Six months (and a day)

Here we are, half way.

For the first time in a very long time I feel human again - and it feels good. Last week I spent five days visiting an old (and wonderful) friend. I drank too much of his beer (not that he minded), we talked constantly (about everything under the sun), I discovered that he can't play poker (to save his life), and for the first time in aeons I feel fully refreshed. It's a long time since my batteries were full; a very long time.

I haven't posted much of late. Well, here's the revelation - on top of everything that the last year has brought my wife left me a few months ago; I was devastated. For the first time since then I am able to look forward rather than think of the past. It might be fleeting, but it's a feeling that I know will return, and it feels good.

The bankruptcy? Right now, I don't give a shit; I'm 45 and I'm trying to build my life from square one.

Thank you Gregor, and remember the guiding mantra from the Big Lebowski - 'Fuck it, Dude. Let's go bowling.'

Five months

Is this how it's going to be from here on in - just counting the months? For good or bad life has achieved 'normality', whatever that means.

Five months. I'll give it another month and then risk a letter to the Insolvency Service to see what their intentions are (if any yet) about the house.

Four months

Yesterday was exactly four months since my bankruptcy. Interestingly, I didn't notice - has real life finally replaced bankruptcy as my number one priority?

Last week I received confirmation of my Income Payment Agreement (IPA). I am to make all payments to a firm of solicitors based in the South of England called Moon Beever. My first payment is due soon - I've actually paid it already online and I'll set up a standing order for the rest of the payments. Glad I can actually begin payments.

Still no news on the house though.

A message from the BBC

A few weeks ago I was contacted by a BBC researcher called Jonathan Davenport. He asked if I would be interested in appearing on a show due for broadcast on BBC TV sometime in July - the programme (actually a set of three programmes I think) is to cover many money related issues and as part of that they want to hear stories from people who have gone through insolvency. After much thought (you wouldn't believe how much) I decided to decline his offer. It was a very difficult decision as I feel very strongly that it is important to get our insolvency experiences to a wider audience - if only to counteract the ridiculous stories of bankers being paid millions in bonuses! Last year one in every 320 adults in our country went insolvent, one in ten never clear their overdrafts each month - we are a substantial group and our voices should be heard and our experiences should be told.

In the end my decision wasn't based on what my family and friends thought of me (everyone to a man has been totally supportive), but based on my work. I'm employed in quite a large organisation and there was always the possibility that my bankruptcy being made public could make my position untenable - and frankly I need the money. To assuage my guilt I offered to post a message on this blog for Jonathan - I hope that some of you will contact him. Here is his message:

Are you in an IVA/DMP or going bankrupt?

Have you had the right advice?

Do you want to share your story?

My name's Jonathan and I'm researching a new series for BBC 2 called Money Watch - looking at people's real life financial stories across the country. I'd like to hear your experiences about what it's like dealing with debt. If you're interested this could lead to some filming for the show. I look forward to hearing from you - my number's 020 8008 3989 or email's jonathan.davenport@bbc.co.uk

----------------------------

Jonathan Davenport

Money Watch

MC4 B4, BBC Media Centre

London, W12 7TQ

Tel: 020 8008 3989

Received this recently from Marc :

Hi Joe,

I came across your blog this morning and have just spent 30 minutes browsing through it – shame I didn’t come across it earlier! I went through the bankruptcy process myself late last year and like you I found it all a bit surreal in the end. I declared bankruptcy in Hull along with 4 other people on the same day, also just average Joes, if you’ll pardon the expression! I’ve starting telling friends and family now, and they’ve been quite supportive. To be honest, I really ought to have confided in them earlier.

It really doesn’t surprise me the statistic you quote on your blog, about 1 in 320 people in 2009. The attitude and tactics of some of my creditors was pretty shocking, and caused so much stress. I wish I’d gone and made the petition for bankruptcy a year earlier already, there were just so many incidents of paying something off but ending up with a bigger bill by the end of the month. I certainly wasn’t helping myself, and given that I hadn’t been doing anything stupid or reckless to get in to debt it just made me so angry.

One of my childhood friends, it turns out, used to work for the Insolvency Service and we’ve decided to try to do something positive and offer advice to people who are going down the bankruptcy route. You wrote somewhere about having a grand or two stashed away at the end, and I couldn’t agree more! It came in so useful for all the little items, and the not so little items like the £510 fee itself – it’s just ridiculous, isn’t it? Our aim is to help honest people applying for bankruptcy do so in the most advantageous way for them. We put together our website, www.bankruptcy-angel.com just last week and would be honoured if you’d mention it on your site.

I look forward to reading more about how your bankruptcy period unfolds,

Kind regards, and good luck!

Marc

Disclaimer: I've not used any of their services, am not connected with any of them, receive no kick-backs whatsoever, and I'm not responsible for them. If you choose to give anyone any of your hard-earned cash then (as always) 'buyer beware'

One in Ten

Another non-surprise (to those of us in the know) hit the headlines last week - more bad news for all the average Joes out there.

"Five million Britons are permanently overdrawn, and rising inflation could force more to live on their overdrafts, says product comparison website moneysupermarket.com."

From the Guardian, http://www.guardian.co.uk/money/2010/feb/23/five-million-brits-permanently-overdrawn

What's that, 1 in 10 of the adult population?

Accepting the Income Payment Agreement

Life takes its toll occasionally, and so I've taken a brief break from writing about bankruptcy - for a while there I needed to remember that I'm simply a person too rather than just a bankruptee.

I now have some good news to report. The Official Receiver has reduced my Income Payment Agreement (IPA) payment to a lower (and payable) sum. I used the basis of the figures in Data for family expenditure (available as a spreadsheet from the Insolvency Service's website - www.insolvency.gov.uk/DocumentLibrary/Policy/Excel/Household%20Expenditur.xls) to challenge some of the Official Receiver's original views on my outgoings and I was successful in most areas. One thing surprised me - I wasn't allowed £20 a month to give the kids at least some enjoyable experiences during the holidays. No complaints though, I immediately signed the agreement and expect my copy through the post any day. I'm actually looking forward to beginning to pay the IPA - the sooner I start the sooner the 36th payment.

Still no news on the house - but I know I'll hear at some point and I'm not pressing for it.

Three months

Three months into the bankruptcy. Doesn't time fly when you're having fun.

Poor Barclays

Poor old Barclays, they only made a profit of 11.6 BILLION last year. What the hell is wrong with our civilisation?

BBC News story : UK bank Barclays reports profits up 92% to £11.6bn

'We were the same as you' - Penny's story

This is Penny's story - thanks to Penny for allowing me to bring it to you all:

We went through similar problems about 8 years ago and entered an IVA in November 2002. Boy I wish your blog had been there then!

We both agree that the whole process of becoming insolvent, dealing with creditors and going into the IVA was the worst and best thing that ever happened to us. We had months of threatening phone calls, letters and stress and then the feeling that we were somehow morally lacking because we were in a financial mess and needed someone elses help to get us into the IVA.

We were the same as you - no exotic holidays (we have never taken a foreign holiday as they are too expensive), no flash or new cars (could only ever afford second hand ones), a smallish mortgage for our ex-council house and our food and clothes bills were very much made up of necessities rather than treats and luxuries. We both worked full time and at the time our four children were aged between 7 and 16.

We made ends meet with credit cards, catalogues (for clothes for the kids) and small bank loans for when we needed to replace the car. It didn't take much for us to cross the line into financial disaster. Although we entered the IVA with unsecured debts of 35k, what triggered the whole thing was a catalogue company starting court proceedings against us for a £230 bill. We had been struggling for a while by that point and had tried to reach agreements with the creditors, but the catalogue firm wouldn't play ball.

The sound of the phone ringing or post coming through the door was enough to send me running for the toilet to vomit (really) and X (my hubby) had a breakdown and needed 6 months off work - the last thing we needed at the time. Despite starting IVA proceedings, we still had letters and nasty phone calls until mid 2003 and after the IVA was made one of the banks tried to force us to sell the house for a 7k bank loan. This was totally illegal, but the stress of that set both of us back to square one emotionally.

To cut a long story short - we got through it and so will you. We paid off the IVA early (although the administrators didn't want us to) and we now have perfect credit scores. We still only have our little mortgage and only ever deal in cash - no overdrafts or cards and if we can't afford something we wait till we can. Its hard but my one fear in life is being back to where we were in 2002. It broke both of us emotionally and its taken us a long time to get over it.

Almost 8 years later we are wiser and far more appreciative of the things we have that don't cost money - its just a shame we had to hit rock bottom to realise it. Corny but true.

I think what I am trying to say is hang on in there. There is life after financial hell and at the end of the day its only money. If you haven't got it they can't take it and they can only take your dignity if you let them.

'I went the opposite way to bankruptcy' - Twonk's story

I received a stunning email the other day from Twonk - and he was gracious enough to let me post it here:

i went the opposite way to bankruptcy:

i was working flat out more than 40 hours a week, getting nowhere, my wages just paid off credit card interest and late charges etc.

one card we had, allowed us to take a 3 month lower payment plan to get back on top of it, months later it was revealed on the statements that during the 3 months, the extra interest and charges they put on were more than i was paying originally, they may as well have kept us on the original plan and charged us as they were.

next up came the wife's card, her wage went in the bank a day late, when it finally landed, she rang her card company to make a payment over the phone.

i sat and listened as she paid the £78 monthly payment, only to see her face change from relief that she had paid it, to horror as she was being charged £25 for being one day late with her payment.

i took the phone off her and argued about it with the advisor and her manager, all to no avail.

after paying £78 off her bill, she actually ended up with a £12 higher bill, and her £78 quid counted for nothing.

that was the straw that broke the camel's back...... no more i told her!

i defaulted on the lot and waited for letters to arrive, some came within weeks, some took almost 12 months, after selling the debt onto collection agents and debt collectors.

i walked from my full time job, my attitude was, if i havent got nowt they cant take nowt.... by complete luck, it turned out to be a masterstroke.

to this day, every single one of our debts has been frozen at £5 per month, some with a court order saying it, some without, each one without adding interest or charges, no more hassles of mail drops, crafty postcards, threats of doorstep visits etc.

we have even beaten a top high st bank in court and stopped them from hitting our home with a charging order.

the way we did this was simple:

stopping all communication hassles - administration of justice act 1972 forbids "harrassment of a would be debtor" - which means phone and doorstep hassles stopped within two weeks, and was illegal, i sent letters out that communication would be dealt with in writing only, failure to adhere to this request meant i could walk into a police station and have the company charged if they didnt refrain from doing it. if a company are charged under this act, they could be deemed to be unfit to hold a consumer credit license - therefor they would not be able to trade anymore - i reminded them of this in the letters.

to date every single hassle has stopped, apart from the odd letter offering to knock 2 thousand off our bill total if we settle in full

the weight this lifted from us was immeasurable. i dont think people who are not in debt realise how much pressure all the phone calls and doorstep visits creates.

ignoring advice from the companies who we owed money to - first rule i set myself, was to trust the magistrates system instead of what we were being told by those we owed money to - i sussed out straight away, that the things we were being told were only designed to benefit them and not us.

like giving the company a break down of our income and expenditure (including all our other creditors) was a legal requirement... it is not, so i told them nothing - only the courts can demand a complete breakdown of income and outgoings by law.

like when the company told us we could only pay them a minimum amount each month that they would find acceptable - which was a lie - i wrote and offered them £5 per month and they refused the offer, i told them i wanted their decision in writing, only 1 company out of 12 gave us this in writing, as i could use it in court against them, as its simply not true.

i had to hassle them in writing for their sort code and account number, to pay in my £5 per calendar month, they often didnt want to give it to us, knowing as i did that should i have an established record of paying even a basic amount of money to them, the courts would pin them down on why they were bringing it to court in the first place when they were being paid regular (albeit minimal amounts) of legal tender and that we hadnt just ignored their requests for money.

i made sure i paid them £5 per calendar month religously, which showed any magistrate that we were true to our word.

contesting any charging order court application in person - the most important rule when companies tell people that a charging order against their home is "just a formality to secure the debt so they could accept our minimal payment" is that it simply is not true.

we had taken great care when using cards or getting a loan to make sure it was not secured against our home!

one company dropped a summons via the automated court system on our mat on christmas eve, after 11 months of saying it would goto court.

it is vital that this case was heard before a magistrate where i live - which is my right

once in court, the solicitor tried to get us to accept this clause immediately before we went in to see the magistrate, when i said i was defending against it he laughed and walked off.

when we got in to see the magistrate, the solicitor for the company stated that not only was he seeking the charging order, but also he wanted it enforcing immediately - meaning he was enforcing the sale of our home to get the 4 grand for his company - exactly the opposite we had been told by him and his legal letters for months!

when it came to our turn to speak, we gave the magistrate the "three strikes" defence:

- unfair advantage over other creditors

- we wanted a refund of all the extra interest charged from it being an unsecured loan as it would now be a secured loan

- the company refused to give us sort code and account number to make minimal payments which is against the law

the magistrate put these questions to their solicitor who looked ambling and turned greener with each one!

the charging order was refused and the minimal £5 payments were accepted by the judge.

in despiration, the solicitor argued that it would take 114 years to pay the debt off, the judge's reply was "tough!" times are hard for all concerned he said and ruled against it.

now we have this court order that stops a charging order, it means any other company trying this route will be refused as the law states that all creditors should be treated the same, and to grant one would give that company an unfair advantage over another company.

our lives have been transformed, i have a little part time job now, i dont have money in my pocket, because i dont need money in my pocket

we live basically, shopping away from supermarkets, knocking down independant shops in price, and we eat better than we have ever done, fresh fruit and veg, fresh meat every week, fresh fish etc.

i do jobs for people to help them out and in return they do jobs for me, no money needs to change hands.

we have no pressures anymore of creditors banging at the door, we dont dred the postman calling anymore, and we dont run around like headless chickens both working full time flat out, we have time to nip to the beach in an afternoon, or the park etc.

we smile and laugh at the simple things, we dont spend hours on the phone chasing around to get charges paid back... as we dont have any, we dont pay big wads of interest..... we should have done this years ago.

occasionally, i get a bit of cash in hand work, but on the whole, i work when i want to, no weekends, no late shifts, no sat in rush hour traffic for hours each week, etc.

sometimes its fun to watch all the neighbours running around like nutters and standing still!

Keep those emails coming please

Since being linked to by the BBC News website I've had a fair few emails - please keep them coming, it's great to hear from you all. Some of you have been telling me about the routes you have taken through insolvency and there are some real eye-openers out there - stuff I wish I'd known over the last six months. With the permission of the individuals involved I hope to bring some of these emails into the blog - so stay tuned!

By the way, one particular reader told me that it was refreshing to read someone's insolvency experiences in a way that was informative without it being used to 'sell' him anything. Well, I'd like to confirm now to you all that this blog will never be used to sell anything, nor will it ever have adverts. This blog was never intended as a way to make money- I think I've proved I'm pretty crap with money anyway ;-)

Record breaking

The BBC have covered the figures too: http://news.bbc.co.uk/1/hi/business/8499939.stm

"Over 2009 as a whole, there were 134,142 people declared insolvent in England and Wales. This was up 26% compared with 2008, and higher than the previous record - in 2006 - of 107,288. Records began in 1960."

There you go, I'm a record breaker - and I didn't even know it.

Update : I posted a comment on this page - in fact this:

I'm one of the 134,142 people declared insolvent last year - or to put it another way, I'm one of the 1 in 320 adults in England and Wales who became insolvent in 2009.

These days bankruptcy is seen as 'an easy way out of debt' - and I wouldn't be surprised if you received emails in this vein.

The truth is that bankruptcy is a terrifying experience. I'm about two and a half months into my bankruptcy and only now is my life attaining any level of normality - or rather a new normality. On my day in Court six of us were declared bankrupt - just average people that you would pass on the street - all walks of life, men, women, young, old.

What I would like everyone to know is that there are so many others out there living on this precipice - something like a million people. Before you judge these 134,142 individuals please remember the millions who are already sliding into this hole, and all those uncounted millions who are only one small disaster from being included in this year's figures. I hope you are not one of them.

On the basis of this I received an email from a BBC journalist doing a piece on the bankruptees side of the story, and so was interviewed over the phone for something like 15 to 20 minutes. I hope I gave him useful information - I tend to suffer from verbal diarrhoea when I'm talking about something I'm passionate about. He said there was a possibility that this blog might get linked to - I hope so, if it reaches a wider audience and helps one more poor soul going through insolvency then it's all worthwhile.

Update 2 : No link, but still they managed to make me sound coherent - thanks BBC!

http://news.bbc.co.uk/1/hi/business/8501489.stm

Update 3 : How nice of them - they added the link!

Tip of the iceberg

No real surprise but in an article in the Guardian:

"Around a million people in the UK are struggling with debts without seeking help from their creditors, insolvency professionals said today."

http://www.guardian.co.uk/money/2010/feb/05/bankruptcy-figures-expected-record-high

This has similar figures to the report by Shelter last month, something I blogged about then.

The Grauniad covers the latest insolvency figures

The Guardian covered the new figures today : http://www.guardian.co.uk/money/2010/feb/05/insolvency-figures-hit-record-high

Sorry, but I couldn't resist posting a message to them - amazing how little the average Gruaniad reader actually understands about the terrors of bankruptcy. I'm sure someone will shoot me down in flames, but it had to be said.

Update : Actually those that commented on my comment were largely supportive - chalk one up for our side.

(Lack of) money equals stress

From the Guardian, Wednesday 3rd February 2010:

"Money worries are the main concern of stressed-out Britons, according to the result of a poll published today which reveals that as many as 40 million adults admit to suffering from some form of regular anxiety."

Read the whole thing at : http://www.guardian.co.uk/money/2010/feb/03/money-worries-britons-stress

How is your bankruptcy advertised?

The following is part of an email reply I gave to someone recently - I thought it deserved a wider audience:

There are, as I understand it, two ways that your bankruptcy is advertised - and neither way is likely ever to reach people you know.

1. They put it in a paper in London called The London Gazette - 'one of the official journals of record of the British government' according to Wikipedia. They also have a website ( http://www.london-gazette.co.uk/ ). Nobody, apart from lawyers and ambulance chasers reads this. I have been able to find myself listed there, and they put in your full name, occupation and address - but as far as I can see this sort of thing doesn't end up in Google and other search engines (but I might be wrong - certainly I've tried various searches to try to make this pop out of Google associated with my name and I've failed every time). Interestingly, you might get a few letters from companies that deal with debt management once your name is in this - ignore the letters, they are scum!
2. You name is also put on the Insolvency Register which is linked from the Insolvency Service's website (http://www.insolvency.gov.uk/bankruptcy/bankruptcysearch.htm ). Again, no one reads this sort of stuff apart from lawyers and ambulance chasers...

So basically, my message is - don't worry. Once you are bankrupt life bizarrely goes on and even gets back to a form of normality. It's what I call a 'new normality' - normal, but not quite the same as before! Apart from the people I have specifically told - nobody know that I'm currently bankrupt, and indeed they need never know.

134,142

These figures were released by the Insolvency Service this morning.

134,142 - That is the total number of individual insolvencies in England and Wales for 2009. Of this 74,670 were bankruptcies (me being one of them) - the numbers are up over 10% of the 2008 figure. Astoundingly this is approximately 1 in 320 of the adult population. Not only am I not alone, the chances are that if there isn't anyone else going through this in my street then they are pretty much only a street away.

Here is a graph, taken from the Insolvency Service statistics for 2009:

Check out http://www.insolvency.gov.uk/otherinformation/statistics/201002/index.htm for the full report.

Sobering, or what.

Mrs Average

Mrs Average wants us to separate. What a year this has been.

How are Insolvency Service letters like buses?

How are Insolvency Service letters like buses? When three come at once, of course.

So, some news at last, some of it good and some that needs to be challenged. First the good news - we get to keep the car and we don't have to 'buy' any interest in it, so that is a big relief. I never thought I'd be as relieved as this - I don't even like the damned noddy car - but at least it's ours and we don't have to go through the experience of having our car sold from under us. Chalk one up to our side for once!

Next up, on looking at the budget details that I gave them they want me to agree to an Income Payment Agreement of £300 per month for the next three years. Now, I was hoping to avoid an IPA, but I guess I did really expect one - after all I'm a bankrupt and the Insolvency Service has to do it's best to claw something back for my creditors (even if they are faceless banking corporations - the same bastards that screwed our country for years to come). The amount of £300 feels a bit steep - and frankly I don't know how I'll pay it at the moment - but the first step is to challenge some of the figures from the Insolvency Service; I have realised over the last couple of months that I missed a few things off that I'm able to claim for and so I'll have a go at reducing the IPA to something that feels a little more reasonable. Of course, I may not succeed - in which case I shut up and get on with paying, but I have to try.

Still no news on the house, but I guess I feel a little better that I'm close to an agreement on the IPA (even if it makes things tight for three years). I hope soon to be in the phase where I just get my head down, pay monthly what I need to pay, have no more scary paperwork to deal with - and get to the point where I'm no longer bankrupt. I realise that following that is still the huge stage of trying to recover my credit rating - but that is still a long way away, and one step at a time.

Two months

Two months down. Still no news on the house or the car.

Worse than bankers

I never thought it was possible, but there are some people in the world who are worse than bankers:

Thousands of households have taken out loans with interest rates averaging 825% during "the worst Christmas in a generation" for illegal doorstep lending, according to a new report.

Read the whole thing at : http://www.guardian.co.uk/money/2010/jan/15/loan-sharks-poorest-households (The Guardian, 15th. January, 2010)

Using plastic for rent

No real surprise to those of us who have suffered or are in the process of suffering money problems - it has just been reported that up to a million families have had to resort to paying for their mortgage or rent with credit cards over the last year. Well done Shelter for exposing this, the following is a quote from the Guardian:

About 1 million families have resorted to using credit cards to pay their mortgage or rent during the past year, the housing charity Shelter claimed today.

A survey by the organisation found around 6% of households had used their plastic during the past 12 months, in order to keep up with their housing costs.

People in working class professions were most likely to use debt to cover their mortgage or rent at 8%, but 4% of ABC1s also admitted they had used their credit card in this way.

Read the whole thing at : http://www.guardian.co.uk/money/2010/jan/11/credit-card-mortgage-rent (The Guardian, 11th. January, 2010)

Too broke for bankruptcy

My wife will be going bankrupt shortly too and the other day she called up the courts to book an appointment. To my surprise she could get in within 24 hours, and actually she had to decline the date as she hasn't filled in her Statement of Affairs yet. The lady at the court said that it was pretty quiet at the moment - this surprised me as I expected that many people would hold off going bankrupt until after the holidays. My wife, as ever, figured it out - nobody has the money to go bankrupt at the moment.

Unbelievable isn't it - right now people are too broke to go bankrupt. I guess the rush will be February.

Happy New Year

Christmas and the New Year are now behind us and, most importantly, the kids had a great time. Hopefully they didn't spot much of a difference from previous years. Last year one of my New Year's resolutions was to reduce my debt - and it just goes to show that the saying 'be careful what you wish for, you may get it' is so true! Yes, here I am with far less debt than last year, but I would have never expected the means by which I reduced that debt! This year therefore I decided that my only resolution should be to make sure that I enjoy myself more - life is too short, after all. Last Saturday myself and a few friends went walking in Northumberland, along part of Hadrian's Wall - and it was glorious. You have to remember what is real.

Happy New Year.

(Thanks to Uncle Tone for the photo - Average Joe tackles the drifts next to Hadrian's Wall)