Bankruptcy or Debt Relief Order?

[Arjessa]

We just came out of running a failing Public House that the landlord accepted our surrender of the lease. It was a privately leased pub, not ties to any breweries, but now we are left with lots of bills, some I am managing to pay off a small sum weekly, but some are too big (including the VAT and PAYE to HMRC) and a ridiculously high bill for ending the 'toilet cleaning contract' early - some 2,500!! QUESTION; am I better to go for a DRO or for Bankruptcy? We have debts totally about 10,000 and our only asset is the car, a family car used mostly to take our autistic son to High School and my 89 year old mother shopping. We have very little in the bank, and trying to save for legal costs of a bankruptcy order, but should I use it to pay the VAT Man first, but then it will take me longer to re-save again and the creditors are at the door and we are only on benefits now and a small partial pension of some 58 per week??? Can anyone help with some advice on this dilemma? :| I am thinking a DRO may be better and not so drastic! THANKS!!

 

[tony84]

You need specialist advice.

But, from the perspective of getting a Mortgage in the future (if that is a plan), if you arrange payment plans with your creditors, that is seen far better than having a debt managmenet company do it.

From your perspective now, i imagine whatever it takes to stop people knocking at the door is your priority, unfortunately i cant help with that but hopefully there will be someone who can.

 

[Talay]

Get advice but keep your cash and don't go wasting it paying down bills you can never hope to clear. Don't put it in or keep it in banks. Under the mattress or squirrelled away in grandma's post office is where to keep it.

I'd head over to http://forums.all-about-debt.co.uk/ and http://forums.moneysavingexpert.com/forumdisplay.php?f=136

 

[Alan R Price]

I don't usually recommend them however I think as a short-term fix while you get yourself back on your feet, you could look at a debt-management plan (DMP). You pay an affordable amount each month and the debt management company will negotiate with your creditors on your behalf. DMPs are only really effective over the short-term because they don't usually pay down the debt, rather put it on the back burner until the debtor's finances improve.