During the six months prior to my bankruptcy work life and home life was extremely difficult. There were constant battles at work to recover the business, continuous hounding from the creditors and because much of my time was devoted to the business my relationship with Miss Piggy suffered.
Discussing this financial predicament with Miss Piggy was obviously going to be a difficult task. After all – she didn’t contribute to the problem yet was going to suffer the adverse effects of bankruptcy with me! I was just going to add more weight to her already existing problems. None the less bankruptcy and bankruptcy alternatives were topics we couldn’t avoid.
Considering the circumstances she coped well. There were no surprises to her regarding my financial position but the sounds of bankruptcy were ever more a daunting realisation. I didn’t really know how she would react due to the stigma that has been placed on bankruptcy in the past.
It’s fair to say that at times our discussions were heated and due to the sheer nature of bankruptcy they did not take place over night. There would be times when a television advert or some news from me would prompt a discussion.
I often found that the subject would be the cause of much unhappiness during the time leading up to the bankruptcy. When you think about it money is everywhere – whether you are in the shop buying a paper or a friend is talking about the fantastic holiday they recently booked. There is always a topic to trigger emotion. Sometimes it would be fine and other times, out of the blue, a conversation would blow into an argument just because of money! What else could I expect though? I was unemployed, going through bankruptcy and Miss Piggy was on the receiving end too.
Dealing with the emotional effects was not something I could read on a website or speak to a debt advice centre about. Armed with knowledge though I was at least able to satisfy Miss Piggy’s queries and curiosity. This often helped in addressing her concerns and dealing with difficult situations where panic arose.
As discussions took place it became apparent that the main concerns for Miss Piggy were:
- The uncertainty of our plans for the forthcoming years – Would we be able to get a mortgage? Would we be able to afford marriage and children any time soon?
- Her credit rating – would it be affected?
- Uncertainty about our lifestyle for the next couple of years. Would we have a social life? Would we be able to go on holidays? After all we are both in our mid to late twenties.
- How long will the bankruptcy and its effects last and what happens after?
Whilst researching the effects of bankruptcy I ensured I addressed these concerns, as it was essential that I had Miss Piggy’s support. For me, a life changing experience such as bankruptcy required a team effort if our relationship was to survive. After all it does impact her life too.
Effects of Bankruptcy
Making the decision about bankruptcy was never going to be easy. It required a good understanding of the benefits and consequences of bankruptcy and bankruptcy alternatives. Why bankruptcy alternatives? Bankruptcy may not be the best route if it can be avoided.
It was critical to seek advice before embarking on my journey. I needed to know that it was my best option and what the effect on my life would be. I sought the advice of a solicitor, primarily because of the business complications.
So what were my options?
- Do nothing and let the business continue in the hope that it will perform better than it has previously and repay the creditors leaving me without any liability.
Given that I strongly believed this was unlikely I decided against this option. It was my view that for every day the company continued to trade it would be another day closer to bankruptcy and yet another day I would have regretted not taking action sooner. Burying my head in the sand rings a bell – especially considering the struggle with my personal debt!
- An Individual Voluntary Arrangement.
Putting a proposal to the creditors to repay a percentage of the debt was not an option for me. I was unemployed and hence had nothing to offer. Neither did I have any assets. An advisor will usually suggest an IVA to help you avoid bankruptcy
- Bankruptcy.
Given that my personal objective was to wipe the slate clean and avoid problems coming back to haunt me in a few years bankruptcy seemed to be the best option.
For many there are other bankruptcy alternatives to help avoid bankruptcy. Examples include:
- An informal arrangement. Writing to your creditors and making an offer of payment that is timetabled and within your budget could help you reach a compromise with the creditors. Whilst this arrangement is not legally binding it may help you avoid bankruptcy.
- An administration order. If your total debts do not exceed £5,000, you have a regular income and have one or more county court judgements against you this court based procedure may help to repay the debts.
Before finalising my decision though I needed to research further and ensure that I was happy with the effects of bankruptcy and considered all the alternatives carefully. Equally important was looking at the various options and discussing with Miss Piggy.
The best decision I made when facing this debt problem was to seek advice. Much of the worry, stress and uncertainty was taken away. Better still I managed to resolve my problem in the best way possible so I could start living my life again!
People accumulate debt in various ways such as business, gambling, shopping, health problems, job loss, redundancy and relationship breakdowns amongst others. I built up almost £33,000 of debt through loans and credit cards as a student and a whopping £450,000 plus through a business I started not long after university, all coming to an end at the age of 27 when I declared myself bankrupt.
Bankruptcy suddenly became a realisation for me when my business went from good to bad:
After discussing the possibility of starting an insurance brokerage with two colleagues we decided to go for it. At their flat and with no capital behind us we started telemarketing using the BT phone book. From there we grew the business to employ 20 staff and a turnover of about half a million pounds per year. It was great – we were becoming a prominent player in the online market and had several major life insurance companies showing interest.
Then it went downhill very quickly. Unprecedented changes in the industry very quickly impacted a small company such as ours. The debt began to build and every little problem seemed to have financial consequence. The company became insolvent and appointing an insolvency practitioner was the responsible action to take. Unfortunately the other two directors disagreed and were happy to continue trading so I resigned.
Unemployed with £33,000 of personal debt I could barely manage and a potential £450,000 plus of debt that depended on the success of the company called for a careful review of my personal finances. I had little faith in the leadership of the company to direct it out of insolvency, which in essence meant the £450,000 was a harsh reality!
Before making the decision to petition for bankruptcy I knew there were several lifestyle factors to consider first:
- My personal objectives for the forthcoming years and how bankruptcy would impact. What are the long term effects? What would be the affect on Miss Piggy?
- My short term financial position as any proposal to creditors to aviod bankruptcy would have to be acceptable. Was a bankruptcy alternative a consideration?
- Having worked in financial services for the last 4 years threw a spanner in the works as personal bankruptcy would have serious consequences for my career. Would I still be able to work in financial services?
- What about the stigma of bankruptcy?
Luckily I didn’t have a house or any other valuable assets to complicate the decision further.
Since petitioning for bankruptcy I have come to realise that the hardest part is weighing up the alternatives and Deciding on Bankruptcy.
Bankruptcy happened to me in early 2006 and in an effort to share my experience I’ve since decided to write this blog. You will read what I experienced throughout the bankruptcy process and how credit cards, student loans and a business landed me with almost half a million pounds of debt.
I hope to project that while bankruptcy serves its purpose it can have some very serious consequences and that life itself can make the experience that much more unpleasant. As time goes on I hope to show that bankruptcy, or indeed any serious debt solution, does not need to inhibit your life ambitions and that it is possible to get back on your own two feet – hopefully stronger and wiser than before.
For me, the last nine months of my life have been difficult. Living in a city I love so much and limited by the financial consequence of bankruptcy I have endured much unpleasantness. About five months into the bankruptcy Miss Piggy and I parted ways. Subsequently my Gran passed away and Miss Piggy moved out leaving me to cover the rent and replace some of the household materials she had contributed. No one told me it would be like this!
Finding the information you want about bankruptcy isn’t always easy. Yes there are plenty of sites offering services and solutions to your debt problems but no real perspective from someone who has recently experienced bankruptcy themselves. After all it should be obvious now, bankruptcy never comes at a good time and it’s not just our possessions we stand to lose. Sometimes our dignity and loved ones disappear too.
When considering bankruptcy I didn’t know where to start. All I knew is that my debts would be wiped and my credit history destroyed. I had a million questions whirling around in my head and needed to know:
- What can I expect when going through bankruptcy?
- What would be the affect on my partner?
- Can I avoid bankruptcy?
- What will happen to my assets?
- When should I declare myself bankrupt?
- What will happen at the bankruptcy court?
- What will happen after bankruptcy?
- What are the consequences of bankruptcy in relation to me?
- Where can I get bankruptcy advice and help about bankruptcy alternatives?
I hope that by describing my experience I can answer some of these questions for people who are considering bankruptcy or are actually experiencing the effects right now.
One important factor to stress:
If bankruptcy is being considered as a course of action it’s essential to take advice. It’s thanks to good advice from a number organisations that I avoided some of the sleepless nights people manage to go through for months and months.
More about Piggy Bankrupt
