22,000 debt iva, bankcrupty ? i dont know

[boome]

Hi Everyone,

 

I have accumalated over the year's a large debt of 21,643k now it's became almost impossible to pay because of late fee's and silly interest etc. I am unemployed and have been for a while due to my illness.

 

My debt's are Barclay's bank 896 (which is still rising cause of fee's as my reserve limit is only 500),

Egg credit card 1,996k,

M.B.N.A 4,300k

(these are chasing me the worst via global vantage)

Halifax credit card 4,333k (but i do have a clean bank account with them)

Santander Loan for 10,118k owed as a settlement figure.

Clean Natwest Account

 

Every debt is un-secured

 

I also do however have a clean Natwest bank account and untill recently have had a satisfactory credit report via experian. I have been in contact with debt free direct, but im not sure also have filled in a questionaire of all my incoming's and outgoing's for a company called Spencer Haye's it's confidential if this help's?

 

I know im unemployed but have still been advised that i can do an IVA as i am on incapacity, income support and d.l.a for issue's i will not go into. I recently moved from my mother's address where all the bad debt is now i am not saying i am going to run away from my debt because i feel a duty to pay it just want advice that's all.

 

I am not on the electoral role, i have pre-payment british gas. I recently opened a P.O.C.A (post office account) to recieve my benfit's as i don't want creditor's and bank's getting all my money. In my situation was this advisable though as i still had a clean Natwest account? Also i don't know whether the post office account went through as i have a red post office letter aand it say's from my benefit office Original Document Returned i aint got a clue what this mean's. However i will sort that Monday, should i open one or was that a bad mistake now i realise as tracing company's work alongside them?

 

I know this is a long post but i do want to pay this money but as you can understand i am stuck between the two, i don't want them at my new address and i don't want them hassling my mother's all the time. My outgoing's exceed my incoming's but i could afford to pay a set amount. Any reply's would be appreciated as this is effecting my illness

Edited March 21, 2010 by boome

[sillygirl1]

If you are on allowances I would think that bankruptcy would be a good idea, a DMP or IVA isnt always the best answer.

 

Have you gone to the CAB to see what they can do, their advisers are becoming more clued up on the options.

 

Would one of your creditors petition for bankruptcy as that would help solve a lot of isssues for you right now.

[boome]

I think bankruptcy would be a good option also so maybe have been miss advised, i have not been CAB but i will do this monday with all my detail's. I do not want my good's ceased though so would this happen with bankruptcy? I have been keeping pretty much up to date with paymet's untill february and now it's getting toward the end of march. M.B.N.A are on my back already and i stupidly spoke to them only saying i am doing an iva or bankruptcy, i now know not to speak to put everything in writing. Which creditor would be best approached for bankruptcy. If this is my best approach should i just go to the court and get this form to get thing's rolling? Thank you where would i stand with barclay's though as bank's are the worst for debt chasing shall i go see a manager?? Can my natwest account be touched for any money's owed as it is a clean account and is this a so called parachute account i don't know, upon reading with regard's to bankruptcy they will cease my good's and i don't wish this, i am still considering iva here i don't know.

Edited March 21, 2010 by boome

[sillygirl1]

Your goods won't necessarily be seized unless they are over a certain value, and most 'goods' are not of any use in a bankruptcy, unless you have a Rolex watch or two, expensive jewellery or high spec pcs and laptops they won't be of much interest.

[maroondevo52]

Thread moved.

[boome]

Thanks sillygirl1 for the reply but that is exactly what i have amounted debt on a tv, pc, so i do have other valuble item's, although not all purchased via a credit but certain things so now you see point i have valuable's which i do not want ceasing? And have done some stupid cash transactions etc and mainly consolodation of my debt?

 

I have recently moved address basically kicked outta me family home but if i am ever to repair the damage done also i need to sort this a.s.a.p as i say don't want the hassle of my mum being bombarded by letter's and baliff's.

 

If i do go to court and this is a serious question as i am serioulsy now considering bankruptcy will the court find my new address via my N.I number as i am on benefit's?? Will they also look at all my stupid spending on credit card's and want bank statement's?? The court??? As i have read on this forum that they dont look at that??? Im confused

Edited March 22, 2010 by boome

[palomino]

1. If you have a credit card account and a bank account at the same bank then the bank may take money from the bank account to apply to the credit card account. So, step 1 : open a new account with a bank/building society with which you have no previous connection and keep any significant amounts of money in that account.

 

2. The OR is normally non-judgmental about your debts - providing you are honest and up-front about them. You might have made purchases which you now regret, but that is not a crime. Stupid maybe but not criminal.

It's only if you try to hide things that the OR gets upset.

[boome]

Thankyou palomino,

 

As to question one i do have a halifax credit card and bank account so they will take moneys from that which i know. So i already have a natwest account but i have previous connections with them? So i need a new one what type and which would you suggest? I have recently applyed for a post office account however as i know i cant pay anyone from it.

 

For question two so it does not nescesarily mean they will cease good's if i am up front and honest with them and as my situation both illness wise and debt and i am being honest and up front then maybe the bankruptcy is the best solution for me?

 

I really need to know which bank account would be suited for me the best then and not connected to any of the creditors i mentioned. Do you know of any not checked by third party's, thanks

[warpath]

Boome - you really do not need to go bankrupt - I have sent you a private message. I declared bankruptcy last year and have subsequently discovered I needn't have. I know how stressful this is but don't let them scare you - you have more power than you realise and can come to several arrangements with crediors and it will not need to go to court. They CANNOT send anyone round to seize your goods or send anyone round to even talk to you without you agreeing to their visit. If they do its trespass and trust me they won't do it. If you pay them something even a token payment they will accept and they will freeze the interest. You are way off needing to declare bankruptcy. I am so angry at the bullying tactics employed by these companies and honestly want everyone to know whats going on and how you can fight back but most importantly realise that its actually you holding nearly all the cards (excuse the pun) and not them and you really have no need to feel stressed. I know its hard to believe now but i've been through it and trust me if I knew now what I'd known then I'd have taken them to the cleaners. Good luck

[loopinlouie]

Best to keep advice to the open forum untill you know who you are talking to.

 

No offence warpath but it could be seen as worrying to pm caggers after first post on such a nature. Probably nothing but wouldnt want to think a sales pitch was to ensue.

 

As I said probably not the case, but better safe than sorry xx

[warpath]

Thanks loopinlouie you are probably right - sorry if I've unnerved anyone! Certainly not selling anything just hate seeing people feel their only option is bankruptcy - was just explaining in the message that before yo even start to consider it as an option there are many, many things you can do and looking at Boome's first post it doesn't look like they have tried to come to an arrangement. Eg suspending interest and paying a token amount - which legally they have to accept. It doesn't even look like these debts are with DCAs yet? The people who call you do not care about you or your circumstances they care about hitting their team targets. The number of times I was broken to tears after calls from these bullies. Legally you have rights and can and should exhaust all other routes before you think of going bankrupt. I admit its a wonderful feeling being debt free but I can't get a mortgage without putting down at least a 50% deposit and had I owned a home or anything very much at all actually I would have lost it. Ultimately once you are back working or if you ever come in to any money to clear these debts you can offer extremely reduced settlement figures but until then you can carry on paying as little as you like a month.

Apologies for private message - am new to this

Good luck Boome

[warpath]

I had a Halifax bank account and a Halifax CC debt and they took money from my bank account to cover the CC arrears - was a huge amount of money to come out in one go - I got it back but it was a right old battle. Palomino is giving sound advice about opening another bank account - I'd recommend the co-op because when I went bankrupt they were the only bank who would let me have a bank account - so if you were to go down that route you'd be ahead of the game there.

In answer to your second question if you own goods that could pay your debts the likelihood is that they will take them. You can petition to keep stuff but ultimately if it will be a way of offering your creditors something they will take it. I had a car and because at the time I wasn't working they took that. I literally had nothing else to give - oh a premium bond went as well. If your illness meant you had to keep something eg - the car to get you to and from the doctors - they would take it into consideration but would likely say get the bus. Bankruptcy really is not the easy option which is why I say try and come to an arrangement with them first

[warpath]

Hi Boome - thought this may be useful to you...right, I'll stop going on now!

 

Your name

Address

Postcode

Date

Name of creditor

Department

Credit Company Name

Address

Postcode

Dear Sir/Madam

Re: Account No:

Further to our recent correspondence regarding my account balance I am writing to all of my creditors requesting the option of a new payment plan.

Due to currently being unemployed my income has become reduced as I am living on benefits until I can get back in to work. I have every intention of honouring this credit agreement and am hoping that an arrangement can be made until I can find work.

After assessing my finances I would be able to maintain monthly payments of (insert monetary amount). I am asking that you also consider freezing the interest on my account.

I think that six months would be a reasonable amount of time for my current financial situation to be rectified.

I enclose a copy of my income and expenditure for you to look at.

Please do not hesitate to contact me either by letter or telephone at your convenience. Thank you for your understanding and patience in this matter.

Yours faithfully

Your name

 

Sample Letter A

TO BE USED WHEN A CREDITOR REFUSES YOUR OFFER OF PAYMENT

 

Your Home Address

Date:

 

To:

Dear Sir/Madam

Re: Account/Reference Number:

Thank you for your letter/telephone call of………., concerning the above account.

I am sorry that you feel unable to accept the offer which I have made. The majority of my other creditors have accepted the offers made to them and I have commenced payments. I cannot offer you more because I can only afford £…………. per month between all my other creditors, and it would be wrong to cease or reduce payments to my other creditors in favour of your company. The offer made to you is on a pro rata basis, as used by the county court.

In the light of the other creditors agreeing to my repayment plan, please would you reconsider my offer. I will be making the payments in line with the offer to your company, on a monthly basis, as a gesture of goodwill.

(Optional - add details of your circumstances and financial situation)

I look forward to hearing from you as soon as possible.

Yours faithfully

(Your signature)

Sample Letter B

TO BE USED WHEN A CREDITOR REFUSES TO FREEZE INTEREST ON YOUR ACCOUNT

 

Your Home Address

Date:

 

To:

Dear Sir/Madam

Re: Account/Reference Number

Thank you for your letter/telephone call of _________ concerning the above account. I am sorry that you feel unable to suspend interest charges on the above account. The majority of my other creditors have agreed to the offer of payment and agreed to suspend any interest charges still accruing. They have accepted that to continue to charge interest would not assist me in my present financial difficulties, and can only serve to increase our total debt.

As you are aware, I have already paid considerable sums in interest to my account. If interest charges continue, the monthly installments I am paying will not even cover that interest. Also the co-operation of my other creditors who have agreed to freeze interest already would be put at risk.

(Optional - add details of your circumstances and financial situation)

I would therefore be grateful if you would reconsider your decision not to freeze the interest. This would mean that the monthly payments I make would actually reduce the balance outstanding to your company.

I look forward to hearing from you as soon as possible.

Yours faithfully

Your signature

 

I have no doubt they will accept your offer if they can see its backed up by your income and expenditure. Let us know how you get on

Edited March 25, 2010 by warpath

[warpath]

ooo apologies for the way that all came out - hope you can pick through it

[loopinlouie]

Thanks warpath for not being offended. Your advice can help others as well now xx

[boome]

Thanks warpath for your help with dealing with my creditors i am going to send those letters to all my creditor's, however i am on a long-term sickness benefit as my health is not good. So i don't think i could ever possibly repay all the outstanding debt with interest so i hope they would freeze it. However even if i make token payment's then it might keep them off my back for now but they will catch up with me in the end, so maybe bankruptcy is the only option. I will have too look into more and more information, thanks

[warpath]

If you never work again and can only pay a tiny amount I promise you they will let it roll on for as long as you need it to. I had the interest frozen and the payments reduced for 2 years. My husband has done the same with his debts over the past three years and a friend of mine has been doing it for 10 years! They give you a lot of grief but you need to remember that for them to take you to court they have to be confident they can get more out of you. If a judge determines you have made a fair offer of payment he will come down very hard on the creditor. They simply won't take you to court. Anyway, all the best with what you decide - its nice not owing anything but anything that involves a credit check - renting/changing car insurance/etc is all a big deal for me now. Make sure whoever you talk to is fully informed of all your options. I wish you luck

[boome]

thanks again warpath ok i will get these letters together and send them to all my creditor's just too quiz you on one last thing what would be the best payment method my natwest account as it is clean?? Or can they seize money's from there if they do not agree to my terms?? thanks:) Also what happens with regard's to c.c.j i have not yet received one nut i can imagaine that that is only on the horizon?? Do i ignore them and contiune to offer token payments or go court?? Do i also need to send these letters recorded or registered mail thanks.

Edited March 27, 2010 by boome

[stewpots]

Apologies I don’t know if I should start a new thread or just add to this one

 

I first came on here August 2008.

 

I had £85,000 of mainly credit card debts and one loan

 

I had lost my high paid job in the city of London and was out of work 10 months (problems in repaying my credit cards arose after 4 months) .

 

Now I had no equity in my home or a hidden Bentley etc so I was always of the view after taking advice on here there was not much they could do.

 

I kept in contact with all of my creditors and offered what I could , I also talked to the CCCS who sent me covering letters to send out.

 

Of course it’s not nice getting letters threatening bailiffs or constant calls (thankfully most creditors only had my mobile phone number) but I survived.

 

So even when MBNA are charging you £770 (APR30% +) of interest a month on a £27,000 balance etc when you’re on a Job Seeker Allowance is only £240 a month I coped . Northern Rock (loan) agreed £1 a month for a year after 1 letter and 1 call so very extreme variations by creditors.

 

Now we kept the house (6 months of mortgage arrears which equates to 3 full months, we paid half for 6 months).

 

The good news is I am back in work (4 months) now but its paying much much less then what I was on.

 

With a big mortgage and other bills I am till struggling (I have a partner but she doesn’t earn much)

 

Now my problem is should I continue with arranging a IVA, I am in correspondence with them it’s a long way from being set up (I know at present I can’t really afford even at 25p in the £1). I think they had a £20 a month contingency fund well I'm still getting well over drawn each month we had £165 plumber bill I had a £255 MOT car bill etc etc £20 a month is a joke for a contingent

 

Now I have agreed with all creditors bar 1 at present to suspend interest payments and pay token amounts

 

Even got the MBNA to agree for me to pay £1 a month on a credit card debt of £27,000.They were terrible so I pay the £1 a month by cheque.

 

I used phone, CCCS letters my letters and information that I was looking to go into an IVA told them the name of the IVA

 

Now the issue I have is I don’t think I can afford an IVA at present should I delay it and just keep paying tokens each month.(ranges from £1 to £20)

 

The mortgage company look like agreeing to put my arrears £3,500 on the balance of mortgage.

 

Any advice ?

 

Obviously I know my credit rating is destroyed and but not going into an IVA some creditors may start calling again but if you show what you can afford their isn’t much they can do ??.

 

I have thought bankruptcy but my partner is dead against that ( I think she still sees it as people throwing apples at you in the town square while your in the docs)

Edited March 31, 2010 by stewpots

[loobyloo85]

Hi Stewpots

 

If you cannot afford what your IVA company is proposing then the first thing to do is contact them to inform them of this. Nothing is set in stone until the approval of your IVA. Up until this point, you can amend any offers put forward and cancel at anytime (mostly without charges, depending on which company you are with).

If you contact them, and explain you do not feel able to afford the payment put forward, they will arrange a new payment with you that you feel more comfortable with. I know that a lot of creditors are now accepting as low as 10p in the £, and IVA companies are trying this offer.

If you find you are going overdrawn each month, you need to look into the reasons why. When you are setting up an IVA or a debt management plan, you will be advised to change accounts, or clear and cancel your current overdraft to start afresh. You need to go through an income and expenditure in detail to find out exactly how much you can afford to propose. If you do have less than needed for the IVA, then you could go into a debt management plan and pay, for example, £50 a month between all creditors until your surplus income increases for an IVA.

Regards to your credit rating, it is affected by the IVA, but it is only on your credit rating 6 years from the date when your IVA is approved, and then it is wiped clean again. The advantage with IVA over bankruptcy is that your assets are safe. x

[boome]

Firstly i have come to arrangement with all my credit card's i.e that i owed money too, Egg, Mbna and halifax they have frozen the interest for 6 months.

 

I am having major problems over my loan though basically to the point where they are tryin for a CCJ within 10 days for the 15,000 i owed santander.

 

They wont stop the action as say my interest doenst accrue or something my loan was only for 10,000 and now they want 15,000 the cheek.

 

Anyway i will just have to wait and see what happens unless anybody else has advice i have been CAB and am waiting for an appointment in October as to maybe put a pay plan together other than that i don't know.

[rapterman]

I have been down this road before, had about £30,000 in unsecure debts and I was in a DMP with the CCCS, who were very good at dealing with most of my creditors.

 

I was in the DMP for a total of two and a half years but after one year the Halifax started to demand more money and started to charge the interest and late payment fees again. After a few months all of the money paid into the DMP was basically eaten up by the interest and late fees from the Halifax.

 

My situation got a lot worse at the end of last year so I decided to file for bankruptcy in April of this year. Personally for me this was the best thing I have done and I should have done it a long time ago!

 

Most of the letters demanding money have stopped, I still get the odd one now and again but I haven’t had one in a long while.

Nobody has come to my house looking to take anything and the OR has been very good, even let me keep my car as I need it to get to work.

 

The hardest part about filing for bankruptcy is sorting out the paper work and finding the money to pay of it. Going to court is the easiest part! Telling your creditors on the phone that you are bankrupt when they are asking for more money is the best part!