Margaret and her partner consider whether bankruptcy is best option

Margaret and her partner recently moved to be nearer Margaret's mother, who is ill. The move involved considerable expenses, and to make matters worse Margaret was recently injured in a road traffic accident and is no longer able to work.

Margaret's partner contributes to household expenses but, as he is currently paying off debts of his own, he cannot increase the amount in the foreseeable future. When Margaret approached the Consumer Credit Counselling Service, she had a monthly net income of £800 with debts of £60,000.

Margaret was distressed when she discovered how much she owed and has been upset by letters and calls from creditors. 

At first she found the idea of bankruptcy intimidating, so the counsellor suggested that she should go on a low Debt Management Plan with CCCS and pay her creditors £5 each a month. 

This way she will gain some peace of mind while she considers bankruptcy - which is her best option for a number of reasons: Margaret is elderly and disabled and very unlikely to increase her income; she has very high levels of debt relative to her income; her circumstances have changed dramatically since she borrowed the money; she lives in rented accommodation and has no other assets.

Before someone considers declaring themselves bankrupt, he or she needs to consider all of the alternative options - such as an Individual Voluntary Arrangement, where a percentage of a debt is paid off over a number of years under the guidance of an insolvency practitioner.

Supplied by the Consumer Credit Counselling Service
www.cccs.co.uk