I became bankrupt in July 2007 and can honestly say it was the best thing I have ever done. Ok sometimes I have the odd wobbly moment but in general it needed to be done.
It all started when a few years before I had the usual student debt and paid off what I could each month and there wasn’t much to worry about. I met a man and decided to get married and buy a house. Nothing special but that’s what we did. Now I still had student status so we decided that the mortgage should be in his name and to do this I would take on his debts. So this was done. In the past when I was paying off my debt I would pay whatever free money I had to enable me to get rid of the debt as soon as possible. Now my then husband didn’t quite feel the same and insisted that only the minimum payment to the very pence was paid. I didn’t envisage bankruptcy at this stage.
Less than two years later the marriage failed and I left to set up by myself again. I rented a new flat that was furnished and some friends gifted me the deposit and first months rent. I soon became very settled and immediately went about paying more than the minimum payment and decided to file for divorce.
For a quick divorce I didn’t want to argue about half the house or debts or anything and was advised that because the marriage was so short it wouldn’t be in my best interest to do so. With my legal fees costing about 1k per month I was unable to pay more than the minimum payments off my debts and things started to go around in circles. I would pay some money off a credit card debt then have no money to pay the electric bill so would put that back onto the card.
During my divorce day in court the judge commented that with the current financial situation and the fact that I didn’t own a home or have saving then bankruptcy would be a good option so I started to look at the bankruptcy forms.
I found an adviser who gave the first appointment free.
I showed him the forms I had printed and a breakdown of my debts which were by now £35k on credit cards. Because I had never missed any payments but just kept on going round in circles and with the interest adding up he gave me the telephone number to book ‘my day in court’ and advised me to stop paying all the debts right away and not give any favouritism as I would need to save that money to pay for my court fees.
At the time he thought that it would only take about three weeks for the day in the bankruptcy court to come but in reality is was 9 weeks I had to wait. This was the lowest point for me as this is when the letters came and the charges were adding up and I knew it was too late to turn back. I also chose not to tell any members of my family, a decision which I regret now (but I’ll explain later). I did tell one close friend and arranged for my work to pay my salary into their account until things had settled down. It was also awful to tell work as my contract states that becoming a bankrupt or entering into an IVA COULD lead to dismissal. The HR department and finance director where both fine however seeing that my mind was made up and that the debt was built privately rather than from a side line or business. However my expense and mileage claim were under close scrutiny for at least two years after the bankruptcy and I often had to explain the need to claim for simple things like printer paper and stamps.
Okay, so I filled the forms out and waited with a brick sized wedge of bank statements and credit card statements and went in my best suit to court.
I handed over my fees of £470 only to find that while waiting for the date to come it had gone up to £490 and had to rummage desperately for the extra £20 whilst panicking that it was all over and I’d miss my chance for the sake of £20. But with some crumpled fivers and the loose change I had for the bus and some 2p’s in the bottom of my bag I managed it and was left with nothing but 3p to my name.
The receptionist then gave me a receipt and said goodbye someone will call me in the afternoon once the judge has seen my case. I couldn’t believe it that was it all over!
I went straight from court to a bank and opened a basic bank account and sent the new details to my work to arrange for my salary to go into my new account.
The official receiver then rang me that afternoon and was excellent and worked out all my income and out goings and decided that there wasn’t enough cash to pay back each month except my tax as I would be given a zero tax code and would pay that back each month with a paying in book that was sent to me by an accountancy firm.
So that’s what I did until the next financial year started and then early in august 2008 I had a letter to say I was discharged by the court from May 2008.
Since then life has been good I am on a good salary and now have £8k in savings.
I still have my basic bank account and have not been able to get a debit card but do have a credit card for persons with bad credit and have managed my account well and now have a high credit limit and now it’s a gold card. I also have an account for a catalogue which also gets paid off in full every month.
The only issue is the pressure is now on to get a mortgage. Now I recently looked into a little bit of finance for a car loan. I have £2k a month going into my bank account and have my savings and only wanted to borrow £3k over 2 years but as soon as I click apply I get stopped in my tracks before I even start with a message saying they won’t even consider me. That is the down side of not telling my family or friends from the start about my bankruptcy when your parents are saying ‘life is to short, you’re on a good wage, you’re 30 now you should own a home. It becomes really hard. I won’t tell them, not now not ever.
My bankruptcy was 3 years ago now and life is very different than when I became so heavily in debt. Yes you could say that I am reformed and will never get into that type of debt again and have learnt many lessons but not being able to get even just a 3k loan has really knocked me for six. The feeling I have had for the last three years that it was the best thing I ever did is now not so strong but I guess it’s too late now and I’d hate to think what life would be like now if I hadn’t become a bankrupt.
