70k Nightmare - BR or not?

[Burgerking]

Hi,

 

I am is a situation where I owe 70k to unsecured creditors, and have a property with roughly 18k equity. I have been unable to meet the minimum payments on my credit card and loan accounts, and have made no payments on these since October, as I have been clearing mortgage and secured loan arrears, and this is now complete.

 

I earn £2,100 per month, and after priority payments (mortgage, secured loan, lease etc.) I have £457 available to pay 9 creditors. I have sent a copy of my financial statement, along with a letter explaining that I am offering what I can afford, but there has been no response to this.

 

I have worked it out to be 0.65% of each outstanding balance, until I could sell my home and move into rented accommodation. This would then allow me to increase the payments being made, and should also release a lump sum that could be used to reduce the debt.

 

I have received three default notice letters, which I accept, as I cannot pay the outstanding arrears on any of the accounts. My question is that bearing in mind that I already have three default notices that are about to be registered against me, would it be better to file for bankruptcy, and accept the consequences of doing so?

 

My only concern with the above is that I have a corporate AMEX card, which is to be used for company related travel, and I am due to go to the USA early next year for a training course. If I am made bankrupt (or have the defaults recorded), can the corporate card still be used, or will this be seen as obtaining credit? I have never used the AMEX card since I got it.

 

I am aware that the creditors may go for charging orders as there is equity in the property, but I thought that this could not be done without sending me an official court document which I have a specific period of time to respond to. If this is the case, should I just wait for the first official court letter to arrive and then file for bankruptcy, or is it better to do this now?

 

Also, could a CCJ / Charging Order / Baillifs threat for a single creditor be seen as giving preferential treatment to them?

 

I don't think that there is a realistic chance of the creditors accepting my monthly payment offer, even though it is all that I can afford.

 

Thanks,

 

Burgerking

[sequenci]

Hi,

I earn £2,100 per month, and after priority payments (mortgage, secured loan, lease etc.) I have £457 available to pay 9 creditors. I have sent a copy of my financial statement, along with a letter explaining that I am offering what I can afford, but there has been no response to this.

 

stick to your guns, it sometimes takes a few attempts in writing to them to get a response, send your letters recorded if you can

 

I have worked it out to be 0.65% of each outstanding balance, until I could sell my home and move into rented accommodation. This would then allow me to increase the payments being made, and should also release a lump sum that could be used to reduce the debt.

 

it's up to you. as you have a positive surplus you do not *have* to sell if you don't want to. if you do sell you could offer a full & final settlement via the lump sum you raise.

 

I have received three default notice letters, which I accept, as I cannot pay the outstanding arrears on any of the accounts. My question is that bearing in mind that I already have three default notices that are about to be registered against me, would it be better to file for bankruptcy, and accept the consequences of doing so?

 

well if you do go bankrupt are you aware of the consequences? it is likely you will lose your house and possibly other assetts too, have you looked at the alternatives such as IVAs or Debt Management Plans?

 

My only concern with the above is that I have a corporate AMEX card, which is to be used for company related travel, and I am due to go to the USA early next year for a training course. If I am made bankrupt (or have the defaults recorded), can the corporate card still be used, or will this be seen as obtaining credit? I have never used the AMEX card since I got it.

 

I would imagine that Amex would close the account pretty sharpish.

 

I am aware that the creditors may go for charging orders as there is equity in the property, but I thought that this could not be done without sending me an official court document which I have a specific period of time to respond to. If this is the case, should I just wait for the first official court letter to arrive and then file for bankruptcy, or is it better to do this now?

Also, could a CCJ / Charging Order / Baillifs threat for a single creditor be seen as giving preferential treatment to them?

 

they would need to take you to court first. have you considered sending your creditors a CCA request?

 

I don't think that there is a realistic chance of the creditors accepting my monthly payment offer, even though it is all that I can afford.

 

I do... I help arrange hundreds of these every month for my clients in my day job.

 

Thanks,

[mancini602]

As far as I am aware, if you go bankrupt, any recent payments to your 'secured' loan can be overturned by the OR due to preferential treatment given that you've not been paying anyone else.

 

As for the corporate Amex card...that depends on the original agreement. For example, we had them where I used to work and I should've and needed to have one, but, because the agreement was 'joint liability' with my employer, I too needed to be credit checked...and failed. If however your employer has sole liability, then your BR or potential BR has no bearing on the corporate card you hold.

[sequenci]

As far as I am aware, if you go bankrupt, any recent payments to your 'secured' loan can be overturned by the OR due to preferential treatment given that you've not been paying anyone else.

 

this is a priority debt and by virtue, should be treated as a preferential creditor.

[Burgerking]

Thanks for the responses.

 

I had tried to enter an IVA, but M*NA and N.R are amongst my biggest creditors, and many organisations have advised BR rather that put forward the application. Also, the IVA would cost me another 8k, which I can't afford.

 

I have not sent CCA requests as yet, as I was trying to see if any agreement could be reached first. If not, then I will request CCA's and also letters to reclaim bank and credit card charges * 9, as this should reduce the total owed by something.

 

Regarding the AMEX card, I will need to return it if any bankruptcy petition is made - perhaps I would not be able to use it anyway once defaults exist on my credit file?

 

I had hoped (and tried) to consolidate, but as this has failed, poor credit will not bother me again, so I am not too worried about the presence of negative entries in my credit file.

 

Not sure how to proceed with my employer on this though, as I need to be able to make the trip to the USA. I am desperate for this not to get out at work, even though I don't think that my job is under threat.

 

Burgerking

[sequenci]

If you go for the informal route of debt management, either by yourself or via a Debt Management firm (CCCS or Payplan) then there is no reason for your employer to ever find out.

[Burgerking]

Hi,

 

Having sent my FS and payment offer to creditors, I have received a Default Notice, and a demand for 9k in the next 48 hours from a collection agency employed by E**. I don't have this, so I expect that the next step will be a CCJ.

 

I will not be telephoning C*ed*t S*l**ions, and will not discuss any aspect of the debt apart from in writing, so if they turn up at my doorstep they will have to leave empty handed.

 

As far as Baillifs go, can they force entry into my home if a CCJ is granted and not paid?

 

As I have 9 creditors, I plan to dispute the CCJ on the basis that granting a CCJ to one creditor is the same as me giving them preferential treatment, which I thought was against the law? How long does it take for a creditor to get a CCJ?

 

I will provide any court with my FS and copies of any letters showing my offer of payment, and also inform the court of the total outstanding debt owed. If they think that my offer is acceptable, I can pay more, or should be made bankrupt, then this is up to them.

 

In the meantime, if court action is being taken, should I start payments as stated in my letter, or not bother with this? I have just got up to date with mortgage and secured loan arrears, and do not know if I should continue with these payments or start saving for a rental deposit early.

 

Any thoughts on this will be much appreciated.

 

Thanks.

[Tau]

Just out of interest, if you sold the house/flat. Would this leave anything left over at all, after you have paid the mortgage and secured loan off?

 

I would at this moment in time send Egg/DCA a CCA request letter along with a £1.00 postal order. This will buy you some time so that you can decide what you need to do and what avenue to take. This will also place the account in dispute and they should put it on hold for a while.

[Tau]

When you say that you have £457 to pay your creditors, do you still have to take out your normal day to day living expenses from this amount.

[PriorityOne]

Hi,

 

Having sent my FS and payment offer to creditors, I have received a Default Notice, and a demand for 9k in the next 48 hours from a collection agency employed by E**. I don't have this, so I expect that the next step will be a CCJ.

 

Not if you get a CCA request off first !! This needs to go to whoever is chasing you for payment (by rec. delivery) as soon as possible. If they can't produce it within a certain timeframe, the account becomes legally uneforceable, which means they will no longer be able to pursue you for payment. If you do nothing, they may try to go for a CCJ straight away... depending on how aggressive a company they are. Do not talk to them on the 'phone, by the way...

 

I will not be telephoning C*ed*t S*l**ions, and will not discuss any aspect of the debt apart from in writing, so if they turn up at my doorstep they will have to leave empty handed.

 

It's ok to name them on here... Credit Solutions... there you go. It's highly unlikely that they'll turn up on your doorstep, but if they do... tell them to bog off or you'll call the police and have them removed. Debt Collectors are not bailiffs....

 

As far as Baillifs go, can they force entry into my home if a CCJ is granted and not paid?

 

You have a long way to go before reaching this scenario, so don't worry yourself with it. They need to comply with a CCA request first, or they're stuffed... which is why you need to get them off now (rec. delivery).

 

As I have 9 creditors, I plan to dispute the CCJ on the basis that granting a CCJ to one creditor is the same as me giving them preferential treatment, which I thought was against the law? How long does it take for a creditor to get a CCJ?

 

Stop. You haven't got a CCJ...

 

I will provide any court with my FS and copies of any letters showing my offer of payment, and also inform the court of the total outstanding debt owed. If they think that my offer is acceptable, I can pay more, or should be made bankrupt, then this is up to them.

 

In the meantime, if court action is being taken, should I start payments as stated in my letter, or not bother with this? I have just got up to date with mortgage and secured loan arrears, and do not know if I should continue with these payments or start saving for a rental deposit early.

 

If the only reason for you selling up is to pay unsecured debt...then don't. Your mortgage and secured debt are the priority debts, so please continue with these payments !! Don't worry about the rest.... we will help you to deal with these.

 

Any thoughts on this will be much appreciated.

 

Thanks.

 

[davefirewalker]

In a position like this, I would do as P1 says.....concentrate on the mortgage, and then cca and sar the rest

 

any agreements that dont meet muster can go.....

 

any penalty charges to accounts can be queried and any defaults questioned as being inaccurate.....

 

dont panic and dont talk to them...keep it all in writing

 

Dave

[Goldlady]

Hi Burgerking, I was in a very similar situation to you about 18 months ago and seriously contemplating BR - even got as far as filling in the forms.

 

I owed about £70K to credit cards and had many other debts as well due to business problems. After a lot of battles and due to the ability of my OH to deal with people on the phone we got the monthly payments on the cards down from £2500 to £250 a month. After things got worse I sent a letter with the backing of the CAB offering them all £1 (about 10 card companies in total). Those who accepted are still getting their £1, the ones who did not were sent a CCA request and have mostly disappeared into never never land. OK I have boatloads of default notices, but we are still living in our own house.

 

Bankruptcy is nowhere near as bad as it used to be. We are still thinking of selling our house and renting, but in our time and under our terms. I got a terrific amount of support from CAG - and still do - so please don't do anything rash.

 

Actually, filling in the bankruptcy forms (which you can download online) is not a bad thing to do - I actually sent a copy to each of my creditors to show I was not taking the pee.

 

Best of luck - you will get loads of support on here whatever you decide to do.

[Burgerking]

Thanks for the advice. I have sent the CCA letter, and will think about filling in the BR forms online later this week. I will keep you informed of how this goes.

[PriorityOne]

You are looking at BR way to early, Burgerking. Give yourself a chance before taking this route. Long before the days of CAG, I was pursued for an ex-repossession debt of over £52k, fought it without ever going to court and eventually settled for peanuts.

 

My advice to you would to take things one step at a time... See how they respond to your CCA requests and take things from there.