Hello everyone,
This will be a long post so might be worth making a cuppa if you want to read it all!
Where to begin.....
Firstly, I have literally just come off the phone with the Official Receiver at my local court. For anyone that doesn't know what that means, I was made bankruptcy last week (a few days after my 30th birthday!) and have just completed a pretty stressful period of my life involving a Debt Management Plan, IVA and then Bankruptcy.
And so it begins....
About four years ago I had recently won an award for best new business in my area and decided to start a second company. Within about six months of starting this company I got into some financial trouble as some of my suppliers went out of business owing me thousands. I had around a dozen staff and some liabilities and tried everything to keep it running making myself seriously ill in the process(irregular heartbeat).
Unfortunately the company folded and I had used all my available personal credit to keep the business afloat. Luckily I still had my previous business but had to lay most of my staff off there too.
Immediately, I entered into a Debt Management Plan(DMP) paying about 40p in the pound but continued to receive dozens of letter from creditors and phone calls at 8am on a sunday! I was at my parents house so this didnt go down too well!!!
I was managing to keep my head above water and hold off the creditors and thought I could carry on paying about £500 a month. However, in a DMP the creditors rarely stop the interest and will pursue you very intensively.
After 18 months of the DMP I realised that it would take me at least 17 years of £500 or so a month to pay off the creditors. I did want to pay back what I owed and was also trying to preserve my credit rating as I knew I had at least half a chance of getting a mortgage or business lending should I so require.
How niave I was!!! I was £60k in debt and was hoping to get a mortgage somewhere along the line!!
The thing is, most people(society) see their credit rating and the ability to obtain credit as second only to their family. It took me 18 months to realise you need to deal with issues like this pragmatically and for the long term.
Anyway, I had considered bankruptcy but I still had a limited company which was giving a reasonable wage and everyone else(including myself) was obsessed with the notion that bankruptcy has a huge stigma attached to it. So I opted for an IVA using Melanie Giles team.(she posts on this forum and this is where I found her).
Despite sounding a little scary, as you are dealt with by your local court in theory, the process of setting up an IVA was painless and something I really felt positive about at the time. You go from having creditors making you feel like a lepper to receiving NO call or letters. I had a dozen or so creditors (one of which being my own company, but that's a different story) who immediately stopped contacting me. Which was great and I felt like I could get on with me life.
I'd like to recommend Melanie Giles and her team at this stage for being very helpful and understanding. They made the process very simple indeed. The IVA, in essence worked well for a good 18 months and with realistic income and expenditure in place I was able to live a perfectly reasonable life style. I'd been used to living off nothing for the previous 18 months so there was no change except for not being allowed to apply for or use credit(I had no reason to!).
I would like to point out at this point that if anyone does enter into an IVA make sure you allow yourself enough breathing space. i.e. if you put down x amount for car expenses bare in mind the cost of covering breakdown and repairs and other possible unforeseen costs. I think I'm saying - be realistic but don't take the p1ss
It's in the interests of the creditors and you that you keep the IVA going!
Right, about a year or so into my IVA I was going out with my now fiancee, who has made me realise what life is about i.e. NOT MONEY!!! Unfortunately, her closest friend her father became terminally ill and for 12 months we helped look after him right to the very end. To a point where we didn't work for two or three months as it became more intense.
This was earlier this year and I had also wound up my first company and had been trading another company for a few months with hopes of earning a million!!
This period of our lives really put things into perspective. What is important in life and where your priorities should lie. Unfortunately, I began to struggle on personal level and therefore my business suffered as a result. I took a part time job to make ends meet and tried to keep my business afloat.
In March, my fiancees' dad very sadly passed away with his daughters at his bedside. At which point we didn't work for a few weeks afterwards.
Financially for me, I kept mine and my fiancees' finances separate and carried on for a few months trying to rectify my issues. I think deep down I knew the IVA would come to an end at some point.
When things calmed down towards the summer a little I decided to break the habit of a lifetime and take some professional advice.
Firstly, speaking to the Melanies' team at the IVA Advice Bureau then the National Debtline and then another company called Reviva UK.
I had come to realise that my company would only go down hill given my predicament and other business factors. I had to face up to the situation however, I didn't panic.
The IVA advice bureau were very 'matter of fact' and told me what my situation was and what my choices were. The National Debtline although being very helpful indeed sometimes contradict themselves when you speak to different advisors but they do give you the facts(textbook version).
I was told I need to wait for my IVA to terminate(not paying for three months) before being able to petition my bankruptcy if I wanted to go down that route. I had already missed two payments the year before so I thought I would only have to wait a month. They actually added another month on just in case I found a new job or something else changed. Probably wise but a little frustrating.
I came clean with my fiancee who was very supportive and I said I just couldn't continue with the IVA despite my best efforts. I think I was also hoping that bankruptcy might be a fresh start for us as a couple and hopefully our future family.
As the time came closer for me to petition my bankruptcy(this was now the last option open to me after the DMP and IVA!) I started to panic!
I received the bankruptcy forms which looked like a nightmare and I spent a whole day trying to fill them out. I rang the National debtline about a dozen times with conflicting feedback and was in bits. I was on this forum all the time reading stories about BRU's and being prosecuted for being 'reckless' with money and assets. I was worrying about whether the small money I got for selling my car months ago would be seen as reckless, etc, etc, etc. I needed some real advice not that from a young, newly trained advisor at the National Debtline.
Having been on this forum for some time I had noticed the odd poster who worked for Bankruptcy/IVA advice companies. I decided to give Paul at Reviva UK a call not knowing whether they charged or not! I had a brief chat where Paul described their services and he gave me some excellent advice which helped put my mind at ease. Reviva basically helps people through DMPs, IVAs and Bankruptcy. The advice appeared to be 'real' advice from people who dealt with these issues everyday.
This was about two weeks ago now.
Now, I imagine everyone on this forum will crucify me for this but I decided to pay (a much reduced fee) to Reviva UK to help me through the process. I had some money left in my business account which I decided would help me through the process of bankruptcy.
You can read as many forums as you like but the advice I gained from Paul and most notable Dave at Reviva was the only advice I should of listened too.
They helped fill out the forms and then met me at the Court on the 5th October(3 days after my 30th birthday celebrations in which I had to keep it all bottled up for two days of family and friends!)
Normally, you would see the court clerk and have a brief chat and a short telephone conversation with someone else(I forget who). Anyway, Dave from Reviva handed in the forms with me and explained every step. To my great relief I didn't have to see anyone except the very helpful receptionist and was done within about an hour which was only time spent waiting around.
I received a letter then stating I would only have to have a telephone interview on the 13th October(sometimes you get a face to face interview if they want to delve deeper into your affairs). As my forms had been filled out correctly by Reviva - I had no assets to release plus the fact almost all of my debts were over 3 years old(apart from a couple of personal guarantors on business debts) AND I had spent 3 and a half years trying to pay my creditors through a DMP and IVA it seemed the authorities didn't seem to interested in my case and so it as straightforward.
I was geared up today to receive the call off the Official Receiver who's job it is to go through my affairs and make sure I had acted responsibly with my creditors and had not been reckless with assets or cash. I must say the hours before the call I was the most nervous I have been since my driving test(second one)!:) I was warned the call would last 45 minutes or longer whilst they asked what the money was spent on etc. To my surprise the Official Receiver was also 30 years old so we had a little banter about 'feeling old' etc. and she was very nice indeed.
The phone call lasted all of 20 minutes and I couldn't believe it when she said that was the end. I almost felt like saying 'what about the rest of the form?' but thought it was best not to extend the call longer than necessary!
I phoned Dave at Reviva straight afterwards (who I also spoke to prior to the O.R. interview to put my mind at ease(sort of). He said how my case was probably 'run-of-the-mill' for them and I had nothing to worry about as I had tried so hard to pay back my creditors.
I ended the call thanking him and his team for their excellent service. I know it probably sounds like I work for them but I couldn't have got through it with out their help!
So, I am now debt free.... official.
Depending on if I get a better job I may have to pay into an Income Payments Arrangment for 36 months but this will only happen if I start to earn a lot more in the next few months, so I'm told.
How do I feel now?........
Well, just writing this post over the last half hour, I've cried a bit and but realised I've done the right thing.
Three and a half years down the line I've tried every possible option open to me and have had more experiences in that time that most people would have in a lifetime.
I am now a more rounded, caring individual who knows where my priorities lie and that whatever your financial situation - it's never THAT bad.
The process of Bankruptcy was actually stressless, it's just the lead up and the lack of understanding and advice that gets you.
I would like to finish with some words of wisdom but I'm just about done I think. I hope that this post acts as some general advice for people in a similar situation - god only knows how many times I've sought solace from this forum.
I will also be offering my advice on this forum for the coming weeks to give something back to all the helpful people who have given up their time for me. Although I'm not 'trained' in debt advice I'm sure you'll all agree I'm experienced!
Thanks to all.
p.s. getting married next year - my new life starts today.
