My parents have recently dropped the bombshell that they are in massive debts to the tune of about £35k, and that's just an estimate. We have known for some time that they are struggling, but never expected this. It basically began quite some years ago after they bought a house and took out a loan for replacement windows. Not long afterwards, the property market crashed, interest rates rocketed and they were ill advised to remortgage.

That was the start of their massive problems and they are still faced with that same debt today, which has spiralled out of control through poor advice, circumstances beyond their control, greedy institutions and self confessed faults. After selling the house for a massive loss, those initial debts escalated to where they are today. They are obviously not homeowners!

After many years of struggle they are now faced with 2 possible solutions, bankruptcy or a 5 year IVA as suggested by several institutions, including the CAB. I have researched through many internet sites and pages of information and have almost decided that their best option is bankruptcy. I know that nobody here can tell me to go one way or another, so i seek help and information on the following points.

1) My sister has recently moved back into my parents home after a messy divorce. My father assumes that if he chooses bankruptcy, it will affect her financially i.e. they will expect her to contribute out of her wages. She has no savings and in fact has a small debt herself of £6k, afaik. She is a secretary on a modest wage (£6.60 p/h afaik). My question is: Would the bankruptcy affect my sister?

2) My father is already 65 and is not in the best of health. He has suffered angina, has bad feet and knees, although he is still in full time employment. I suspect he could probably work for a further 2 years provided his health holds out, but i would be surprised if he lasted any longer than that.

Therefore:

i) If he chose bankruptcy, would he be able to continue in employment and what effect would this have on his wages?

ii) If he chooses the IVA, can they legally enforce this knowing he was already at retirement age? I find it incredible that even the CAB has suggested a 5 year term IVA, considering his age!

iii) If, or rather, when he can no longer continue working, the IVA will become void and they will make my father bankrupt themselves. Is this any different than as if he bankrupt himself, for better or worse?

3) Finally, i have read that items of saleable value can be removed, wages can be taken and basically they will be left with just what is required to live on. There doesn't appear to be any guidence on what is considered "enough to live on". Does anybody know to what extreme this would affect them should they choose bankruptcy?

I know it is a little long winded with repeated concerns, but we are all worried about making the right choice. I believe that the IVA is a no go for many reasons, the primary one being his age. The IVA isn't ethical, suitable or beneficial to anyone but the company who would set this up. I would even wonder how legal this would be at his age, forcing him to work for a further 5 years or until his health fails him to the extent he can't enjoy whatever time is left of his retirement. Correct me if i am wrong, but this stinks of deceit and has caused a massive argument within the family. They have been ill advised for the last 15 years and it is obviously continuing with this IVA imho. My father has been convinced that the IVA is the better option based on these idiots advice

As i have metioned, i believe the bankruptcy to be the right solution. My concerns though are with my sister, my fathers age and what affect it would have on their way of life i.e. if they would still be struggling to have enough money left to prevent them actually enjoy their remaining time on earth.

Answers on a postcard please! But make it PDQ before he makes another seriously wrong choice.

P.S. If my parents die before settling their debts, would this debt be passed down to their offspring? I have searched for an answer to this but with conflicting answers.

Kind regards to you all for listening,

Colin.

My parents have recently dropped the bombshell that they are in massive debts to the tune of about £35k, and that's just an estimate. We have known for some time that they are struggling, but never expected this. It basically began quite some years ago after they bought a house and took out a loan for replacement windows. Not long afterwards, the property market crashed, interest rates rocketed and they were ill advised to remortgage.

 

That was the start of their massive problems and they are still faced with that same debt today, which has spiralled out of control through poor advice, circumstances beyond their control, greedy institutions and self confessed faults. After selling the house for a massive loss, those initial debts escalated to where they are today. They are obviously not homeowners!

 

After many years of struggle they are now faced with 2 possible solutions, bankruptcy or a 5 year IVA as suggested by several institutions, including the CAB. I have researched through many internet sites and pages of information and have almost decided that their best option is bankruptcy. I know that nobody here can tell me to go one way or another, so i seek help and information on the following points.

 

1) My sister has recently moved back into my parents home after a messy divorce. My father assumes that if he chooses bankruptcy, it will affect her financially i.e. they will expect her to contribute out of her wages. She has no savings and in fact has a small debt herself of £6k, afaik. She is a secretary on a modest wage (£6.60 p/h afaik). My question is: Would the bankruptcy affect my sister?

 

2) My father is already 65 and is not in the best of health. He has suffered angina, has bad feet and knees, although he is still in full time employment. I suspect he could probably work for a further 2 years provided his health holds out, but i would be surprised if he lasted any longer than that.

 

Therefore:

i) If he chose bankruptcy, would he be able to continue in employment and what effect would this have on his wages?

ii) If he chooses the IVA, can they legally enforce this knowing he was already at retirement age? I find it incredible that even the CAB has suggested a 5 year term IVA, considering his age!

iii) If, or rather, when he can no longer continue working, the IVA will become void and they will make my father bankrupt themselves. Is this any different than as if he bankrupt himself, for better or worse?

 

3) Finally, i have read that items of saleable value can be removed, wages can be taken and basically they will be left with just what is required to live on. There doesn't appear to be any guidence on what is considered "enough to live on". Does anybody know to what extreme this would affect them should they choose bankruptcy?

 

I know it is a little long winded with repeated concerns, but we are all worried about making the right choice. I believe that the IVA is a no go for many reasons, the primary one being his age. The IVA isn't ethical, suitable or beneficial to anyone but the company who would set this up. I would even wonder how legal this would be at his age, forcing him to work for a further 5 years or until his health fails him to the extent he can't enjoy whatever time is left of his retirement. Correct me if i am wrong, but this stinks of deceit and has caused a massive argument within the family. They have been ill advised for the last 15 years and it is obviously continuing with this IVA imho. My father has been convinced that the IVA is the better option based on these idiots advice

 

As i have metioned, i believe the bankruptcy to be the right solution. My concerns though are with my sister, my fathers age and what affect it would have on their way of life i.e. if they would still be struggling to have enough money left to prevent them actually enjoy their remaining time on earth.

 

Answers on a postcard please! But make it PDQ before he makes another seriously wrong choice.

 

P.S. If my parents die before settling their debts, would this debt be passed down to their offspring? I have searched for an answer to this but with conflicting answers.

 

Kind regards to you all for listening,

Colin.

Ok - answer as best I can but a lot of info you piut there.

1) Your sister - your fathers BR would not in any way involve her - she is a temporary guest and therefore her income cannot be taken into account.

2) Should your parents die - then the debts will come out of the estate if there is any - they do not get passed down.

3) There are no ethics in debt - if your father has the income to pay the IVA then it wil lbe accepted it is an agreement for 5 years - and if it fails then usually BR fails

4) Generally the officail receiver will work out a budget and take around 30% of the surplus income - however given your fathers age and health this is unlikely - any assets (and not furniture, personal items etc) will be sold to pay creditors.

Questions

Is the debt in the joint name of your mother and father ?

Have you contacted CCCS or payplan?

How many creditors do your parents have and who are they?

Ok - answer as best I can but a lot of info you piut there.

1) Your sister - your fathers BR would not in any way involve her - she is a temporary guest and therefore her income cannot be taken into account.

2) Should your parents die - then the debts will come out of the estate if there is any - they do not get passed down.

3) There are no ethics in debt - if your father has the income to pay the IVA then it wil lbe accepted it is an agreement for 5 years - and if it fails then usually BR fails

4) Generally the officail receiver will work out a budget and take around 30% of the surplus income - however given your fathers age and health this is unlikely - any assets (and not furniture, personal items etc) will be sold to pay creditors.

 

Questions

 

Is the debt in the joint name of your mother and father ?

Have you contacted CCCS or payplan?

How many creditors do your parents have and who are they?

Sorry for the delay but i am travelling back and forwards at the moment. Anyway to answer some of your own questions:

1) Yes, it is in joint names so we are already assuming that they will both have to apply for bankruptcy?

2) I will confirm this hopefully tomorrow, but i believe that they have tried the payplan. Whether that means they have had a payplan in force and failed or whether they tried to get a payplan and it was denied i am not too sure. As mentioned, this has been dropped on us (the offspring!) rather suddenly.

3) Again i will check the exact number, but afaik it is 6 and includes their bank (Lloyds TSB), a loan company, debt recovery company and 2 credit cards. This is what i am led to believe anyhow, although i think that they are still keeping some detail to themselves due to certain circumstances i can't mention at this time.

Thank you for your responses to my post gizmo111, it has been a massive help already!

Kind regards,

Colin.

Colin, a couple of really good factsheets for you

National Debtline England & Wales | Debt Advice | Factsheet 01 Bankruptcy

National Debtline England & Wales | Debt Advice | Factsheet 26 Individual Voluntary Arrangements

also The Insolvency Service Website is worth spending an hour reading.

give one of the debt advice charities a call too.

cccs or national debtline.

Personally I would avoid either IVA or bankruptcy here. Just sit tight, don't pay if you can't pay and wait and see if they are taken to court (This can usually be avoided by using numerous tactics discussed on this forum). It's quite likely as they are not home owners the debts will be sold on or even written off. If it ever does end up in court they might get CCJ'd which would be a lot less stressful than bankruptcy and at their age and financial circumstances they would only have to pay something like a fiver a month. I have owed more than that for the last three years and have debts with all the usual DCA suspects. None have even sued, probably because they know I'm skint and I'm not a home owner. My 2 cents worth would be save yourself a £750 bankruptcy fee and obviously avoid an IVA like the pox.

Thank you for these replies, it is nice to know people still look out for one another!

As it happens, i had completely forgotten about this post, mainly because my father went ahead and arranged a credit plan without anyone's help. He is a stubborn ass, but to be fair, the plan is not a bad one as it goes. My parents are now both a lot happier with a huge weight off their shoulders as they are a little old fashioned in their ways. Their pride wouldn't allow them to either go bankrupt or risk the creditors taking them to court with the risk of the CCJ's!

So i guess it's a close on this thread, but i thank you all personally for your help and assistance.

Personally I would avoid either IVA or bankruptcy here. Just sit tight, don't pay if you can't pay and wait and see if they are taken to court (This can usually be avoided by using numerous tactics discussed on this forum). It's quite likely as they are not home owners the debts will be sold on or even written off. If it ever does end up in court they might get CCJ'd which would be a lot less stressful than bankruptcy and at their age and financial circumstances they would only have to pay something like a fiver a month. I have owed more than that for the last three years and have debts with all the usual DCA suspects. None have even sued, probably because they know I'm skint and I'm not a home owner. My 2 cents worth would be save yourself a £750 bankruptcy fee and obviously avoid an IVA like the pox.

the fee is £475

in my experience creditors are getting more and more pressurising to reclaim money which is rightfully theirs (especially as more and more people are getting savvy with regards to cca requests and the limitations defenses etc).

another idea is for them to consider a free debt management plan with either payplan or cccs.

the fee is £475

 

in my experience creditors are getting more and more pressurising to reclaim money which is rightfully theirs (especially as more and more people are getting savvy with regards to cca requests and the limitations defenses etc).

 

another idea is for them to consider a free debt management plan with either payplan or cccs.

I looked up the CCCS as suggested by sequenci and gizmo111. I sent my dad off to the CCCS website at CCCS - where there was a wealth of really helpful information and all of it free.

Dad called them up and they sent a very helpful chappie down to their house. Dad says they were brilliant and that they went through absolutely everything. The adviser took one look at the IVA they had set up with some cowboy outfit and he immediately tore it up! Eventually, they formatted a plan, the exact details of which i don't know at this stage. As it is a genuine charity organisation though, i am satisfied that they have probably reached the best result possible under their circumstances.

So to anyone in a similar situation, i can really recommend the CCCS!

CCCS are excellent - I have only met one person who didn't think so and I'm not sure what they expected them to do for him; I think he wanted them to stick his debt under a hat and then show him that it was empty and pull a rabbit out instead!

Re DCAs; I've only ever dealt with one regarding my own affairs, so I'm not sure if it's representative. However I've noticed that it doesn't matter what you send them as long as you send them something - becuase whatever you send it ties their process in knots because they don't expect you to reply and the majority of their standard letters reflect this, and they also always never provide any information that would take effort to find out, send another standard letter, and ignore the contents anyway.

I have however noticed that some agencies have loaded standard replies to some of the types of letter this site has onto their systems. Specifically - I've seen companies that send out what is a reply to letters available here to contact that was totally unrelated.

It does show what poor returns DCAs must be getting when they aren't willing to invest time in a case.