Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By Morgana
#3481 Hi..I'm hoping I can get some really good information and help from you all because I'm going crazy!!

I have quite a well paid job paying £930 per month. Over the past 11 years I have got into debt totally over £25k due to mostly credit cards and a loan which I took to pay off some credit cards (the loan was for £6k and I have to pay £12k back!). I have also suffered from depression for really the same amount of time and due to one reason or another thought that spending money would help me feel better..obviously it hasn't. I have been out of work since 22nd July due to my depression and have had my wages cut to half pay, then pension rate along with statutory sick pay. In July I went into arrangements with Payplan to start paying the DMP, they said I had £335 available surplus so this was paid for one month and then I paid reduced amounts of £100 as my wages had been drastically reduced and more recently £10 as it was reduced again and I really have no available surplus. Two of my creditors (as far as I'm aware as Payplan really haven't told me too much) are still adding on large chunks of interest as well as late fees and reduced payment fees. I really feel that I will never ever get out of this. It is making my health a lot worse, I have an appointment with a pychiatrist and I really have a low quality of life. I live at home with my mum who is a pensioner, we live in a council house. I do not have a car. The only asset I have is the laptop which I'm using now which I bought from a catalogue company who are one of my creditors.

What I want to know is..would bankruptcy be the best thing for me? Is the surplus I have too much to be considered for bankruptcy? I really can't live on the amount Payplan have said as I am borrowing money left right and centre without any real hope of paying it back.

Any help would be greatly appreciated, especially from those in a similar position.


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By JaneClack
#3484 Well bankruptcy certainly looks like a realistic option as with the small amounts you are able to repay it is going to take a long time to repay the debt. When your surplus was £335 it would have taken about six and a quarter years to repay the whole debt - if the creditors had all frozen interest and charges. However, almost immediately this situation changed as you were not working and this meant - at £100 per month - it would have taken over 18 years. If you had thought this would only be for the short term then it might have been worth ploughing on but now you are able to make only token payments to the creditors and so it is stretching into infinity. You really should not have to put up with this burden - especially as you are not well and this must be exacerbating the situation.

If you were to take advantage of the current insolvency legislation your debts could disappear within a month and you would be discharged from bankruptcy in no longer than a year. The negatives would be that a small item would appear in the legal notices in your local paper ( read by those who twitch net curtains and will be used the following day to wrap up someone's cod and chips) and the fact it will appear on your credit rating for six years. But let's look at the positive - the debt has gone, if you are not working you will not get an income payments arrangement and you would get your life back. Only you can decide but unless you are going back to work very shortly there seems little point in throwing a token sum at a debt which is increasing.

Take some advice from your case officer in Payplan as they will be able to advise further as they know more of your circumstances. They will agree that £10 per month is not getting you anywhere. Also read through the leaflets you can download from the home page at

Good luck with whatever you decide.