Debt repayment advice needed

iantoday

Hello, I just registered and would like to ask your advice on what I'm doing about my debts. I owe £18,000, of which £14,000 is to one bank. I anticipate being able to pay it off in three years but most of my income comes every four months and it is not guaranteed, though has proven reliable for a while. In between the period when I get some extra money, I am unemployed with an income of £205 per month, the not-guaranteed money I (legally!) get every four months normally is around £2000.

Anyway, I have this debt after an investment in a friends business that didn't go too well, mostly because he didn't tell me important necessary facts. In hindsight I should have asked about the business accounts more, but as the friend is (or was) a successful millionaire businessman, I thought he knew what he was doing and didn't feel I should talk about it.

So I got a loan to make the investment. A letter from him promising me an income was enough to get me the money. That was all about 14 month ago. Since January I've had difficulty making repayments and I have talked with a number of debt management companies, all of whom are so nice, helpful and plausible in everything they say.

Now I am hoping to do without those debt management companies by negotiating an agreement with the banks myself.

Here is what I am sending to the banks (shown in bold):


In view of my circumstances, I will be grateful if you temporarily place my account on hold and accept a token minimum payment of £10 per month which I will pay by standing order. Please provide the account details to which it should be paid to.

If interest is being added to my account I would be grateful for an offer of a debt settlement figure guaranteed reduced by 50% of the amount due at the time of payment if I can pay that off within three years of the date of this letter, and a freeze on interest if I can’t pay it off within three years of the date on this letter.

I suggest this reduction as the loan was provided on the basis of a letter from John Smith who stated that he would pay me for work. I did not find out until later that he was being sued for bankruptcy by one of his creditors. Your failure to check his credit status and ability to pay me when provided with his letter, which led to the loan to me, is a key part reason for why I am having this difficulty now.

A 50% reduction of the outstanding amount at the time of the payment will ensure you get the money back in full and early if all goes well and I am able to pay, along with a little interest added (including the money repaid so far).


So what do you think of this? Am I being fair? Will the banks go for it?

If the banks refuse the offer, then I have two options; either bankruptcy or debt management, with the option of suing the bank for causing insurmountable debt due to a flawed system that does not check the creditworthiness of a person or company promising future income.

Tixy

Hi

I think its a good idea to write to the bank and set up an arrangement.

What is the currently monthly repayment on the £14k? is this all a loan or several different products?

iantoday wrote: »

In view of my circumstances, I will be grateful if you temporarily place my account on hold and accept a token minimum payment of £10 per month which I will pay by standing order. Please provide the account details to which it should be paid to. this para is fine

If interest is being added to my account I would be grateful for an offer of a debt settlement figure guaranteed reduced by 50% of the amount due at the time of payment if I can pay that off within three years of the date of this letter, and a freeze on interest if I can’t pay it off within three years of the date on this letter. I'd be very surprised if they would go for this. They simply won't guarantee something 3years in advance. And I think it is overcomplicated - I suspect you'll be luck if they even understand what you mean. I would simply suggest you ask for interest and charges to be frozen.

I suggest this reduction as the loan was provided on the basis of a letter from John Smith who stated that he would pay me for work. I did not find out until later that he was being sued for bankruptcy by one of his creditors. Your failure to check his credit status and ability to pay me when provided with his letter, which led to the loan to me, is a key part reason for why I am having this difficulty now. They won't accept blame for not credit checking this person as they were not lending to him and personally I would not include this paragraph in so much detail. I would simply write that you had a failed business venture and that your current income is low/erratic.

A 50% reduction of the outstanding amount at the time of the payment will ensure you get the money back in full and early if all goes well and I am able to pay, along with a little interest added (including the money repaid so far).


So what do you think of this? Am I being fair? Will the banks go for it?

If the banks refuse the offer, then I have two options; either bankruptcy or debt management, with the option of suing the bank for causing insurmountable debt due to a flawed system that does not check the creditworthiness of a person or company promising future income.

If you do go down the debt management plan route then use a charity who will not charge you a fee.

I honestly think you have no chance of suing the bank based on what you have written. They would have had no ability or right to check the creditworthiness of a third party when giving you a loan. They will have assessed your credit worthiness and have decided you could afford to repay the loan and were worth the risk.