UK bankruptcy Question

[james17602]

Hi, we are going to start applying for NZ nex year (partner is doing a floristry course which is preventing us moving sooner)

however i do have 20k of debt outstanding and no real way of clearing them for next year.

i have spoke to a financial advisor who reccomended going bankrupt as it would give me a clear break for NZ.
as far as i know no credit records (such as CCJ`s bankruptcy) are shared with NZ?
I have searched through the forum and found mixed answers on getting credit such as motgages and loans etc so i am just after peoples views on doing this?

i could opt for an IVA which doesnt damage credit as much but i will be paying a minimum payment for about 5 years which i am not sure i can afford on NZ wages.

my partner has an exelent credit record so i guess we could use her credit background for any financial checks in NZ?

i just dont want it to spoil any chances of not getting in to NZ.

[Avalon]

James.

Firstly - welcome to the forum, and well done for being big enough to ask such a question (financal mess is such a hard one to come clean about).

Firstly - most people who migrate here dont seem to need credit records - thats true. But its not always the case - so do be slightly wary.

Secondly - please please please get a second opinion on whther the bancruptcy is the best option for you. Having never been bancrupt myself, I can give a personal view about this, but I do feel you have to get specific advise of experts in bancruptcy. There are a couple of agencies you can talk to about this and see if they aggree with the financial advisor: This is from Moneysavingexpert.com:

The three places I’d recommend are Consumer Credit Counselling Service 0800 138 1111, National Debtline 0808 808 4000, Citizens Advice or visit your local CAB centre. The sooner you talk to them the better. It may help you sleep at night.

In fact - my third piece of advise is to go to moneysavingexpert and trawl thier chat board:
http://forums.moneysavingexpert.com/...play.html?f=76
Thats the "Debt Free Wannabe" board. Loads of info and stories on there, some of whome went bancrupt - many who paid off the debts, and are still paying.

Then, if you find you can and want to pay off teh debt - get stuck in. There ARE ways to do it. I paid off 10K in a year (salary of 32K). You dont mention if you have houses to sell - I take it you dont? Becasue of course the equity on that can pay off the debt once you sell.

If you go down this route - then the way to do it is to get your interest payments as low as possible: negotiate if you can and swap money onto cheaper cards if possible - MSE will have good info about which CC are cheapest. DONT consolidate with an agency - it makes matters worse in almost all cases. MSE hasa "snowball calculator" which can help you determine the order in which yo should pay off debts if you have more than one.

In a nutshell - pay the minimum on all debts. Then find that bit extra and pay that onto the first debt. Once that is gone, take the WHOLE of that payment, and ADD it to the minimum on the second debt. Once that is gone take the whole of that payments (2nd Minimum + 1st minimum + extra) and add it onto the third debt, and so on.

You would also need to learn to budget (dirty word I know), and again I would say get onto MSE for help. He has a budget calculator if you dont want to do one yourself. And If you can get hold of Anita Bell's Books "how to pay off your motgage in 5 years" and "your money, starting out and start over" - then do - becasue they are brilliant.

Finally (i Promise ) If you do try to pay it off - Allow yourself and your partner a "Sanity Allowance" each month. This is the one single item that got us from debt to comfortable and allows us to stay pretty healthy financially. It a small "pocket money" allowance each month - we had £50 each in the UK, but it could be less if it needs to be. What you spend it on is up to you - but the main rule is that you DO NOT need to justify how you spend it to each other. You wanna blow the lot on chocolate - you can. This pays for luxuries - cd's books, clothes etc. Really - its up to you both - but this is for unbudgeted items, that cant be paid out of household monies.

I hope that helps - please ask if any of it doesnt make sense.

Good luck.

[Smiler]

Hi James

I really can't add anything to Avalons post. She really is the forum resident money guru.

I just wanted to say Welcome to the forum and good luck with all your NZ plans.

[james17602]

wow thanks for the reply.

i have spoke to 2 financial advisors up to now and both say the same.

i could really do with becoming bankrupt so we can get some savings behind us.

basicly me and my girlfreind both still live with out parants (i am 26 she is 21) which sucks but means we can save like hell, however my debts are preventing this.

our aim is to move to nz ( 80% chance i can transfer with my present company) and rent until we can maybe buy somewhere once we are settled and hopefully build up a good financial/credit rating.

only thing i am worried about is if it will affect my application in anyway,


thanks for the welcome as well

i did join in feb but have just be lurking since then

[voxel]

Before declaring bankruptcy, check that the UK or the trustee doesn't take away your passport (in Canada they did - or still do?). I think many countries ask if you have declared bankruptcy in your home country when applying for visas.

[Smiler]

wow thanks for the reply.

i have spoke to 2 financial advisors up to now and both say the same.

i could really do with becoming bankrupt so we can get some savings behind us.

basicly me and my girlfreind both still live with out parants (i am 26 she is 21) which sucks but means we can save like hell, however my debts are preventing this.

our aim is to move to nz ( 80% chance i can transfer with my present company) and rent until we can maybe buy somewhere once we are settled and hopefully build up a good financial/credit rating.

only thing i am worried about is if it will affect my application in anyway,


thanks for the welcome as well

i did join in feb but have just be lurking since then

James

Could you not both save like mad to pay off your debts. Then start afresh saving for NZ.

You may need to put you plans on hold for a while but at least you could come to NZ knowing you have left nothing that could pop up and bite your bottom in the future. You'd leave with a clean conscience and a healthy bank balance to start you off.

[Avalon]

Before declaring bankruptcy, check that the UK or the trustee doesn't take away your passport (in Canada they did - or still do?). I think many countries ask if you have declared bankruptcy in your home country when applying for visas.

Ooh - I was going to say that - but I gather from some of the threads on MSE that this may not be the case in the UK and I do have a friend who has been bancrupt and still has thier passport. On saying that - theres NO info on whether it makes a difference fro Visa Applications and as Ive already said - I really feel EXPERT advise is needed my understanding is that cases are handled individually).

This is a really valid point & and vitally important. Hopefully James you will take this on board and make really sure that you want to do this. Bancruptcy is NOT an easy way out of your problem.

I would also never take advise on this from a financial advisor. They sell financial products - they are not experts on Debt problems

Also aggree with Smiler - if you live at home - why not get the debt paid off and then when you have done that - come to NZ. Apart from anything - life in NZ is VERY hard financially for most people (see Spudulikes thread and read through all of that)- and I worry that If you do not learn some skills to deal with money - then you will have an incredibly hard time coping here without the backup of living at home.

I have to say - harsh at it seems - pay off the debt. You spent it. Its not right to expect others to pay it for you - and thats what happens when you go bancrupt. Someone has to pay that money - if you dont - then one way or another it gets passed on to other people in the way of higher charges / costs - and thats not right. Pay it off - and I pretty much guarentee you will think REAL hard before incurring that much debt in the future. You will also learn how to cope with money - and that will make your life here so much easier.