Credit Cards - Default - Settlement or Ignore?

Bounceback · 10 July 2012 at 2:55PM

Hi,

We had 3 credit cards with debts totalling about £30,000, long story very short we defaulted back in 2009, we have had an arrangement with one for a monthly payment but have now had to stop paying that too.

Our income is low, although it is possible we will come into a lump sum soon. Should we contact the card companies/agents to try and negotiate a settlement or just leave it for the 6 years? We will be moving house shortly and do not want these debts to follow us.

Sorry if I am posting in the wrong place, I'm new(ish) to posting.

Many thanks in advance.

Tixy · 10 July 2012 at 3:04PM

Hi

With debts of that level its possible that 1 or more of your creditors may obtain CCJs.
If they do obtain a CCJ then that will be on your file for 6more years - and the debts will never become statute barred.
If you move house and don't inform the creditors then any court papers would only be sent to your old address - so you wouldn't necessarily even be aware of any CCJs awarded against you. The first you might know about them might be a bailiff at your door.

There is also a possible risk of a creditor petitioning to make you bankrupt (not massively likely but certainly a possibility).

If you leave the debts unsettled and move then almost certainly at some point you will be traced, possibly by the creditor, or more likely by a debt collection agency.

At the end of the day - there will always be a risk to trying to walk away and hide from the debts. Its possible that you might not be taken to court and the debts might become statute barred, but with that level of debt many creditors wouldn't let them become statute barred, and would take action first.

Bounceback · 10 July 2012 at 4:32PM

Thanks so much for your response.

We don't want to hide, but neither can we afford to pay them back in full. From what I can see in the forum, the idea is to write and offer starting at 25% and negotiate from there. Is this the best advice?

Many thanks again.

Tixy · 10 July 2012 at 4:35PM

Bounceback wrote: »

Thanks so much for your response.

We don't want to hide, but neither can we afford to pay them back in full. From what I can see in the forum, the idea is to write and offer starting at 25% and negotiate from there. Is this the best advice?

Many thanks again.

Difficult to say - it depends on your situation and your personal finances.
Can you afford to raise 25% of the balance? how would you do that? by borrowing? from savings?
Do you have any surplus income at all a month to put towards the debts? if not do you have any assets? have you considered bankruptcy? or an IVA? or a DMP arranged by a charity?

Bounceback · 10 July 2012 at 8:19PM

Thank you for your post.

Unfortunately, like everything in life, it is not that simple. Husband was self-employed and we had 3 companies go bankrupt in succession. The nature of the business (transport) meant we have paid out costs that we will never get back. We no longer have savings, and are not in a position to borrow. The only option open to us is to sell our family home, the equity from the sale will go toward settling these debts.

We talked to the CCCS quite a time ago, and they were unable to suggest anything more than selling our home and trying to settle that way. We do not have spare money at the end of the month.