Pay just £1 - how can this help?

Crisp_£_note

For a few weeks now I have not taken action on advice I was given by CCCS .

I was told as we have no surpless income we cant afford to continue to pay the debts at the current original agreed repayments. We were advised to write to each creditor and send in our Income and Expenditure list and a £1 token payment and continue to do this until circumstances change then reveiw it. They cant help any more until then. Payplan just offered Bankruptsy (very tempting but sadly not an option as hubby self employed)

However I cant see circumstances changing in 2 years let alone 6 months and am very worried that offering just £1 would put us deeper in debt even though it freed up more money for us elsewhere. We are in rented accommodation and have aprox £15,000 debt and am strugling to put food on the table.

Are there any alternatives other than bankrupsy (not an option as hubby self employed) ? Is there a way we can ask them to wipe out debt or consider a deal or at the very least freeze all further interest and late payment charges so we can actuyally start to reduce the debt not just pay fees? Any template letter?

I have made a note I must deal with this on Monday as cant keep putting it off just because it doesnt make sense.

Many thanks

RAS

Hi Crisp

Can I ask why bankruptcy is not an option for OH as he isself-employed. Undischarged bankrupts cannot be company directors, but a lot are self employed.

I suggest you ring NDL and CCCS and ask them to explain why, preferably with OH.

Secondly, there are new rules coming in for different types of debt relief, so it may be in April that the advice is different.

How much of this debt is yours, his and joint?

Re-reading your other thread, have you started reclaiming the PPI and bank charges yet?

pjays666

Hi crisp, i agree with RAS you can still be self employed and file for bankruptcy. I was forced into this when i got divorced about 10 years ago and i set up my own business just after that (although i didnt turn it into a limited company until 6 months after discharge from bankruptcy) If things really are as bad as you say it has got to be worth considering. As self employed is particularly quiet at the moment with media frightening people into not spending but things will definately pick up later this year. I think your creditors will freeze interest payments if you go down the route of CCCS advise so you should be able to see a light and if you say you can only afford a pound you could try saving something towards lowering your debts but only give everyone the same percentage so they cant say you are favouring others. Good luck and keep posting

Deep_In_Debt

Paying £ just shows that you are committed to paying your debts and shows creditors that you are struggling so they may be more sympathetic to your plight and agree to freeze interest for a period of time. I second what others have said - BR may be an option for you and I'm surprised that CCCS didn't recommend that.

continualdiamond

You'd be surprised how paying just £1 really helps. My OH lost his job Feb 08, really bad timing as we'd just gone into a DMP with payplan Nov 07.

Payplan were great, we technically had nothing to offer, but they suggested the £1 to each creditor and we decided to try that 1st before anything else.

Nearly 6mths had passed and every single creditor was 'nicer' than they were when we initially set up the DMP, they seemed to actually show they cared.

Granted payplan could only do this for us for 6mths and if my OH hadn't found a job by then they recommended BR as well. However he got a job with 2 weeks to spare before 6mths had passed.

Some creditors even now have kept their minimum payment we must send to them as £1 even though they get more. Our debt didn't increase either, as payplan were acting for us in our inital set up of the DMP all creditors stopped adding interest.

fatbelly

Have a look at

What is a debt relief order?

and see if that might work for one or other of you.

GeorgeUK

Are you in Scotland? You may want to see if a Debt Arrangement Scheme (DAS) is an option.

Have you reclaimed any bank or credit card charges you have had?
Were you missold payment protection insurance?