Question

Jon I hope you can advise me on this matter.

I owe in total over £40,000, which I know is a lot. I owe on a few credit cards, some personal loans I took out to consolidate the credit cards a couple of times, and I also owe 2 family members around £5,000. I am so far in debt much of it due to a gambling addiction. I am working, but do not earn near enough to pay these debts. I feel bankruptcy is my only option. I do not own any property as I live in a housing association flat. I guess what I am asking is bankruptcy my best solution to these debts?

Robert

Answer

Robert,

From what you have stated, bankruptcy is an option, however, it is an option with some consequences.

There are a few things to address here, and one is the gambling addiction. Good on you to admit you have a problem with gambling. Have you gone to the Gamblers Anonymous web site or gone to any meetings? That is where you need to start.

Being in debt due to gambling brings about its own issues when you go bankrupt. You can go bankrupt, but a BRO or Bankruptcy Restriction Order may be issued. The BRO can keep you under the restrictions of bankruptcy longer than the usual 12 months. This may not be an issue for some, and for others it is an issue.

One option is to enter into a Debt Management Plan for a period of time, then look into going bankrupt. But first the gambling issue has to be addressed.

The money you owe family is another concern.

You can include those debts in a DMP or even in bankruptcy, however, that will not help your relationship with them.

While you are not to prefer a creditor in any insolvency or debt management plans, it is possible to go bankrupt, and after the bankruptcy begin paying back your family members. This is something you would do after you are discharged from bankruptcy, and it would be between you and your family members.

Let me know what you decide and we can look more at your situation.

Regards,

Jon

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