paying your creditors now and use the money to save for the fee.
If you want to reduce the stress that the calls will cause then you can buy a PAYG mobile put £10 or so on the phone and then update your contact details with each creditor to this number. Just leave the mobile on silent and the you won't be stressed each time the phone rings.
quote:
I've also heard it's a good idea to set up a different bank account and switch over income & priority bills to that. But if I did go BR, would that not get closed down?
The Co-op Cashminder is a very friendly BR account and I would recommend opening one before declaring BR. When you open the account mention that you are declaring BR and there won't be any problems.
The Co-op is very busy at the moment so it can take 2 weeks or so to get the account details so you will need to plan to get this account set up and your DDs moved to this account.
This account won't be closed when you declare BR as it is a basic account. It also isn't normally frozen but some experts recommend not putting this account on the BR forms and then mentioning it to the OR when you have the interview. This will ensure that the account isn't frozen and you don't have any problems with wages being paid in/DDs paid out, etc. |
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Falling Apart
Starting Member
United Kingdom
15 Posts |
Posted - 23 October 2009 : 21:41:31
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Thanks so much for speaking with me Melanie, especially after a manic Friday, that was very kind. It was so reassuring to talk it through with you and I feel like I may actually get some sleep tonight! You've really helped to alleviate my fears of BR!
Sounds exactly like my situation gettingoutofdebt. I'm literally on my last available credit and will not be able to meet my repayments next month. Just had my head in the sand as the interest/repayments rapidly increased. Thanks for the info about the car. It's a complete wreck really (and smashed in door), so £100 is a generous estimate! I do rely on it a lot though, as it would cost me a fortunate on public transport to frequently visit family as they're all spread out. Thanks for the tip about the phone, I'm going to get my numbers changed ASAP.
The PayPlan adviser called me today and we spent an hour going through the exact details of my situation. She worked out that under the "creditor accepted" calculations, I actually have £129 to offer each month and she said that's only £80 away from doing an IVA (although Melanie advised me that wasn't realistic!). Anyway, I'm not likely to be getting a payrise anytime soon (in fact, it looks like I may have to reduce my hours to continue attending my therapy group).
I've been so stressed with getting my head around the BR idea, I was actually thinking of signing up to this and making token payments to my creditors to buy me some time at least. However, it would take me 50 years to repay and thanks to Melanie I've started to see sense!
So I'm going to call the court on Monday, ask how long the waiting list is and work on the forms. Despite a dubious warning from PayPlan that one of my creditors (Northern Rock) is linked to the Co-Op, I'll see about opening a basic bank account there tomorrow so I can get my priority debt/rent DDs sorted out and then cancel all my DDs for creditors for next month. As advised, I wouldn't mention the account on the forms and hopefully it will be OK. If they did happen to be linked somehow, could they remove funds from the account after BR?
Thanks again |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 24 October 2009 : 07:37:07
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quote:
If they did happen to be linked somehow, could they remove funds from the account after BR?
No, once you have been declared BR all of your debts pass to the OR and the creditors deal directly with the OR and not with you.
Let us know how you get on with opening the Co-op account and speaking to the court. |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 24 October 2009 : 11:16:00
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FA,
Northern Rock sold its credit card business to the Co-op Bank in 2003 for a profit of more than £7m to free capital for its rapid growth in mortgage lending.
The Co-operative Bank and Northern Rock have cancelled their credit card tie-up, leaving the stricken bank without a card offering for customers.
There is no other tie-up between these 2 financial institutions, so you opening a CoOp account will have no bearing on debts to NR.
Hope this helps.
Treat EVERY Penny as a prisoner. |
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Falling Apart
Starting Member
United Kingdom
15 Posts |
Posted - 24 October 2009 : 19:38:44
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Thanks to you both for the further info. It's reassuring to know that they definitely aren't linked, in case it caused a problem before going BR. Guess PayPlan's records hadn't been updated.
No luck with the Co-Op today as they closed at noon being Saturday. Checked out the other recommendation Nationwide, but they don't offer a debit card with their basic account. Looks like Co-Op is the only one that does offer this?
Just another question. When I cancel the cc/loan DDs, how long does it usually take for creditors to start ringing? Will they know I've cancelled the DD or just assume my account was over and it bounced? Should I contact them before to let them know what I'm planning? Just worried that I've always made payments till now and this is going to all come "out of the blue" to them.
Thanks |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 24 October 2009 : 20:21:21
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you can do CO-OP by phone 08457 212 212
cashminder account
good luck Richard |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 24 October 2009 : 20:30:00
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Hi
Co-op landline is 01695 53760 - saves the o8457 no - a great website say no to 0870 - all these premium lines have a traditional landline under them - we always use them - saves a lot obver the year.
By the way the Co-op are fantastic for BR - no problem whatsoever.
Good luck Richard
"There are no problems - only solutions..." |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 25 October 2009 : 13:29:30
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FA,
Your creditors will be notified electronically by your bank that the DD has been cancelled. This is done within 48hrs of your instruction. They will then write to you about the cancellation of the DD, but will assume you will make alternative payment arrangements. It is only when no payment received by due date when they will write to you/telephone calls demanding payment.
Gd luck.
quote:
Originally posted by Falling Apart
Thanks to you both for the further info. It's reassuring to know that they definitely aren't linked, in case it caused a problem before going BR. Guess PayPlan's records hadn't been updated.
No luck with the Co-Op today as they closed at noon being Saturday. Checked out the other recommendation Nationwide, but they don't offer a debit card with their basic account. Looks like Co-Op is the only one that does offer this?
Just another question. When I cancel the cc/loan DDs, how long does it usually take for creditors to start ringing? Will they know I've cancelled the DD or just assume my account was over and it bounced? Should I contact them before to let them know what I'm planning? Just worried that I've always made payments till now and this is going to all come "out of the blue" to them.
Thanks
Treat EVERY Penny as a prisoner. |
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Desperate for help please
