creditor threat to use insolvency act

[shabz25]

Hi,

I have received a letter today for my creditor stating that if i did not pay the £861 they will use the insolvency act to recover the money. The debt is for electrical equipment paid for in installments. can you advise me if the credit act applies to this debt, should i have received a default notice etc. Can they use the insolvency act for this amount?

[shabz25]

Hi, can anyone advise me please, i have 3 days to act, the debt is about 2 years old.

[42man]

You mention electrical equipment paid in installments...is there any kind of written agreement ? Also they can only use the insolvency act if the amount you owe is OVER £750, it might be a wise move to get the figure under the £750 mark...

[martin g]

Hello,

They can issue a statutary demand if the sum owned is more than £750. If you have not paid the sum, or apllied to have the demand set aside, within 21 days they could oetition for your bankrupcy.

If you can pay them the difference of £111 they cannnot issue a statutary demand in which case they cannot petition for your bankrupcy.

Bear in mind that it will cost them £1,000- £1,500 if they do try to bankrupt you and they will be at the end of the line when any assets are divided. HMRC come first, then any secured creditors such as a mortgage and possibly a secured bank overdraft. They could spend a lot to get 1p in the £.

I would try to pay the £111 if you can and then negotiate a payment plan for the balance.

[shabz25]

There was no agreement, just to pay an interest free installment for 5 months. I offered to return the goos when i could not pay for them but the retailer refused. What if i bring the debt below £750 and they add interest to bring it back uip again. I cannot afford to pay a monthly installment plan because i haven't enough left to pay my creditors at the end of each month. My debts are over £140k so am having to prioritize at the moment. i will have to check but the original debt was about £600 so £200+ is made up of charges, i will have to check to make sure on this.

I could gather the £110 as a last resort to prevent them issuing a SD. What if i offer to pay the £110 but they refuse to accept it, where do i stand if this happens, do i just pay it to them anyway?

[martin g]

Good morning,

If the debt was £600 and the balance is made up of interest and penalty charges which have been applied unlawfully ( you say there is no contract) then your reason to set the SD aside would be that the debt was below the £750 threshold.

 

If you owe £140,000 and cannot meet your monthly obligations I would be inclined to write to the creditor outlining your financial position and offering a full and final settlement figure that you can afford.

 

I don't know your full financial position, you may be asset rich but cash poor, however, as I have stated above it will cost the creditor well into 4 figures to petition for your bankrupcy and by the look of it they will not see a great return on their outlay.

 

Only you know your true position and CAG generally suggests you avoid bankrupcy however with your kind of debt I am sure that you must be under great pressure. I would suggest that it is something you should look at look at for your own wellbeing.

 

Martin g

[shabz25]

Thanks for the reply, i want to avoid bankrupcy and save myself the sense of failure. I have no assets what so ever. I have not means to repay my debts in full. I have made some full and final payment offers to some creditors but never heard anything back from them. I can only assume the offer was too low for them. I have recently had another SD set aside successfully. I don't think it is in their interest to issue a statutory demand as they will not get anything at all, they are way down the list to get anything. Do you think it is worth writing to the DCA and telling them that making me bankrupt would not be in their interest.

[loanbuster]

Bankruptcy is still a dirty word, but nowhere as bad as it used to be. Although its still a bit of a bad stigma, most people who declare themselves, or indeed anyone who has been petitioned are usually relaesed from it within 12 months. this was introduced under The Enterprise Act 2002 I believe.

 

If you have a genuine consience and truly want to pay your debts, then why not go into an IVA. this will last for six years and once youve made the arrangement with the IVA Practitioner, youll only have to pay what you can afford. Its on your credit file for 6 years, but so is everything else, like defaults, CCJ's, the lot.

 

If as you say youve got no assets, then the liklihood that anyone will chace you with diligence is unlikely. No one in thier right mind will petition you considering what it costs them aganist what they are going to get out of you. If you got debts of 140k, you could pay 25% of that over 6 years. Thats just under 6k per annum.

 

As you have no assets, you are in a position of control. Just say to them, well look this is what Ive got, this is all you're getting - end of. If they dont like it well then tough, say petition me !! Dont tolerate crap from these bully boys, you have to take control of the reigns and make the rules.

 

SD's are abused in may ways, and to my knowledge the only creditors who will really go for Bankruptcy big time is Government depts like HMRC for example. They do it as a matter of principle, regardless of cost, just to eatch someone a lesson. Ive been told that by a friend of mine in HMRC Litigation.

 

The choice is yours to make, only you know the full extent of your problems.

[martin g]

Afternoon,

 

I obviuously don't know you, however I really think that the sensible thing for you to do is to go bankrupt. I appreciate that this may make you feel a failure but many businessmen and women who are successful today have been bankrupt in the past, or have declared a business insolvent.

In the States venture capitalists have no problem with ppeople who have been bankrupt on the basis that we learn from our mistakes.

I would suggest that you phone the National Debt Helpline who are, I beleive, sensible, non judgemental and who will give you unbiased advice.

 

Martin g