CCJ or Bankruptcy?

Paul40

Hi,

I have been posting a couple of questions on the bankruptcy forum over the past couple of weeks. But, I have a couple of questions for you lovely, helpful people over here.

I am trying to avoid bankruptcy if at all possible. Can anyone please help?

All my creditors (£22k as a total debt) are either personal loans, credit cards or a bank overdraft. I am currently unemployed but hoping to get a job soon. I don't own a house and have no assets. But, thinking I might get a BRO or worse, I'm trying to see what other options to bankruptcy there are.

Some of my creditors have already accepted reduced payments from April 2010. Others will not budge at all. I've tried the standard format letters, but, they are just not interested at all.

I'm not bothered about all the intimidation and letters too much. And, I know that they have very little chance of getting to me at home. I've changed telephone number so that they can't contact me either. And, I know that they have very little power to make me pay money that I can't pay.

However, my questions are:

1) If I pay the creditors that have accepted my reduced payments, would I then have to pay the other creditors a pro-rata amount based on what I am paying those that have accepted (to avoid being accused of preferencial treatment if I ever did have to go bankrupt in the future)? Or, can I continue to pay the 'awkward creditors' nominal payments until such time that an agreement can be reached or they take me to court?

2) What is the worse that can happen to me? CCJ's seem nasty, but, in all honesty, creditors are likely to get less from me than I am offering now, as, I am unemployed, and have no property for them to place a charging order over. Would CCJ's only be an issue if I wasn't to maintain the payments ordered by the courts?

Any help would be very much appreciated.

Tixy

Hi Paul

A CCJ will make it very hard for you to get credit for the next 6years. But then so will bankruptcy.

If you are on benefits you could pay all your creditors just very small token payments - that would be 'reasonable'. If you have agreed to pay some slightly more I don't think in your situation you need to pro-rata all the other payments - as you simply cannot afford to.

Have you spoken to any of the debt charities? did they recommend bankruptcy?

If you get a CCJ the judge should only be ordering you to pay an affordable amount, which as you rightly say you need to then keep up with.

As you have no assets then the issue of baliffs probably isn't a major one for you.

If you find work will you be able to resume full repayments? or at least much higher payments - have you worked out how long it might take you to get debt free if you find work soon? This may help you decide whether bankruptcy might be the better option for you.

BigCraigJohn

Paul i'm in a similar position, ie cant afford monthly payments and have hit a point of come to a position of bankruptcy unless theres a way around. However have a look at this. If an agreement is unenforceable, they can default you but cant take it to court.
http://forums.moneysavingexpert.com/showthread.html?t=2305463

Paul40

Thank Tixy for your reply...

Yes, bankruptcy has been recommended. But, I just want to try to avoid bankruptcy first. See, I took out a loan a little over 2 years ago, but I was in between jobs. But, I used my previous employer details on the Loan Application to obtain the loan. Yes, very stupid of me. Now, I know the possibility of prosecution is very slim (after chatting to others). But, not sure that I can even take that chance. And, I didn't realise that it would cause so much problems at the time. But, there you have it. It has, and now I am suffering through my own conscience. And, that's even before anything real has actually happened to me regarding it.

Yes, my intention is to build up the repayments again when I get back into work. Although, I doubt now that I will ever be able to make the same level of payments that I was making prior to losing my job. Debt would take about 6-7 years to repay if all creditors stop charging interest. I am aware that this is a long time. But, it is a small price to pay to ease my concerns regarding prosecution.

Bailiffs - don't they only get involved if you do not meet the repayments ordered in the CCJ?

And, thanks to BCJ for your post as well. and the link. I'll have a proper read through.

Tixy

Paul40 wrote: »

Bailiffs - don't they only get involved if you do not meet the repayments ordered in the CCJ?

Yes - but if you had assets the judge could order payments higher than you could meet just based on your benefits (not necessarily that likely but unfortunately there are good and bad judges - or sympathetic and not sympathetic).

Regarding the other issue - I see your quandry, I would not have a clue how likely it would be that you could be prosecuted but I do think I might feel the same and not want to take the chance if I could help it