Overseas and struggling

[Bandy75]

Hello

I've been living in Asia since late 2019, bringing some UK debt with me that I have been paying off with no problems. Due to the pandemic, my pay has been reduced, and my spouse has lost her job in the hospitality industry.

Due to this, the UK debts have increased and our income has significantly reduced. We are now in the position that if we continue to pay the UK debts at the full amount we will end up in debt in the country we now live in.

All payments are up to date (2 credit cards and 2 unsecured loans) as of the 1st March. My thoughts are to write to the four creditors and ask for a reduced payment plan. However, from experiences a friend of mine has been through, and the low amount we can afford to pay back, these will most likely be rejected and the debts passed to DCAs.

I have tried to get a loan to consolidate everything but no one will offer this as we are not UK residents.

I have informed two of the creditors of my current address overseas. One of the credit cards I haven't as you can only update a UK address in their system. The other loan currently still with our UK address is with the same high street bank as our residential mortgage. We have a long term tenant in our property in the UK.

I still have a UK bank account with another bank that the tenant pays the rent into, and we transfer money to this account  to pay the UK creditors each month. I also have a credit card with them that has zero balance.

I have mail redirection with Royal Mail set up and the tenant forwards anything they miss to my brother so I am confident that any communications would get to me in a reasonable time frame.

We want to ensure that nothing happens to our mortgaged UK property for obvious reasons. What is the worst-case scenario we are looking at here and what can we do to mitigate this taking on any advice this forum has to offer?

Thank you in advance.

[BankFodder]

It's still a bit early here but I am sure that my site team colleague @dx100uk will be along in the next couple of hours and tell you what he thinks.

 

monitor the thread

[Bandy75]

Thank you so much

[unclebulgaria67]

Are you planning to return to the UK at some point ?

 

It is important that you write to all UK creditors to confirm you live abroad. It is important that they know your finances have been impacted by Coronavirus and you are now in a financial hardship crisis position. This is so they can have no excuse of not trying to assist by not applying fees or increasing interest rate.

 

Your problem is that you own UK property, so you must remain in contact with UK creditors with them knowing you live outside the UK.  This will hopefully help to protect your UK property interests, by making it more difficult, as UK  creditors will know they have to follow correct legal process, where the debtor is abroad.

 

Are debts in one name only ? Or do you both have debts ?

 

Approximately how much is owed for each debt and what type of account ?

 

Approximately when did you take out these accounts originally ?

 

In regard to the mortgaged property in the UK which you have let to tenants, please answer following questions.

 

Is the mortgage on a buy to let basis or did you have permission from the mortgage company to let to tenants ?

 

Was the property your main residence in the UK, before you moved abroad, therefore UK creditors will have record of this address ?

 

Would you have any equity in the property after all selling costs if it were sold ?

 

Is the property in joint names of yourself and your spouse ?

 

 

[Bandy75]

4 hours ago, unclebulgaria67 said:

Are you planning to return to the UK at some point ?

 

No intention to for many years if at all.

 

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It is important that you write to all UK creditors to confirm you live abroad. It is important that they know your finances have been impacted by Coronavirus and you are now in a financial hardship crisis position. This is so they can have no excuse of not trying to assist by not applying fees or increasing interest rate.

 

Ok thank you, based on the feedback on the following questions, I intend to write to them all with my current address informing them of this before there are any defaults.

 

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Your problem is that you own UK property, so you must remain in contact with UK creditors with them knowing you live outside the UK.  This will hopefully help to protect your UK property interests, by making it more difficult, as UK  creditors will know they have to follow correct legal process, where the debtor is abroad.

 

Ok, I can do this, but will this affect the statute of limitations?

 

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Are debts in one name only ? Or do you both have debts ?

 

Yes only in my name

 

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Approximately how much is owed for each debt and what type of account ?

 

Credit card - £16000 (taken out in 2014)

Credit card - £32000 (taken out in 2015)

Unsecured Loan - £22000 (Taken out in 2019)

Unsecured Loan - 21000 (taken out in 2018)

 

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Approximately when did you take out these accounts originally ?

 

Added above

 

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In regard to the mortgaged property in the UK which you have let to tenants, please answer following questions.

 

Is the mortgage on a buy to let basis or did you have permission from the mortgage company to let to tenants ?

 

Its not. It has 4 years to run on the existing deal.  I had a tenancy management company managing the let. I didnt realsie at the time that I needed to seek permission so haven't done that either.

 

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Was the property your main residence in the UK, before you moved abroad, therefore UK creditors will have record of this address ?

 

Correct

 

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Would you have any equity in the property after all selling costs if it were sold ?

 

The debts probably equal a similar amount as the equity. Forgot to mention, I do have a second charge mortgage which has £11,000 left which I intend to keep paying.

 

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Is the property in joint names of yourself and your spouse ?

 

Just my name.

 

Alternatively, I could continue to pay the loan that is with the the same bank as my mortgage, but wouldn't be able to make much if any reduced repayments on the other three.

 

Thanks for your help.

[dx100uk]

you mentioned DCA's 

are all these debts still owned by the original creditors or have some been sold to debt buying DCA's?

if so which

[Bandy75]

They are all owned by the original creditors. I have not missed any payments but this is unsustainable.

 

I mentioned DCAs as I fear the creditors will pass my debts on to them when I write to ask for reduced payment plans.

 

I need help understanding how to deal with this as I have a property in the UK.

 

Thanks for your help.

[dx100uk]

stuff and all a DCA can do, they are not BAILIFFS and have ZERO legal powers on any debt no matter it's type.

 

pers i'd be using our pro rata letters in the debt collection section of the library.

 

who's the mortgage with?

who's the secured loan with (not a 2nd mortgage?) - with?

[Bandy75]

Mortgage with Barclays and second charge with United Trust bank. 
 

I was under the impression they could obtain a CCJ by default if I don’t know they served my UK address and then could apply to have a Charge against my property? 

 

thanks 

[dx100uk]

original creditors don't do court...thus can't get CO's

 

United Trust bank - you mean a secured loan showing by way of a charge on the property at the time of takeout, a loan not a mortgage.

 

 

 

[Bandy75]

Yes that’s correct.  A secured loan not a mortgage. 
 

thanks for confirming original creditors don’t do court. But if they pass debts to a collection agency, can they apply for a CCJ by default as I’m overseas and then apply for a charging order against the property?

[dx100uk]

there is a difference.........

 

pass = IGNORE a DCA (we write on behalf of our client xxx bank etc)

 

SELL = the original creditors issues a default notice, then latterly sells it on..if that happens there must be something seriously WRONG with a debt of + £10K if they do...won't happen IMHO. (you will get a Notice of Assignment - stating xxx bank etc have now sold the debt to us)

 

TBH: the quicker you get the pro rata plan running, the quicker the OC's might issue default notices (but not sell) and the quicker those DN's reach their 6th Birthday..... when the whole debt vanishes from your credit file preventing you from moving forward again...doesn't mean the debt is not still owed, just that prospective creditors can't see the debt anymore.

 

ok it's a 6yrs plan as such, but if you were to be honest to yourself, things are not going improve any in the short term so it's better to take control of YOUR money now and plan well ahead rather than worrying forever.

 

dx

 

 

 

 

 

[Bandy75]

Ok thanks for sharing. Sorry to ask all these questions, just trying to unlearn things I had been told previously.

 

I've found examples on these forums of people that find CCJs against them when overseas for small debts as they didnt defend due to claims sent to their UK address which they then need to set aside.

 

This seems to contradict what you are telling me (I'm not implying you're wrong) that a DCA has zero powers. How do people end up having CCJ's form these companies?

 

Thanks as always

[dx100uk]

correct a DCA has zero legal powers.

you don't need any 'legal powers' to issue a court claim..you or i can do that if we think someone owes us money, thats what the courts a are therefor, so a DCA thus has no more or less legal powers that you or i.

 

people end up getting backdoor CCJ's because they do not update their debt owners of their correct and current address.

you are abroad, you are also lucky (or unlucky in terms of a uk asset) someone lives in the only? UK address they could use....

you say you'd get the mail or notification anyway...so...

 

 

[Bandy75]

Thanks. I understand now. Sorry for being thick. Last question….. what do you mean by lucky or unlucky about having a UK asset?  Do you mean lucky that there is someone who can forward me any mail? What’s the unlucky part?  Thanks 

[unclebulgaria67]

You want to avoid any CCJ's, by ensuring all UK creditors have your current address abroad.  Also as dx suggests, making small payments based on current affordability would be wise.   Keeping the accounts running with original creditors bu making minimal payments, will give you time to consider options.

 

If it were myself in this position, I would be thinking how quickly could I get the tenants to vacate the UK property and how quickly could it be sold.  This would enable me to at least retrieve some equity after repaying any secured loan and the equity would then enable me to plan the next steps in my life.  I am not advocating walking away from debts, but I would be thinking, that if I end up with CCJ's or worse Bankruptcy, then with additional costs being added, I would have no money left.  And worse, if I had  to sell the property quickly, it may sell at a reduced price and I could still owe a debt after it had been sold.

 

So may be you should be getting some formal financial/legal advice in the near future, to see what you can do, to protects your interests as much as possible.

 

 

[Bandy75]

Ok thank you. So, am I implying correctly that even though I am overseas, and able to have any correspondence to the UK address forwarded to me, there is still a chance that bankruptcy proceedings could be brought against me?

 

Selling the property isnt really an option. 

 

Also I'm a bit confused. In reply ~12 the advice is to get the defaults and let them run their six year course, but if I make small payments wouldnt that keep the clock running?

[dx100uk]

once a debt is defaulted it matters not to it's 6th birthday CRA removal of the whole account if you pay afterwards.

don't confuse the statute barring date clock with the default registering clock

the later begins to count regardless to any payments which keeps the SB clock running.

 

as toward the asset. if you didn't have it, then we'd probably advise ignore everyone simply stop paying the lot. no asset to grab or get a ccj/CO against so no point. 

 

as for BK, thats a totally sep thing from CCJ's... very rare for anyone to do that nowadays. and again, not whilst owned by the OC's.

 

[Bandy75]

Ok got it. Once the default is 6 years it disappears from the credit file. Once there is no proof that I have acknowledged or made payement on the debt it becomes statute barred. Understood. It took a while but I think I've finally got it.

 

Appreciate the reassurance on bankruptcy.

 

One, final question. Ratesetter have just replied asking for a copy of my local country bank statements and a high res ptoto of my face next to my passport ID page to confirm for changing their records to an internation address. Is this just to protect from fraud? Seems a bit extreme.

[unclebulgaria67]

This is where it gets complicated because of the UK property asset.  Although you are living abroad, you have active financial interests in the UK.  And any debt buying DCA is going to be really really interested in your UK property. They will carry out reviews of your UK credit history and may also check land registry.  As soon as they see you have a property asset, they may pursue your debts more agressively. 

 

With DCA's who buy debts for about 10% of their value, it is all about the profit they can make.  And the amount involved may make it attractive to incur legal costs in an attempt to maximise the return they can achieve.

 

If you cannot sell the UK property, then yes you could stop paying, let the debts default, but in those 6 years, before the debts drop off your UK credit record, you are going to be in for a pretty stressful time.  They  (DCA's) are pretty likely to write to the UK address, even if you have told them you live abroad.  And they may send recovery agents to the address to make enquiries. 

 

As dx says Bankruptcy is much more difficult for creditors to apply for now.  But there are processes that can enable UK creditors to obtain CCJ's in the debtors absence from the UK.  This is helped by your continued financial activity in the UK, because of the UK property.

 

Re rate setter request, yes this is a anti-fraud protection and also to confirm you definitely live aborad.

 

[Bandy75]

Thanks for the additional context. I'm ok with them sending me letters. No one ever died from receiving words on paper. And as I will continue to have mail forwarding in place, the letters will just make their way to me. If a recovery agent comes round I am sure the tenant will just tell them I dont live there and to sod off. 

 

I suppose the time I will need to actively involve myself is if someone issues a county court claim against me at the UK address when they know full well I am on the other side of the planet. On that note, is it possible to stop a claim like that in its tracks, or do you need to wait till the judgment and then apply to have it set aside?

[dx100uk]

letter of claim is 1st.

 

but that will never come whilst as they are your debt are still with the original creditors 

years away from sale to DCA's if at all.

so forget DCA's...please. 

 

Just one point..

 

mail redirect does not always work nor is always allowed by royal mail for court documents

i'e a claimform pack from northants bulk.

many of these we have seen state do not forward on them.

 

now, stop panicking on the above for a moment and thinking this is bad...

a claimform pack should be preceded by a letter of claim which you would get redirected...

and ofcourse as above the wont be from an OC.

 

[Bandy75]

Ok thanks. I'll stop worrying about DCAs if thats the procedure. Thanks again for all your advice.

[Bandy75]

Hi, I am drafting the pro-rata letters and putting a income expenditure sheet together. One question, as I am overseas the expenditure currency is different to the debts. Are they entitled to see pay slips (also in anther currency which isnt indicated on the slips)?

[unclebulgaria67]

No they are not entitled to see payslips. Only if this ever went to Court and it was part of the Court process would this be required. So the information you provide needs to be accurate, in the remote possibility that your information is passed to a DCA who uses it in Court in the future.

 

Just enter all information onto your income/expenses sheet in Pounds Sterling.