Viewing it from the other side

fattony

I have a client who's account is in arrears, Ive started legal proceedings and he has been to see CAB, they are requesting all creditors to inform them of the value owed, once they have this they will write back to us.

My concern is what if CAB say declare yourself bankrupt, this is a individual were dealing with not a company and as a small business I don't want to lose the money.

I have 2 options, inform CAB and see where it takes us or continue with the court, I think I want to continue with the court but if they advise of bankrupt I've lost.

Its terrible you can run up as much debt as your allowed to and then pay a few hundred quid and all debt gets wiped, think of it from a small business.

Would CAB advise bankruptcy? I believe the level of debt between a number of creditors is around £20k

Ineedaname

If the CAB had advised BR then it's unlikely you would have heard from them. Sounds to me like they're advising a Debt Management Plan in which you'll receive pro rata payments based on what your client can afford to pay across all his debts. It's something at least and if you're lucky you'll eventually receive everything that's owed to you.

If you press via the Courts you may find your client sticks two fingers in the air and goes BR. If you agree to let your client attempt to pay the debt then both sides are acting reasonably and a better outcome is more likely for you.

fattony

I hope so, i want to stick 2 fingers up at them and take it through the court but want to get my money somehow, what happens if they say he can only afford £1 a week?

Go for judgement then I guess

Ineedaname

If he can only afford to pay you £1 a week then that's because your debt is one of the smallest and that's the pro rata amount. Again, I'll say if you press through the Courts you may end up with nothing for your troubles except the Court costs to add to an irrecoverable debt.

Of course, if your client does go BR you may still get some money back. But any money he pays into an IPA will go to pay off the OR's fees first, then still be pro rata'd across all the debts. An IPA also only lasts for 3 years whereas a DMP is continuous.

I would go with the flow for the moment as when you receive an offer of payment from the CAB I think it will contain at least the amounts offered to the other creditors. That way you can see if you're small fry or one of the bigger debts. Unfortunately I've shredded all my DMP paperwork now or I could have looked to see what information the CAB form contains, it may even show you the outstanding amounts owed to each creditor.

I wouldn't push through the Courts just yet, wait and see, give your client the chance to pay, they are at least trying to negotiate something for all their creditors in a responsible manner by using the CAB to negotiate.

fattony

I have gone with the CAB for now, I've just emailed the person dealing with this case, thanks for your time

Ineedaname

Feel free to pop back and update us over time. It's interesting to hear from another perspective.