Hi. I have an awful lot of debt, so much that I am too embarrassed to actually openly admit it. I've had it for about 5 years now, and decided about 5 years ago to take out an IVA - big mistake, I've ended up in more bother as the company I chose was awful. As it turns out, I'm going to have to go bankrupt. Gutted.
Prior to taking out an IVA, I was going to consolidate. However, I backed out at the last minute, as they wanted me to pay more than I could afford, and we're trying to convince me I could afford it when I clearly couldn't
Do you think your work situation will improve any time soon? If yes, then you may be as well carrying on as you are for the very short term. If not, then perhaps an IVA would be better for you? They last for 5 years, and whatever isn't paid off after the 5 years gets wiped out.
Or actually, there is a newish thing called Debt Relief Orders.
A debt relief order is an order you can apply for if you can't afford to pay off your debts. It's granted by the Insolvency Service and is a cheaper option than going bankrupt.
You must have debts of less than £15,000 and a low income.
A debt relief order usually lasts for a year and during that time, none of the people you owe money to (your creditors) will be able to take action aginst you to get their money back. At the end of the year, you'll be free of all the debts listed in the order.
You can't apply for a debt relief order if you:
own things of value or have savings of over £300
own a vehicle worth more than £1,000.
To apply for a DRO, you'll need to contact an authorised adviser who checks whether you meet the conditions and then applies for the order on your behalf. The order will cost you £90 but you can pay this in instalments over six months
- that info was ripped from the CAB website. I visited them, and they are great for advice.
Debt relief orders
Some may consider these options the easy way out when it comes to debt. But as someone who has had this looming over them for 5 years, it ain't an easy option!
Please be aware, I am not a financial advisor, just someone who is in a similar position. I strongly recommend you speak to Citizens Advice Bureau, they really are great.
And please be very aware of companies which look legit - they aren't always as helpful as you would hope. Some disguise themselves as debt helplines, but all they want to do is sell you their products.
Hope things improve for you soon x