Broke - what;s next?

[HP Mum]

What happens if one is broke and has no means to pay any debts?

By broke - I mean absolutely no assets, no income due to ill health and staying rent-free with a friend until better.

Legal case to prevent repossession - but lost.  Lawyers chasing unpaid bills - paid 20k out of savings/ owe 10k but almost no savings left - now threatening enforcement.  If aren't earning and have no savings - what can they enforce?  Surely cant get a ccj - cos no property to secure the 10k debt against.

Home repossessed and marketing/ sale disastrously handled by lender (they cant sell it) so will end up owing a fortune - and no means ever of repaying... now threatening bankruptcy.

Will the lawyers enforce by way of bankruptcy to get in before the lender does?  or is 10k too little to go for bankruptcy and a silly route cos they still wont get their due fees?

Only "income" is small amount of benefits... and apx £2k of savings which need to help live/ support children until am better.

 

[unclebulgaria67]

Tell them your situation in writing and ask how they want to proceed.

 

If you have no means/assets to pay these debts, then make them aware of this. They can still obtain CCJ's for a debt owed, but may wait to enforce it.

 

I would suggest looking into getting bankruptcy advice, to see whether it is worth waiting for repossession debt to be calculated first after the house is sold.

 

 

[HP Mum]

It is already clear that there will be no £s left upon a sale - whenever it happens.  They marketed it at half the price they had it professionally valued at and still can't sell it....  Lender knows there are no other assets.  

Are you suggesting to go bankrupt before lender or lawyer instigates the process?

[HP Mum]

The lawyer has been advised in writing constantly over last few months that there is zero ability to pay

[unclebulgaria67]

Yes you could go for bankruptcy, but get advice first. I doubt those you owe money to will make you bankrupt, as they realize it is pointless. It is the hassle of them contacting you and threatening a court claim, which may go on for years. Bankruptcy might be a way for you to clear debts and allow you to move on.

[BankFodder]

I would simply go bankrupt. At the end of the day your creditors will set off any written off debts against tax. They don't really care. In a year or so you can start your life again at zero.

There is no stigma nowadays to bankruptcy. Don't get into the habit of getting into debt – but this time go bankrupt

[HP Mum]

I think the lender will.  They are not very nice.  It is also a LOT of £s.  The situation was/is crazy.  Very simply one mistake was made - to borrow from a high interest lender at the very peak of the market before stamp duty changes and the madness of brexit arrived.   Cut long story short - 4 years of high interest and no-one buying a high-price property and boom all the equity built up over decades was wiped out.  Debt was never intended; should never have happened.  The aim was a sale within 4-6 months.  4 years later it still hasn't sold even at super low price - and its lovely.   No ability to repay loan when home didn't sell; no other lender would lend at normal rates. So interest accrued at ridiculous high %.  And continues to accrue despite repo.   Lender can't sell it either.  Only offers are cheeky - because that is just what is happening whilst politicians argue about policies and brexit.  Professional valuations have been shot to shreds.  None of them have any meaning when no-one is buying.  I guess lender will give up soon; take best (low) offer and one will be left with zero, threat of bankruptcy and enough stress for doctors to prescribe medication.. 

[HP Mum]

You are correct - that the lender doesn't care.  I have recorded all calls; the contents are shocking.  I recorded them because I noted the lender regularly called from mobiles - which meant their calls were not recorded.   They regularly threatened - illegal action too.  Nasty people.   But it is understood that its just business for them; yes they will write off the debt; they won't care that lives have been ruined in the process...

[unclebulgaria67]

No the lender won't as cost of bankruptcy application for a creditor will mean they won't bother. They will play a longer game, hoping you are in a better position many years in the future. If you research this you will see forum posts which will give you insight into how they operate.

[HP Mum]

Yes I am kind of aware of the longer term "games" they may try to play.  The application fees are chicken feed to them - they wont be worried about the cost.  But they are aware that I have no other assets now.  So I suspect you are correct.  I suspect they will assess/ gamble that I will have assets in the future 

Edited July 24, 2019 by HP Mum

[ericsbrother]

win the lottery in 10 years time and they will be after you.

Go bankrupt now and they will be the ones with egg on their faces