Is there any useful things to know for somebody considering bankruptcy?

Posted by joefromreddit@reddit | AskUK | View on Reddit | 12 comments

I have been in a debt repayment plan with Stepchange for several years, but I have more and more debts piling up and struggling to deal with it all. I owe around £15,000 in total and am considering going into bankruptcy. I know that there are a lot of implications with this, but the debt itself is causing a great toll on my mental health. I am 33. I live in a housing association property and do not expect to ever own my own home. Is there any advice or things to know from people who have also been through bankruptcy/insolvency? Thanks

Reply to Post

12 Comments

[-]

-EachPeachPearPlum-@reddit

You have to pay to declare yourself bankrupt. Am IVA might be more suitable? I had an IVA when I was 25. I owed 44k! 6 years later it was all cleared and the total amount I actually paid back was 7k. I thought it would ruin my credit score forever, but it's been 7 years now and it didn't take long for my credit score to go back to normal

[-]

Embarrassed_Park2212@reddit

IVA's are only suitable if you have an asset to protect. They are largely miss sold to people that don't as being an easy way to clear debt. You pay more money to you IVA practitioner in the first few years than any towards debt. If you don't have an asset to protect do not get an IVA under any circumstances.

[-]

-EachPeachPearPlum-@reddit

I didn't have any assets to protect, and it was a very easy way to clear my debt. I didn't care who I was paying, all that mattered was I only paying £101 a month instead of over £700, and no debt collectors wouldn't contact me.

[-]

Embarrassed_Park2212@reddit

I'm just saying what I've seen, heard and read about Iva's. They are like bankruptcy but for homeowners or someone with an asset to protect and unless you have either should not be recommended, it's usually money grabbing companies that tout them as getting debt cut by 75% or something on Facebook. Most of the money you paid went to that company rather than paying your creditor's.

[-]

nathderbyshire@reddit

Should be fine as long as it's a reputable organisation or charity - like Christians against poverty can crowdfund costs associated with getting help like as well. As far as I know it's a medium option if a DRO can't be obtained and you have some funds to pay towards debt. You have a timeframe, you pay a fixed amount towards that debt then once the time has cleared, probably 2/3 years the rest of the debt is wiped. I think it's one of those things where it can easily become predatory but is still a legitimate debt path as well.

[-]

melancholyy-scorpio@reddit

r/personalfinanceuk are brilliant for questions like this.

[-]

CMR1891@reddit

As someone who works in the insolvency industry, my biggest piece of advice would be to co-operate. The quicker you can provide documentation to prove that you are insolvent, the quicker the process is on our end and the quicker the case will be closed. So many people drag it out for years unnecessarily to the detriment of their mental wellbeing!

[-]

crackerlackers@reddit

Hello, unless you have a car on finance then a Debt Relief Order is probably a better plan than bankruptcy. It's difficult to advise without knowing who it is that you owe money to. Stepchange can absolutely help you make the right decision. I have worked for many years with social housing tenants in debt. What I would say, is that in my experience, they get the debt cleared by a DRO and a year or two later are back in debt again. Long term change in spending habits takes some time and effort. Have you identified what got you into this situation? That will help you be able to move forwards. Good luck 🙂

[-]

laurawire@reddit

I don’t have any advice but I just wanted to chime in because I am sure this is deeply stressful for you. I hope you have some family and friends around you to support you emotionally. Take care of yourself and if you need more support with managing how you’re feeling please make sure you visit your doctor urgently. Are you aware of resources like SHOUT and the Samaritans as well? Please keep putting one foot in front of the other. You’re on the road to getting out of this, it just takes time.

[-]

Embarrassed_Park2212@reddit

Have you considered a debt relief order, look into that before bankruptcy. So long as you are not due a big inheritance or have anything of value and your total debt is under £50,000 you should be ok. Oh you need to have £75 or less of disposable income left but with clever budgeting, you could easily do that.

[-]

WelshBen@reddit

15k is relatively tiny in this situation. Miniscule even. You are almost certainly better off managing your finances as well as you can going forward while continuing to make payments towards what you owe.

[-]

AutoModerator@reddit

**Please help keep AskUK welcoming!** - When replying to submission/post please **make genuine efforts to answer the question given**. Please no jokes, judgements, etc. If a post is marked 'Serious Answers Only' **you may receive a ban for violating this rule**. - **Don't be a dick** to each other. If getting heated, just block and move on. - This is a strictly **no-politics** subreddit! Please help us by reporting comments that break these rules. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskUK) if you have any questions or concerns.*