Default Notices Rolling In - What to Expect Next?

DNW_2

We're around 4 months in on our long debt-free journey and have only been making token £1 a month payments to all of our creditors due to a shortfall in our income/expenditure caused by redundancy. Several of our creditors have unsurprisingly defaulted us - but what happens next? Is it now that debts will be passed to DCAs? Or will they go straight to court for CCJ proceedings?

I have managed to find additional part-time work but it's only casual so we can't offer the money from that as regular increased monthly payments as I've no idea if I'll have work from one week to the next, so what we are hoping to do is put the money aside ready to offer full and final settlements on at least some of the debts - which leads to my second question:

Do we have to offer all creditors F&F at the same time or can we select those that we're able to afford? One of my creditors has sent a letter offering a whopping 70% discount on a debt of around £800 which means a payment of £250 would clear this one creditor completely. I'd very much like to clear this one as it's such a good offer considering the low age of the debt and the fact that they have approached us with it. I don't know though if it would go against us in some way with other creditors?

As ever, thanks in advance for any advice.

tilly2484

Hiya-I'm not an expert on here so not got much advice but just to let you know what has happened with mine.

We have been paying £1 token payments since July 2010. All have defaults and 2 have gone to DCAs. The only one who hasn't is Santander. I'm getting advice from the CCCS but not on a plan at present. All my 3 creditors have been pretty good really, esp santander- everyone I have spoken to has been nice and helpful. I have increased one of the payments to £20 but over the next few months I need to get a plan together to start increasing these.

Not advice I know but just wanted to let you know what had happened with mine.

I think you can choose who you give a lump sum too- but i'm not 100%. I have paid off chunks when i have had extra money and the others have not been aware. I suppose it is different though in terms of regular monthly payments.

tilly2484

Just bumping this up for you to see if anyone else can give some advice

DNW_2

Thanks for the bumps Tilly, and for letting me know of your experience

Bumping myself again now!


Can anyone offer a little advice as per my OP? Mainly the F&F settlement to only 1 creditor (for now at least), and also what happens when debts get passed to court for CCJs?

Thanks

fatbelly

30% is a good offer and there's no problem picking that one off if that's the strategy you're using.

But are you really going to clear 80k this way? How long will it take? Is insolvency not an option? If it is, don't try F&Fs because you need to treat all creditors equally.

You seem to think ccjs are common and they're not. However, it sounds like you have either a lot of creditors or some high-value debts. So it is more likely but it's a case of 'cross that bridge when you come to it'

DNW_2

To be honest, I don't know if what we are doing could be called a strategy at this stage. We're just blundering on learning how to budget and more importantly how to live within a budget for the first times in either of our lives

Our regular and guaranteed income (well as much as any salary is guaranteed these days) is just about enough to get by on with strict budgeting on a monthly basis, but with nothing left over for debt repayments. Both myself and OH have now managed to pick up additional part time work, but none of it is regular or fixed hours so we can't rely on the money coming in from that for making regular payments which is why we're stashing it all away for now for the longer term payoffs.

We are pretty much in it for the long haul and wouldnt even hope to be able to pay everything off in less than maybe 6 years, but in time hopefully our income will pick up and the kids (2 x teenagers) will start working and being a little more financially independant.

In terms of creditors, we have 15 of them ranging from debts of £800 up to around £15k.

We haven't considered insolvency really, although I have looked very briefly into it. I don't really like the idea of the debt being 'wiped out', and I'd rather we pay back as much as we possibly can - all be it with discounted F&F offers where they are offered. We also have concerns about losing our home that we've still got another 15 years of mortgage left on. If we lose this now then we will never own our own place again as we'll be too old to start again on the mortgage ladder once our bad credit history has dropped off and been rebuilt. Although the actual loan to value of the mortgage is somewhere around the 95-100% mark now that property prices have dropped so considerably in our area. The last thing holding us back from bankruptcy is my OH - he has a motorbike valued at around £5000 which he couldn't bare to part with as it was the only thing he's ever paid cash for - and it was bought with the money he was left when his dad died. To lose this would totally break his heart, but I would guess that the OR would claim this to be sold and the proceeds go towards debts. I know morally this would be the right thing to do, but this really would be completely last resort. I'd rather spend an extra couple of years making payments than for him to lose his pride and joy.

Sorry, I've waffled a little and I'm not even sure what I was trying to say in the first place :rotfl: That's histeria btw, not your normal laughing!

thechippy

Have you cca'd any of the creditors?
Have any of the loans / cards got ppi on them?

DNW_2

Haven't cca'd anyone yet, there may be a few older accounts in there but there are some newer (<4 years old) too. As I'm making token payments I thought this was enough for creditors to enforce debts anyway?

No ppi ever taken out that I'm aware of, so nothing to reclaim there unfortunately.

dancingfairy

o.k with bankruptcy they will look at any equity in the house at the 2 year 3 month mark and then decide what to do with it. If there is enough equity (not sure what the minimum is) then they would be looking at taking the house. I can understand about the motorbike though.
Another option might be an IVA where you pay back whatever you can after your expenses and arrange basically that your creditors get x amount in the pound back over the 4? years and you would have to offer to at least attenpt to release any equity or make an extra years payments. If you had a surplus after essential bills this might be worth looking at but from what you've said this might not be an option either for you at the moment?
It's worth keeping these things in mind in case your circumstances change in the future.
Good Luck with your plan though.
df

dancingfairy

Oh and your creditors are likely to threaten you with CCJ's etc but they may or may not follow it through. IF they did decide to take you to court then unless you particularly had a really good argument then it is highly likely that the creditors would get a CCJ - ie the judge would agree that you owe the money and haven't repaid it. You can then ask to pay in installments at a level you can afford (as shown by your budget).
You wouldn't even necessarily need to attend court but as Fatbelly said you can deal with that IF it happens.
You will notice if they are proper court papers or threatograms - if in doubt post on here and I'm sure someone can steer you in the right direction.
df

DNW_2

Thanks DF, an IVA isn't an option at the moment either - after all essential and basic expenses (incl £1 token payments) has been taken off, we're left with £59.50 a month for groceries for 4 of us so we're living off some of the additional and irregular income we're able to bring in on a daily basis as well as saving every penny of it that we can.

I can't really see our situation improving in the short term for sure, we're both working silly hours now just to get by and ebaying every free listing weekend so I don't think realistically that we'll be able to up our income and/or make any savings to our basic budget so the long term 'hope for low-ish F&F in a few years time' option seems the only one we can take.

Oh well, it took us 20+ years to spend it all, if we can pay it back in 10 then we'll be in a better place once my OH retires from his regular (fixed retirement age) job and the pressure to look for extra work at a time when he should be putting his feet up will be a little less. One day we will save enough for that motorhome and travel around the world though!