Make them an offer... or go Bankrupt?

[Vonsworld]

Hello,

 

I've been unable to work for some time due to health problems and over time my debts went up to £70k, mostly on credit cards.

 

I CCA'd all the banks, and one of them defaulted on my request. Then after several letters they admitted that they couldn't find my original agreement, and so the debt was unenforceable. As a result they have written off £20k. Now what should I do next...

 

Option 1

 

I do have the option of going Bankrupt, since I have few assets and own no property. Also since I'm currently unable to work, the Receiver could not setup an IPA. Unfortunately, in the case of Bankruptcy, my remaining creditors would probably receive nothing.

 

Option 2

 

However I am considering making my creditors an offer to repay 25% of the outstanding £50k over 10 years. In my offer I would stipulate that no further charges or interest should be added to the debts, and that the repayments are fixed ie. they cannot be reviewed or varied at a future date.

 

Please advise, is there anything else I should include in the offer letter?

 

The creditors might well accept this offer, since I can point out the alternative of Bankruptcy, which would result in little or no repayments at all.

 

Please could you give me some advice... should I just go Bankrupt, or use my strong bargaining position to setup a low repayment deal?

 

With my repayment offer of 25% I would end up repaying £12500 over 10 years with no further interest or charges applied. That from an original debt of £70k. Wouldn't this mean that I've done rather well... or should I just go Bankrupt?

 

Thanks in advance

 

John

[Curlyben]

Sorry to hear about this, but in this case I would advise the big B.

Do you really want these debts hanging over you for the next 10 years, at least with a bankruptcy everything will be cleared up rapidly once and for all.

[sequenci]

I totally agree with Ben. Bankruptcy seems to be the best option due to the circumstances

[Thepower]

yep, Bankruptcy look like your best option, with no property it should be very stright forward.

 

It will be All over quicker then you think and rember Bankruptcy is there fot YOUR protection and none of these sharks can phone or write to you agian! Just make sure you include every debt

 

 

I'm i right in think after 6 years it's whiped off your credit file too.

[gizmo111]

If you're unable to work then you are going ot be struggling ot pay the 12.5K. It is unlikely they will freeze interest and charges for 10 years, and you will jsut spend a lot of this time fighting them for charges back etc.

Any DMP that takes longer than 5ish years is not worth entering.

I agree with the rest go BR sooner rather than later.

[Thepower]

My dmp is for a further 8 years i've been in it 3 years, all my creditors have frozen intrest and removed chargers.

 

In my position i have considerable assests and a regular high income, it seems to be working for me.

 

I tryed an IVA they all said no way, and as for the big B my assest are a lot more then the outstand debts.

 

I have defults but have avoided court, so i really feel it's working every month a see the total going down.

 

But if anyones got any better advice i'm all ears...

 

PS

 

Sorry about the hijack

[Belaflat]

I dont wish to dishearten you Thepower, but there are many instances of people on here in a regularly maintained DMP who have had their accounts turned over to DCAs by the OC as the returns were not quick enough for them.

I hope it works out for you in the long term.

[gizmo111]

My dmp is for a further 8 years i've been in it 3 years, all my creditors have frozen intrest and removed chargers.

 

In my position i have considerable assests and a regular high income, it seem to me working for me.

 

It is not unheard of, but where people are struggling to pay a very small % of their debt for a long time and they have no assets then BR is the most sensible option.

Whilst yours is working OK, quite often creditors, get fed up and pass the debts on to DCA's.

I am pleased it is working for you and if more creditors acted this way, then more people would be able to make realistic plans to clear their debts.

[Thepower]

Only Northern rock from time to time aask for more, i say no and they go away

 

most of the debts are with the orginal creditor, i think this helps the

 

The DCAs i've delt with have been total sharks

 

I'd love an alternative... really don't want this around my neck for the next 8 years.

[gizmo111]

I'd love an alternative... really don't want this around my neck for the next 8 years.

 

What sort of % return will they get over 11 years?

Can you start a new thread on this and I'll move the relevant posts to it so we don't carry on hi jacking this thread. PM me the link

[tomterm8]

If you do want to discuss this with people who have already gone bankrupt, moneysavingexpert.com has a bankruptcy forum that might be of interest - http://forums.moneysavingexpert.com/forumdisplay.html?f=136.

 

I agree with the viewpoints expressed so far. this kind of agreement isn't going to be legally binding, and it would probably be better to go for bankruptcy.

 

You DO need to seek professional advice on this, for example from CAB or the National debt Line.