pay off the debt or go bankrupt

[andea_r2002]

hi, someadvise needed pls.my question isnt about ivas but debt so maybe someone can help.have debts off 12000 ish but having trouble paying back at the moment i live in council accomadtion and drive a tattyold car. do i struggle for 3 years o pay off the debt or go bankrupct as i have nothing to take( or Give).an y advice welcome. gds andie

[Adam Davies]

Hi
Bankruptcy will bring your debts to an end,however you may have to pay a monthly amount for three years under an income payment order.
If you can repay your debts in full over three years then you may not be insolvent and bankruptcy would not be applicable.
Regards

[Lisa2009]

I suppose it would all depend on your ability to keep paying into a debt management plan where interest would keep being added on.
As you have no assets then Bankruptcy would probably be a good option for you. It would draw a line under your debt problems and allow you a fresh start.

[aguise]

Same from me andrea, it would give you a fresh start, but you would need to be insolvent.

Ang

[ianmillington]

There are 2 legal bases for insolvency - your debts exceed your assets (straightforward) and you are unable to pay your debts as they fall due i.e you cannot meet the monthly payments.

When you say "struggle for 3 years" do you mean you could repay the debts in that time, but it would be tough? If so, I think you should have someone look at your finances on an holistic basis ie taking all factors into account (as there is always likely to be something you have missed!) so you can look at your options. There are many. Lisa touched upon a Debt Management Plan. Another option could be to ask your creditors to reschedule the debt to a slightly longer, more manageable period. The creditors may well like that one. You need to weigh up all of these things to see which one is right for you. My first impression from what you say is that Bankruptcy for you could be a sledgehammer to crack a nut, and a pretty destructive one at that. Whatever option you take, make sure you have considered and discounted all the others.

Ian

[MelanieGiles]

Yes - I agree with Ian. It is always a shame to see people with relatively low debt revert to bankruptcy proceedings. We need those Debt Relief Orders - and soonest Ian!