Strange Famous

Ok

My salary - gross - is £16,000 PA, I take home £1,030 a month aprox
I also make about £75 profit a month selling second hand books

I owe...

Personal loan - £7100
Credit Card A - £2900
Credit Card B - £1350
Student Loan - £3500
Parents - £8000

I am seriously starting to wonder if I should declare myself bankrupt - I know this screws up my credit... but I dont know what else I can do... I've got myself in such deep shit, I cant see any way out.

I rent my apartment, dont own any assets worth selling. I just cant see any way out... does anyone have any experience/advice about the practical implications of voluntary bankruptacy? Would I have to tell my employer for example?

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

Averett

Well, I'd post everything I owe, but it's too scary

You don't have to pay that all at once. Call up your credit card/student loan/personal loan people and explain your problem. Set up a payment schedule that can work for you. Your parents? Can they let you pay that loan off later? Or pay less now?

Usually loan companies are willing to work with you. It's better than them not getting the money at all.

I know how you feel, I really do Don't let it get to you too much, you'll be okay.

__________________
Absence is to love what wind is to fire. It extinguishes the small, it enkindles the great.

maleficent

You don't have to tell your employer about filing for bankruptcy, per se, but you will have to supply your financial records, including pay stubs, creditors might also contact your employer.

In the states, bankruptcy stays on your record for 7 years, I believe, and a lot of companies do run credit checks before hiring someone. Would you hire someone with a bankruptcy? If you plan on moving, your landlord will run a credit check... the bankruptcy will show up there as well.. Would you rent to someone who had a bankruptcy?

You are young, so that works in your favor, but do you want the debt to your parents discharged by the courts? That's not fair to them.


Put away your credit cards. and get yourself into credit counseling to work out the debt, at the very least, tehy can work witht he creditors to get down the interest a little, they would rather get something, than nothing.

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gar1976

In the US it is illegal for collections agents to call you at work, IIRC. They can't call your neighbors, family, or friends either.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

maleficent

That's true in collection of a debt, but if the person is filing for bankruptcy, other phone calls might be made... but I'm not sure about that. I know they can't call in trying to collect a debt.

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gar1976

Think that applies even for bankruptcy, which is basically where you tell the unsecured creditors to "screw off I blew the loot."

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Strange Famous

thanks guys.

the loan to my parents doesnt need to be repaid right away, but I have to start repaying when my dad retires (about 4 years probably)

I have cut up my credit cards, and Im trying to increase the personal loan and move the balances onto that (lower interest rate)

the student loan is quite a low repayment, but it is taking forever to clear unfortunately.

What gets me down is, I have all this debt, and its like I have nothing to show for it, I mean there isnt anything I can sell back and make even some of the money back on, I just dont know how Ive got into this or what I spent all the money on. I sold my house to clear off my debts (I owned half the house, but I made about £12,000 off the sale), but it seems like somehow I've gotten back into almost as bad a situation as I was before. It's like, as if I've been stupifyed and suddenly I wake up and just cant believe I would get myself here.

I mean, I am not an absolute idiot, I used to be a financial accountant, I can understand the basic principles of spending more money than you have coming in... I dont know how I could let myself end up here, and for nothing... I just feel stupid to be in my situation, I cant really talk about it with anyone, because my parents dont know how bad it is, and if they did they'd be ashamed and just diss me for being an idiot - they might try and help, but I dont want to ask them to, neither of them can really afford it anyway.

I guess realistically, if I can get everything consolidated, I can pay off the bulk of it in 4 years (allowing for some salary increases and so on, which I should expect I guess), then maybe another 4/5 years to pay off my dad.... the prospect of being in debt till I'm 35 - probably not being able to get a mortgage or buy a house again - unless I have someone else to buy with - is all quite depressing!

But I know, everything that happened to put me here, I had more or less control over, so I cant say anything but that I did this all to myself.

__________________
"Do not tell lies, and do not do what you hate,
for all things are plain in the sight of Heaven. For nothing
hidden will not become manifest, and nothing covered will remain
without being uncovered."

The Gospel of Thomas

gar1976

It's easy to blow money on nothing at all. Funny how that worls - you don't have shit left over to show for it, and it sucks.

Good luck, keep us posted.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Bamrak

Hey man,
I know we've not agreed on much in the past, but I can only offer some advise for you. You are no where NEAR bankrupt.
Here would be my suggestion ( I'm currently on this same plan, so if you need to talk about it, my PM is open.)
1.[B]a WRITTEN budget ( excel will also work)- the purpose being so that you can identify where you are spending, and begin making a gameplan to start getting out of debt

2. Do not consolidate your debt unless you 1, change your spending habits and 2, close any and all loans, credit cards, and lines of credit.

3. Get some money in the bank as an emergency fund or a rainy day fund. The purpose being if an emergency happens, you don't have to fall back on credit.

4. Begin paying minimum payments on everything and all extra money will go on the smallest debt. Once that is paid, the extra and the payment of that will go to the next highest, and this repeats itself.

5. If this seems to move to slow, you may need a bigger shovel to dig yourself out with.. a second job might be in your future.
If my conversion is right.. you can get a minimum wage job for 25 hours a week, you can have the smallest credit card paid off in three months, the next largest in about 8 months... This is minimum wage with no other money.

Your lack oif understanding of where the money is going is because you have no gameplan with the money that is coming in... Running your household is much like running a business; there's no way you would run a business and hope to be profitable if you do not have a budget or a forecast.

Good luck man, and let me know if I can do anything to help.

Hayduke

ooooooopps.

Hayduke

Ok. Most important question.....what are the terms on the personal loan?

The interest on the student loan is a pittance so forget about that for the mo.
Your £4250 can be consolidated and moved onto a 0% card every year (this requires some action from you to apply for the balance transfer) but you can effectively have free credit until this is paid off. - You could even transfer your loan onto a 0 % card if your rating's ok........BUT!!!! AS SOON AS YOU TRANSFER AND YOU GET THE CARD-----CUT THE FUCKER UP!!!! I cannot stress how important this is.

If you want I'll work out a payment schedule based on your income.

I don't know your rent costs but if you hold onto £350pm you'll have paid everythig bar your folk's and the student debt in 2 3/4 yrs.

hokieian

The trick is to take it one month at a time.

As others have said, you might want to think about taking a second job for evenings/weekends for a while until you get your debt to a more comfortable place.

I would not even consider bankruptcy at this point - not worth it.

Transfer your credit cards onto one low interest card. This will give you only one check to write each month and will probably significantly reduce your interest rate if you shop around for a card that gives you a good deal on balance transfers.

In the US, bankruptcy doesn't wipe out student loans. But you probably have a low interest on that anyway, so just forget about that debt for now and pay off you higher interest debt first. Once your high interest debt is paid off, put all that money towards the debt with the next highest rate.

Talk to your parents and ask them if you could skip a few payments on their loan. Offer some kind of collateral (you may need to be creative if you don't have anything of value, physically - offer to wash their cars every weekend until you start payments back up or something like that) so that they know you are serious about paying it back.

It is slow going at first, but hang in there and remember that you are learning valuable lessons now (when you are young) that will help you out later on in life.

I've recommended it before in other threads, but I highly recommend picking up a copy of the book "You have more than you think" by David and Tom Gardner.

Good luck.

Undercover_Man

If I were you I'd pay off the two credit cards first and then concentrate on the student load and then your personal loan and then your parents since they're prolly more forgiving about late money than the others are.

- Undercover_Man