DRO, Bankrupty, full & final settlements

seh567

Long story but need some advice.

After 4 short months of employment I am about to claim JSA, HB & CTB. I have struggled to pay my debts over a period of 3 years due to self employment poor pay and previous unemployment. I have been on a DMP with CCCS recently but now I no longer have a job I cannot keep up the payments. I phoned CCCS to find out what my options are and was expecting them to recommend bankruptcy as they did previously when I embarked on DMP. At the time I wanted to do the responsible thing and repay my debts but now because I have lost my job I think I have no alternative.

However, they advised me to go for a DRO, but my debt is approx £15.6 but they said to negotiate with one of the creditors for a full & final settlement to bring it below the limit. Having read about this on the forum I notice that you can't do a DRO if you have a contracted out serps insurance policy or private stakeholder pension pot, which I have from a previous employer, although they are small amounts it puts me over the £300 assets limit. If this is correct then I suppose it will have to be bankruptcy.

Have been speaking to my parents today and I really can't get my head round bankruptcy and its consequences. They have said they are willing to fund full & final settlement for 30% of the £15.5k debt I have spread over 5 creditors, Natwest, Nationwide, A & L, Egg and Barclaycard. I have been on a DMP for a couple of months with CCCS. What are the chances of these creditors agreeing to this level of settlement. Also would a f & f request letter be better coming from me or should my parents write to them explaining this is a limited time offer and leave them in no doubt that if this offer is refused I will have to declare myself bankrupt. Thanks

skylight

I would go BR and save your parents their money.

Its unlikely that ALL the creditors would take only 30%, you may get one but its going to be difficult to get them all done and dusted. Declaring to them to accept or you go BR is pointless; so many people claim that, they will ignore it truth or not (as they dont know which is which so call your bluff).


CCCS should not have advised that you undertake a DRO as you are over the maximum AND you have assets.

BR is a scary thought, but its nothing that you cannot deal with. What sort of consequences are you concerned about with it??

fiveyearplan

I agree with skylight on saving your parents their money. How long is it since you made a payment to your creditors? If it is a year or more then they would probably bite your hand off to take the 30% but you do have to make sure they all accept within a certain time period because if only some accept and some don't and you end up going bankrupt anyway it will have been a waste of your parent's money and I'm sure no matter what you'd want to repay them.

fatbelly

skylight wrote: »

CCCS should not have advised that you undertake a DRO as you are over the maximum AND you have assets.

Also, by doing a F&F with one creditor to bring down your total debt you are 'preferring one creditor over another' and this is an offence within the DRO regime which should result in a Debt Relief Restriction Order.

It sounds to me like you should have been lecturing the CCCS adviser rather than the other way around.

I agree with the other posters - let your parents give you the £360/£510 you need for bankruptcy.

seh567

Hi, thankyou for all you responses. I'm worried about the consequences of bankruptcy as up until a year ago I had a good credit record and I worry about the stigma it just seems a dirty word to some people. I managed to keep paying minimum credit card payments going until May this year, then paid a couple of months token £1 payments and then entered into DMP payments in August of this year. I have recently become unemployed 31/10/09 and have signed on for JS today. I have made a November payment via CCCS for this month but I guess I will run out of money before the end of the month so I am in a dilema after that. I am disappointed that CCCS gave me duff information and was concerned that offering f & f's was against the rules and I only found out that DRO's are not suitable for people with serps insurance polices from this forum. They made it sound like a DRO was much less serious than BR and gave me a bit of hope. Not sure what I should do now? should I go back to CCCS and ask whats the next course of action or should I go it alone a file for BR?

confused76

hiya
if you're not convinced of the advice you're getting from cccs, i rang the national debt helpline, they were very helpful. maybe give them a go and see what they suggest? they just laid out all my options

tigerfeet2006

I second Confused. NDL's link and no. in my sig.

If you read the Bankruptcy Help sticky it will explain a lot of things and ask any questions you need to.

There is not the stigma attached to BR as there used to be. Just read some threads on here and see.