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Debt Advice Forum 3 years, 9 months ago.
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I have a few payday loans and the interest rates on them are extortionate so should i just declare myself bankrupt since these payday companies won’t help me?
Hi Steph,
Whether to declare yourself bankrupt or not would depend on a range of other factors to determine if that’s the best option.
How much debt do you have in total and do you work and/or have a disposable income each month?
Hi,
I have around £3,000 of debt and with the interest and charges every month i have no disposable income and that’s after i have cut back on food.
Well firstly it’s important your health comes first so don’t cut back on food unless you have been spending a large amount on it.
£3,000 would be a small amount of money to declare yourself bankrupt for, how much of that is the payday loans?
I was definitely not spending a lot of money of money, i’m down to about £100 a month for me and my child.
About £1000 of the debt is from payday loans but that’s increase all the time and they won’t stop adding charges.
I told them i was considering bankruptcy but they just said i would have to still pay even if i did become bankrupt is that true.
I know you’re trying hard to make payments towards these debts but we always advise your health is the most important factor. I would suggest increasing your budget to around £150 – £200.
In bankruptcy you will only pay what you can afford, after essentials such as food have been paid for.
Are you working at the moment and do you have any assets such as savings also where about’s in the UK do you live?
I don’t work and i only get jobseekers allowance, child benefit and child tax credits so surely they couldn’t take anything in bankruptcy?
I live in Manchester and no i don’t have any assets but i do wish i had some savings ha ha.
At this stage it is in the best interests of the payday loan companies to negotiate with you so i would try again to set an arrangement with them. If they refuse to set an arrangement or help you then advise them you will consider a DRO.
So long as you have such little income, no assets above £1,000 (including a car) then a debt relief order (DRO) is the best option.
A DRO is a route into bankruptcy and costs £90 but will mean you won’t pay anything towards your debt but does impact your credit rating.
Thanks i’ll give them a call but if these refuse to negotiate how do i start a debt relief order?
You will need a qualified money adviser to start the application. You will be able to find one at your local Citizens Advice Bureau.
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