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cocoalush
Starting Member
7 Posts |
 Posted - 28 December 2009 : 08:15:14
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Hi,
I really would like some advice. I'm a student at university, 22 and not working. I have debts totalling £12,000. The only income I have is my student loan and grant, i get paid in three installments during the year (£2800 each installment). Here's my story:
2007: started university, receiving the student loan was a new thing to me, I wasn't used to a lump sum and I took every opportunity TO withdrew or spend on credit cards and overdrafts from 3 student bank accounts.
2008: I started shopping online with littlewoods etc who offer buy now pay later. I was able to meet payment to my creditors but it was a struggle surviving a little then during the end of 2008 I couldn't keep up with the minimum payments of all my creditors.
Jan 2009: I couldn't keep up with all the payments to my creditors so I seeked advice from a debt management plan. I was still struggling a little especially because I was overspending on shopping and my ex at the time was skint so I gave him money out of kindness not as a loan, in total I gave him around £2000 in sepreate sums during the year 2009. I was able to give it because I wasn't insolvent then, I gave him the money from my student grant money. I also brought him an item for his car totalling £1800 from ebay, though he sold his car after,i brought it for him from my loan money and I was still meeting payments to my DMP but I was struggling.
Oct 2009: I was struggling, I started to suffer from depression and panic attacks, I depended on taxis to travel as my attacks were set of on public transport, I couldn't keep up with the payments to the DMP, I gambled few times on online sites. I was close to skint, I needed money to survive. In the past I took out two payday loans just before my student loan was due so I could pay them off then. I took out two payday loans in nov 2009, I extended the loan til jan 2009. However now I am skint, I can't afford to keep up with the DMP, I have budgeted my I&E carefully and I cannot afford it, I am left with £80 at the end of the month, I budgeted that my income is £550 a month and expenditure roughly £470. I spoke to the CCCS who said that bankruptcy is my only option since my £80 won't cover all my creditors, I am happy going down this route and I am aware of all the implications. I don't ever wish to take out credit ever again. I have some Q's to ask regarding my problem:
If I am declared bankrupt would the OR ask about me giving money to my ex? Would they ask for it back? I did give it during the time I was up-to-date with my DMP. I split up with him don't wish to see him ever again.
Would the OR question about the ebay car accessories gift? he no longer has them as he sold it.
Would the OR get angry about the payday loan I took out? I did intend to pay it back next month but after doing my I&E, I realised I will struggle big time during the next few months.
I am happy to go bankrupt and I know this would enable me to start fresh with no credit. I have no assets. Hope to hear your advice. |
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Blackie
forum expert
United Kingdom
565 Posts |
Posted - 28 December 2009 : 09:17:46
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Good morning
What a sad little tale and unfortunately reasonably common these days! The CCCS was right in that bankruptcy could be your best option as MOST of your debts will be written off. Your student loan, however, will NOT be written off in a bankruptcy.
The Official Receiver could come after your ex for repayment of the loans which you made to him. After all, according to your story, the money was loaned to him and should be repaid. However if it is repaid, it will be used by the Official Receiver to offset costs or repay your creditors. I think that if you do go down this route, you will need to declare your ex as a debtor on your Statementof Affairs. You may also find that you become subject to a Bankruptcy Restrictions Order as you made a loan to your ex when it was obvious that you were insolvent.
Again a Bankruptcy Restrictions Order may be made against you as you took out a payday loan when it was becoming obvious that you would not be able to repay it.
The restrictions on a Bankruptcy Restrictions Order would depend on whether the Official Receiver believes that you were negligent with your finances. Most debtors who have been subject to BRO's find them an inconvenience rather than anything else. They do not affect the time that you are bankrupt but merely place conditions on you after the bankruptcy like not being able to obtain credit over £500; not being able to be a director of a company and these could last for a period of time up to five years.
The other thing to bear in mind about bankruptcy is the cost. It could cost you either £510 or £360 (depending on your income).
I hope that theabove does answer your queries but please feel free to contact the forum if you are still unclear on some points.
Regards
John Blackadder
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cocoalush
Starting Member
7 Posts |
Posted - 28 December 2009 : 09:38:47
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Thanks for your reply.
Just to add I didn't loan the money to my ex, it was more like a gift, I told him that he didn't have to pay me back. I cared about him and couldn't see him go through hardship, he never asked me for the money. I gave it by choice, I know it's VERY silly of me, love turned me blind. I never thought I'll go down the route of bankruptcy. Me and my ex split in bad terms (due to my depression and panic attacks) and I don't ever wish to contact or see him again.
Would the OR still involve him in my matter? I completed the online forms for bankruptcy, I didn't add my ex as a debtor to me. What effect would this have now? I seriously don't want him involved.
I understand the I'll get a BRO, I am fine by that I just don't want to live with this debt and I don't ever wish to take credit ever again. I have definately learnt my lesson.
Should I be paying the payday loan company back then file for bankruptcy or not? I think not to. thanks |
Edited by - cocoalush on 28 December 2009 09:39:49 |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 28 December 2009 : 11:02:04
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The OR may ask your ex for the money back as it was given to him at a time when you were insolvent.
If you have decided to go BR don't pay the payday loan as you are then favouring one creditor over your others.
As I've said in your other post, it might be worth going through your I & E again to double check that you aren't eligible for a DRO. The CCCS are notoriously tight with expenditure, so make sure you put down what you really need to spend.
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
29 IPA payments made, 7 to go - in single figures! |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 28 December 2009 : 19:13:07
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Hi cocoa lush
sorry to read your predicament
yes a fresh start would probably be the most appropriate
if you decide to apply for BR would it effect your chosen study path ? Bankruptcy has some restrictions in what occupations you can not undertake, practising solicitors, local MP and i believe financial services industry.
in relation to your ex, yes as already stated the OR may decide to follow that line to get someof the cash back
In relation to paying back the payday loan, once you have a court date, do not pay any of your debts as you cannot be seen to favour any creditor to another.
as skippy has suggested research DRO,(debt relief order) in what you have said you may qualify worth doing some research .
how about you ? the gambling shopaholick and depression have you managed to get all of these under control (or at least balanced) ?
if not try and get some help, if you can get these back in control it will help resolve the other issues.
do the Student Union at UNI have any debt support ?
our thoughts are with you
good luck Richard |
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Blackie
forum expert
United Kingdom
565 Posts |
Posted - 29 December 2009 : 06:18:00
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I think that your questions have been answered and by all means look into applying for a Debt Relief Order. However there are very stringent criteria in order to be elgible for a Debt Relief Order including the situation which you will be in after a year. If you are in a better off position this time next year, you would be expected to pay back your creditors or enter into some kind of arrangement. If not, your debts will be written off under a Debt Relief Order.
Regards
John Blackadder |
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