Credit card company wants bankruptcy - full and final offer

mrsf77

Hi,

I'm not sure if this is the right place to post this but hopefully someone can help.

My mum has got herself into a lot of debt, @£22,000 (that is what she has told me so it is probably more) she is with payplan. Some of the credit/store card companies have not agreed to the amounts that payplan have been giving them. One of the credit card companies have applied for a bankruptcy hearing to reclaim the £5000 she owes them. She went to court today to see if the hearing will be allowed and although the judge said he doesnt know why they have applied for it for such a relatively low amount (his words) he has to allow the hearing as there is no reason why they (the bank) cant have one. He has advised her that she could send them a letter offering them an amount as full and final settlement. She is currently paying then £38 per month and did tell payplan a few months ago she could up this by £50 but they advised her not to as other companies would start chasing for more money.
Basically I have told her that I think she should send a letter offering them full and final settlement of £2000.
I will lend her the money if I have to so she can get access to it.
She is really worried about having the bankruptcy order as she could loose her job and obviously her house plus she is a single mum so is worried about my sisters future as well.
Do you think £2000 is enough?
Has anyone else been in this situation?

LilacPixie

I think she may struggle to get them to agree to a F&F of 2k of a 5k debt. Especially if they are petitioning BR.

Bismarck

Assuming costs of approx £1500 to £1700 to do the BR, I'm guessing the bank would need over £3000 to buy them off..worth maybe starting at £2.5K and then going up to whatever you have to.

I'm also surprised they've gone for BR as the costs to them are relatively small compared to the amount owed. Wonder what the other creditors would feel if their debts were wiped?

Which CC company is it?>

mrsf77

what amount is reasonable?
She hasnt got any savings and would have to borrow the money. She has been paying them the amount they originally agreed every month so doesnt understand why they want to take it to court.

mrsf77

Bismarck wrote: »

Assuming costs of approx £1500 to £1700 to do the BR, I'm guessing the bank would need over £3000 to buy them off..worth maybe starting at £2.5K and then going up to whatever you have to.

I'm also surprised they've gone for BR as the costs to them are relatively small compared to the amount owed. Wonder what the other creditors would feel if their debts were wiped?

Which CC company is it?>

The credit card was with Citibank who has passed it on to First Direct.

LilacPixie

I would guess that if they really have petitioned the court then they think she has assests which would enable them to get the whole 5k plus the cost of the BR.

She may also have to bare in mind that if she herself borrows money then it may put her DMP in jepordy. I know CCCS take additional borring very seriously but payplan may be diffrent plus a family loan may also be different.

What are payplan saying to the matter?? Has she tried contacting one of the other charites??

With regards to a F&F if the creditor thinks she has assets you may have to offer the full 5k to stop the BR hearing.

CLAPTON

is she renting or buying her home?
if buying how much is it worth and how much the mortgage

why would she lose her job if made bankrupt?

louietudor

i did not think credit card company's would bankrupt someone for £5000 - very worrying

tigerfeet2006

Get her to ring National Debtline or CCCS and get some professional advise on this.

I think she will have problems with her DMP if she borrows any more. If she goes to court on the hearing day she should take a SOA with her to show she is paying what she can.

It might also be a good idea to get her SOA up on the board.

Deep_In_Debt

Is it a problem if you borrow from family or friends? I'm on a DMP with CCCS at the moment and I've borrowed money from my mum to clear off a couple of my smaller creditors. I told CCCS this, and said that I would pay my mum back out of my living budget at an affordable rate. At least mum won't charge me interest or take me to court if I fail to pay. CCCS seemed ok with this as I'd agreed for the payments to come of my budget. I don't think CCCS take kindly to people borrowing money from organisations whilst on DMP's but it's certainly worth giving them a call and discussing it with them.

mrsf77

CLAPTON wrote: »

is she renting or buying her home?
if buying how much is it worth and how much the mortgage

why would she lose her job if made bankrupt?

she owns her own home. The house (last valued in Aug last year) was worth around £160000 and the mortagage is around £145000.

The judge warned that she should check her cotnract as because she work for the NHS she could loose her job.