Can debts be written off, without going as far as an IVA or bankruptcy?

[Devon Cream Tea]

Hi,

 

I have debts totalling some £23,000. J

ust over £3000 is with Capital One,

around £750 is with Tesco Bank for a credit card,

around £400 is with Aqua, and

just under £19,000 is with my bank, HSBC, for repayments of a personal loan, for which the agreement was to pay back £325ish a month, but I've defaulted for around a year. They have just got back in touch regarding the default in payments, with covid having stalled their chasing. 

 

I earn £22,350-a-year, with an annual bonus usually averaging between £1500-£2000, although this was lower this year, unsurprisingly. I live with my partner, who I support, as her income as a freelance-writer isn't yet too considerable. I also have a dependent, who I pay child support for. 

 

Over the last few months, I have been making a second income, doing something called 'matched betting', which is a (legal) way of making money, by using free bet offers and voting at bet exchanges against the same thing. This could amount to over £5000-a-year. When I looked into an IVA, I was told that this would complicate things considerably, as it would look like typical gambling, on my bank statement, and would be hard to reconcile. The practice is actually not gambling, as winning is guaranteed, and you even know the amount you're going to win. 

 

Despite my debt, as my income isn't terrible, I'd like to be able to get a mortgage, at some point in the not-TOO-distant future. My credit score puts me only just in the 'poor' category, at the 'very poor' end. 

 

My two questions are thus:

are there any ways of writing off debt, without going as far as having an IVA?

With my debt and low credit score, I'm hardly the best candidate for a mortgage, but am hoping that I might stand a chance of getting one sooner than the five or six years I would be barred from having one, should I take an IVA or go bankrupt. 

 

Secondly, will any other options be affected by my matched betting income? Will any agencies simply see it as gambling expenditure? 

 

Any advice much-welcomed. 

 

Thank you.

[AndyOrch]

Hi and Welcome to the Forum.

 

A Debt Relief Order is far better than an IVA...but the current limit is 20K and I assume you are renting which is also a requirement.

 

https://www.stepchange.org/how-we-help/debt-relief-order.aspx

 

Andy

[Devon Cream Tea]

Thanks for your reply, Andy. Do you think the matched betting income would be problematic?

[dx100uk]

would it be possible for you to expand a wee bit more upon your debts please?

list for each debt...

 

original creditor

credit type

when you took it out

whats owed today

who owns the debt (I'E a DCA or still with the original creditor)

who you are paying now

defaulted date from credit file

 

lets see 1st, but never go fot IVA or BK ever...

[Devon Cream Tea]

MY debts total some £23,000. Just over £3000 is with Capital One, around £750 is with Tesco Bank for a credit card, around £400 is with Aqua, and just under £19,000 is with my bank, HSBC, for repayments of a personal loan, for which the agreement was to pay back £325ish a month.

 

Only the Tesco Bank debt is with a DCA. I've been paying only the actual creditors, as I haven't made a payment on the one that's with a DCA, since it was.

 

Really, I just want to ascertain whether there's a way of writing off any debt, without the effect being so detrimental to the ability to get a mortgage. If it would make it very, very difficult for me to get a mortgage for a whole five years, then I feel I should perhaps just work on paying them off. 

 

There's also, as mentioned, the question of whether matched betting income would look too strange on a bank statement, as to rule me out of such assistance.

[dx100uk]

pers id not worry about the matched payments or whatever it is.

 

are these debts defaulted on your credit file?

and is the tesco sold to the DCA and you've had a notice of assignment?

 

pers i'd simply use our prorata letters rather than going down any IVA/BK route

DRO would be very good if you can get one !!

any assets, home, car, etc?

[Devon Cream Tea]

Thanks for your reply.

 

I believe that one of them is defaulted on my credit file. 

 

Would a DRO potentially still allow me to get a mortgage, quicker than an IVA would?

Edited January 5, 2021 by Devon Cream Tea

[AndyOrch]

1 hour ago, Devon Cream Tea said:

Thanks for your reply, Andy. Do you think the matched betting income would be problematic?

Only if your surplus income is more than £50.00 pm as per below......Its all explained in the link I provided 

 

Why would my DRO application be declined?

Your DRO application will be declined if:

The total value of your qualifying debts is more than £20,000

You have assets worth more than £1,000 - though you can own a domestic motor vehicle worth up to £1,000 in addition to this

You have more than £50 each month in surplus income

You're currently under another insolvency solution, like bankruptcy or an IVA

You own a domestic vehicle worth more than £1,000

You're a homeowner

You haven't lived in England, Wales or Northern Ireland at some point in the last three years

 

https://www.stepchange.org/debt-info/debt-solutions.aspx?channel=ppc&gclid=CjwKCAiAudD_BRBXEiwAudakXzQWmjzWpn2mLn27R5mDwcrk0u7IievDAiFvtpb_7-isulfG25fCjxoC-i8QAvD_BwE&gclsrc=aw.ds

 

.

[Devon Cream Tea]

Thanks for the response.

 

Actually, I am earning more than £50-a-week, let alone a month, from the second income, so I guess that rules me out.

 

Interestingly, when I liaised with someone regarding a potential IVA, they seemed to think that my income levels, from both my job and second income, wouldn't rule me out in terms of their amount; only that the second income would make me look like a gambler. 

 

I'm probably scraping the barrel now, but are there any other options?

I presume not, as I'm not sure there's anything 'below' a DRO.

[slick132]

Hi DCT,

 

Andy referred above to Surplus Income of £50 ^^^^

[Devon Cream Tea]

Hi Slick,

 

Yes, so it would seem that a DRO won't work. I was just wondering if there are any other options. 

[AndyOrch]

Well whatever you decide dont go with an IVA...seems the bulk of the debt is with your Bank HSBC which you are already in default with....and assume they have defaulted you so whatever you choose your credit file is already damaged for  6 years.

[dx100uk]

pro rata letters is the way to go.

 

let me guess

this hsbc loans was to consolidate  existing hsbc debt?

 

dx

[Devon Cream Tea]

Andyorch: 

Thanks

1 hour ago, Andyorch said:

Well whatever you decide dont go with an IVA...seems the bulk of the debt is with your Bank HSBC which you are already in default with....and assume they have defaulted you so whatever you choose your credit file is already damaged for  6 years.

Thanks for your reply. Out of interest, why is it a bad idea to go for an IVA? 

 

To clarify, does a default actually damage your credit file for a whole six years, almost as much as an IVA/DRO would?

Edited January 6, 2021 by Devon Cream Tea
Posted too soon

[Devon Cream Tea]

1 hour ago, dx100uk said:

pro rata letters is the way to go.

 

let me guess

this hsbc loans was to consolidate  existing hsbc debt?

 

dx

Thanks for your reply. You're right, lol, it was. I take it that I can find out about pro-rata letters, here?

[AndyOrch]

The only person that benefits from an IVA is the provider..the Insolvency practitioner 

 

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/individual-voluntary-arrangements/

[dx100uk]

so typical HSBC, had you over a barrel, please don't tell me it was one of their 'managed loans' was it?

might pay you to get an sar off to them.

 

as for the pro rata letters, they are in the debt collection section of our library.

 

we've had people here with +£50k of debt that have seen lots dealt with and written of too without going formal.

 

 

[Devon Cream Tea]

Thanks for your replies. I have actually spoken with someone today, regarding an IVA. My total debt is over £23,000. They said that I could pay £90-a-month for five years, and that the other £18,000ish could then be written off. 

 

To me, it sounds like a good option. Why might it not be?

[dx100uk]

As long as they actually do what they say

sadly we find most of your payments are swallowed by their fees

And most ivas fail for one reason or another

 

bit busy

type in iva in our search top right have a read bit busy sorry.

 

for £23k no need for one..its not worth it. Not worth it if it was 2x that figure