UK debts - living in Canada

[liz_8991]

Like many others we (a professional couple in our 50s) have fled our debts in the UK.

 

Background:

We had a house with a $180,000 mortgage, and a personal loan of $14,000 both with NatWest.

We each had 2 credit cards -NatWest and MBNA. When both of us lost our jobs in February and March 2008 we tried to go self-employed, tried renting our house, tried pretty much everything.

 

To cut the story short, it was a disaster. We could not generate enough income; the property management company were useless. we ended up financing the mortgage and loan using credit cards and it all spiralled out of control. We asked NatWest several times but they just would not halt interest charges on the loan and we could not pay that too, so in the end had to default. We put the house on the market and made arrangements with NatWest and MBNA CCs to make token £1 payments (with no additional interest)while we were making enough to pay the essentials plus the mortgage (£666 how ironic is that).

 

It was getting unbearable with letters arriving every day and phone calls too; we were starting to become ill from the stress and it was having a knock-on effect as we both have elderly mothers who were getting very upset by the whole situation. Of course we had missed the bubble. Now we could not sell the property and even if we did, the market had crashed and we would be in negative equity. So we finally made the difficult decision to give it up. I came to Canada and my spouse stayed behind to wind things up. I could n't face it. We gave the keys back to NatWest last Christmas. The house is still on the market. They have frozen the mortgage and the loan until such time as it sells, at which point we will still owe then the difference -assuming we're still alive. Que sera sera as far as that goes.

 

My question for the forum is about the credit card debt. We made the mistake -if only I'd read the forum pages back in 2009/10 -of speaking to the CC companies on the phone. They persuded us that we could inrease our payments (MBNA £70pm NatWest £15pm). So for the last 3 years we have been paying £200. We have kept it up pretty well but there have been some missed payments while we changed banks, changed cities, changed jobs etc. We have kept in touch with our local NatWest branch -who were fabulous by the way -via fax and have always informed them in writing of any change of address. We thought long and hard about not telling the CC companies and now I wish we hadn't, but back then (2010) we still believed we should 'do the right thing'.

 

So.... today we got a letter from Arden Credit Management (Co. no. 3303780 alias Moorgate Loan Servicing Limited). The letter, addressed incorrectly (town name misspelled) makes reference to an account number which does not correspond to any of our credit card accounts. However, from the sum mentioned I am assuming it is one of the MBNA cards. They state, "you have failed to make the agreed payment in relation to the repayment programme you agreed with us." They further state , "Failure to address this situation could result in us taking further action including passing your account to a third part or commencing legal action." We have never agreed anything with them; this is the first I have ever heard of them, and they are already a third party aren't they?

 

Questions:

1. Should we respond to these people?

2. Should we write to MBNA? There is no reference to MBNA at all in the Arden letter, so I cannot be 100% certain this is the debt in question.

3. What is the situation regatding legal action? We have no assets in the UK other than our household effects which are in storage because we can't afford to have them shipped to Canada. We are living in rented accommodation here.

 

We intend continuing our arranged payments. If and when the UK property is sold, I fully expect we will declare bankruptcy as the shortfall will be beyond our means.

 

Sorry this was a mammouth post, but then, life's complicated!

 

Any advice gratefully received.

 

Liz_8991

[cerberusalert]

We intend continuing our arranged payments. If and when the UK property is sold, I fully expect we will declare bankruptcy as the shortfall will be beyond our means.

You don't have to wait for it to be sold in order to apply for bankruptcy, in fact I would seriously consider looking into it now because you have two years to do so from leaving the UK otherwise you would have to use the Canadian system.

 

The OR will look into your present circumstances, income etc & would decide what if anything you should pay into the receivership & for how long. Which in the majority of cases isn't anything. This would get everyone off your back & you would be able to start afresh.

 

As for Arden, they do indeed deal with MBNA debts & they are probably using their own reference number rather than MBNA's. Personally I would ignore them, if you contact them they'll think they've got a bite & pester you continuously.

 

3. What is the situation regarding legal action? We have no assets in the UK other than our household effects which are in storage because we can't afford to have them shipped to Canada. We are living in rented accommodation here.

Technically because you still have an interest in the UK (the property) they could attempt to obtain a CCJ here and apply for a charging order on the property or even try to have it enforced in Canada or even possibly send you a Statutory Demand & apply for your bankruptcy, although if they did the latter they would in fact be doing you a favour as they would have to pay for the privilege.

[cerberusalert]

There are strict rules in Canada with regards to debt collection & even tho' they are UK companies chasing at the moment they still have to adhere to them. Have a read of; http://www.consumeractiongroup.co.uk/forum/showthread.php?307714-Prohibited-Collection-Practices-In-Canada-(Harassment)

[cerberusalert]

As for your property you still have in storage & the fact that you cannot afford to have it shipped over to Canada, have you considered reducing all your present repayments to a nominal amount (even if it's only £1 per month) & using the remainder towards the shipping costs & any bankruptcy application?

[liz_8991]

Thank you for all that. Quite a bit to take in.

1. Will take your advice and ignore Arden. They can't even get the address right nor did they supplying any reference we recognised.

2. Although we only handed over the keys to the property last December (2011) I actually left for Canada in August 2010. I have dual citizenship. I sponsored my spouse who is now here as a permanent resident -not yet a citizen. So I have physically been out of the country longer than 2 years already. Will that make any difference? When does the period for bankruptcy start, when we left or when we no longer held the keys to the residence?

3. What happens if we have to file under Canadian law? Does it make any difference in terms of assests? We don't own any property here.

Thank you for your assistance on this.

liz_8991

[cerberusalert]

Technically the period starts from when you leave the UK but I would suppose that because you still had the property until dec '11 it could count from then. Although there is nothing to stop you applying for bankruptcy in Canada. I would suggest doing a little research & see which of the two countries is the least strict & cheapest to apply for bankruptcy. In the UK it would cost around £750 but because you are out of the country you would need a solicitor to deal with it so would bump the costs up.

3. What happens if we have to file under Canadian law? Does it make any difference in terms of assests? We don't own any property here.

 

liz_8991

No there's no difference.

 

These are the basic details for bankruptcy in the UK http://www.adviceguide.org.uk/england/debt_e/debt_help_with_debt_e/debt_dealing_with_urgent_debts_e/bankruptcy.htm

 

In Canada details can be found here; http://www.servicecanada.gc.ca/eng/goc/bankruptcy_assistance.shtml