Daughters Debt

piggeh

There are some very opinionated people on this thread. Including myself :beer:

To clear a few points to the best of my knowledge:

a)Debts/CCJs last for 6 years. If there's been no contact in 6 years, then I don't believe they're chaseable beyond that period. However, any correspondence, and the timer gets reset. Therefore it's likely she'll have correspondence almost up to the date when she goes away, so she'll have to stay away for 6 years. Secondly, I would imagine she'd then be blacklisted through the CIFAS(?) fraud database, which will have more long-term consequences.

b)Students used to go bankrupt when the Enterprise act included Student Loans as part of their debt. This loophole was closed in 2003/4 though, so would have to be paid off regardless of bankruptcy or not (after all, it is tax payers money eh). Being a student who did declare bankruptcy in 2003, I can safely say it is the last resort for many students and certainly not an easy way out for anyone. Even with a bankruptcy you still have to pay a certain amount back through IPOs and have the indignity of not being able to get any forms of credit for quite a few years.

c)Running away for 3 years seems like a bit of a pipe dream - accounts frozen, cards cancelled, banks not authorising withdrawals from overseas, etc. Then she'll have to sort out a job & bank account whilst over there. Does she know what the process is to get an account and a job somewhere? Will there be visa limitations? eg USA & Australia both have time limits in which you can stay I think. I think this is highly unadvisable and it's better to face up to your debt problems than run away.

Having been in her situation, I would advise the following:

Ring the Consumer Credit Counselling Service, or another charity who specialise in financial problems (dont bother with Citizens advice, as they have less expertise in this area, in my experience). She can then lay out all her debts and they will help her deal with the companies and come to an arrangement on how much she can actually afford to pay. To do this, she lays out an income & expenditure plan detailing what her essentials are, and essential outgoings (they do allow a certain amount ofor clothes, going out, etc). Then a certain amount of her spare income is then offered to the companies as a reasonable amount that she can pay. The financial companies are pretty much duty bound to take what is on offer. If they try and take it further they are unlikely to get anywhere as your daughter can then show she has made a reasonable offer given her circumstances.

Sometimes this is a token payment (a quid a month, say), until her situation improves. It doesn't get rid of the debt, but it makes it much more manageable and keeps the wolves from the door. I actually tried this as first, but overcommitted what I thought I could pay, in an effort to try and pay it off in any kind of reasonable timeframe! In my case I decided to cut my losses whilst the loophole on student loans was still open and declared bankruptcy before the stress saw me do anything more drastic (Universities & banks have a big role to play in all this, but most don't like to do anything about it. Banks still force credit down your throat when they know you cant pay it off any time soon, and Uni's never have the right support structures in place to advise students on what to do).

Anyway -once she faces up to it and sorts out an Individual Voluntary agreement with a charity like the CCCS, she'll find it much more manageable and her credit rating won't be as badly affected as it would be doing a runner.

tyllwyd

I agree with others who have said that going travelling for three years (or six or more years) won't be as easy as it sounds. Has she thought about how she is going to earn the money to live while she is abroad? If she is planning to do low-skilled work, that means she will come back to the UK as a someone who graduated several years earlier but who has never worked in a job that matches her qualifications. She is going to find it twice as hard to find herself a job that makes all the sacrifices and hard work that she put in to get her degree worthwhile.