Written off Debts?

flis21

Hi All,

Am in a bit of a wierd situation. In 2005 my Husband and I contacted CCCS and were advised to do an IVA because of our debt situation. We did that, but unfortunately 6 months into it, I became very ill and had to give up my high paid job and take a much lower paid one. Anyway, the IVA failed as we couldn't keep up the payments and the creditors wouldn't accept a lower payment. We spoke to CCCS again and they said our best option was bankruptcy. Something, I must admit, I didn't really want to do.

Well, have been dragging our feet for a while on the whole issue. Then, on the advice of people from the BR board I applied for copies of our credit reports. A lot of our debts don't seem to be on there?!!

Do you think the companies have written them off? We are only currently being chased by 4 companies and we could afford to make payments to them to pay off the amount we owe. BUT if we start making payments will the other companies then come after us?

Our total debts are over £50,000, but the ones that chasing us only amounts to £12,000. If we cut back a bit we can afford to pay this off, ok it will take a few years, but surely would be better than bankruptcy.

Not sure what to do now, am all confused!!

flis21

Also, just been having a look at the reclaim your bank charges thread. £2000 of the debt is an overdraft and the reason the overdraft is so high is because of the amount of bank charges I used to get. So I could have a go at claiming that back, reckon it must be at least £1000 in bank charges if not more, so that will knock a bit more off the debt that needs repaying.

flis21

Still confused, any ideas anyone?

chilli_dog

I dont think they will have written of your debts, they could be in the process of moving them between departments or selling them to DCA's.

I suppose these things take time to sort out. They do have 6 years to contact you for repayment of the debt, they have forever to collect if they get a CCJ for it.

If your bank is one of your debtors that is quiet at the mo asking for your charges back may stir things up for you.

Becks_in_Debt

Give the reclaiming bank charges ago, me and my OH went through a very rough patch, we are claiming back from 2 account's from A & L, one we thought would be £300 max as we only used it for a short while, got the bank statements last thurs and they charged us with just under £700 in unlawful charges in 6 mths, so well worth a try, still waiting on the account statements.
I recently checked our credit through Experian and only 1 out of about 10 creditors that we owe money to is on there, and we are paying all the others back monthly so I wouldnt like to say, why dont you give your local CAB (Citizens Advice Bureau) a ring up, sure they would be able to help, they are free, they would be able to give you loads better advice or if you have subscribed to Experian or somebody talk to them they would be able to let you know if all Creditors should be on there, When did you make your last payment to all of them? ? ?

tomterm8

flis21 wrote: »

Hi All,

Am in a bit of a wierd situation. In 2005 my Husband and I contacted CCCS and were advised to do an IVA because of our debt situation. We did that, but unfortunately 6 months into it, I became very ill and had to give up my high paid job and take a much lower paid one. Anyway, the IVA failed as we couldn't keep up the payments and the creditors wouldn't accept a lower payment. We spoke to CCCS again and they said our best option was bankruptcy. Something, I must admit, I didn't really want to do.

Well, have been dragging our feet for a while on the whole issue. Then, on the advice of people from the BR board I applied for copies of our credit reports. A lot of our debts don't seem to be on there?!!

Do you think the companies have written them off? We are only currently being chased by 4 companies and we could afford to make payments to them to pay off the amount we owe. BUT if we start making payments will the other companies then come after us?

Our total debts are over £50,000, but the ones that chasing us only amounts to £12,000. If we cut back a bit we can afford to pay this off, ok it will take a few years, but surely would be better than bankruptcy.

Not sure what to do now, am all confused!!

I think it's very risky to think your creditors won't try to reclaim £38,000 in debts. They have at least 6 years from the date the IVA failed to try claiming, quite possibly 12 years.

If you can't get any sort of lump payment up I would consider writing to all your creditors giving (1) a SOA, and (2) informing them you have already sold all assets of value to pay outstanding debts


Dear Sir/Madam
Acc/Ref No 4563210025897412

We enclose a copy of our Personal Budget sheet and Net Liability sheet which gives details of our present financial circumstances.

As you can see our outgoings are more than our income and we are experiencing extreme financial hardship. After taking professional advice with the CCCS our only option would be bankruptcy. We have already sold all disposable assets in order to finance our existing debts.

We would be very grateful if you would consider writing off the outstanding debt owing. We have always taken very seriously our financial responsibilities but unfortunately our circumstances are so bad that we cannot realistically maintain payments of any kind. Please take the following special information into account when making your decision.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

As you can see our situation is very unlikely to improve in the future, and our continued high debt level may have a serious effect on our physical and mental wellbeing.

If it is not possible for you to write off this debt we ask you to start bankruptcy proceedings which we will not contest.

We would appreciate any help you can give us.

Yours faithfully

flis21

TomTerm8 - Why 12 years? Thought the limitation act only gave them 6 years to chase debts?

What are the chances that they would just write off the debt if I asked? I can't imagine they are very high. Maybe we will have to go the bankruptcy route after all.

tomterm8

flis21 wrote: »

TomTerm8 - Why 12 years? Thought the limitation act only gave them 6 years to chase debts?

What are the chances that they would just write off the debt if I asked? I can't imagine they are very high. Maybe we will have to go the bankruptcy route after all.

Most IVA's secure debt against property. Therefore, even if the original debt was unsecured, it becomes secured and the statutory period becomes 12 years.

If you have no assets, and no income that could be pursued through court action (i.e. you are on benefits) and you have debts of £50,000, the chance of writing off some or all of the debts is very high indeed.

Remember, these are companies, they don't want bad publicity, and their only other option is to seek to declare you bankrupt which would cost them money with no return.

Continuing to chase you when you have no means to pay is against OFT guidelines, and could cause their credit license to be revoked.

Remember that once you declare bankruptcy, debts are charged at 8%. Every debt that is written off could mean that if your situation improves for some reason your bankruptcy ends quicker and costs you less.

p.s. you want to get your creditors to pay for the bankruptcy hearing if you can:)

flis21

It can't be secured against property, as we don't own a property!

I am trying to sort out my SOA now and it seems that I have about £40 left a month, between 11 creditors that isn't going to go very far!

flis21

Also could you explain the 'once you declare bankruptcy, debts are charged at 8%' bit. Who are they charged to? To me? Does that mean I have to pay 8% of my debts before I can end the bankruptcy?

Sorry, probably all silly questions, but am trying my hardest to understand all of this.

tomterm8

The interest on your debt is 8% and is charged to the bankruptcy debt. This includes fees by your OR, your original debts, and some court charges.

Many assets you own before bankruptcy can be sold to pay this off, money you earn beyond that necessary to sustain life during your bankruptcy can also be clamed by the OR, and money subject an agreement after your bankruptcy that lasts up to 3 years could be charged to pay it off. So, for example, if you inherited money part of it could go to repay part of your bankruptcy.

If you pay off the entire debts of the bankruptcy, it ends before the official date.

When your bankruptcy is discharged, and any agreements end, your remaining debts are written off.

If you need any more info on this. go to the bankruptcy support forum, and ask. They'll be able to quote chapter and verse.

===
Your creditors still have 4 years to apply for a CCJ - which they would get - after which the statute of limitations would not apply.

I would advise you to post the SOA. Maybe we can find you some more money.

Take the SOA to the CCCS and PayPlan for a second opinion. They might be able to change their advice.

Frankly, though, £40 a month isn't going to cover the interest on your debt. To be honest, I believe that if after showing us the SOA - if your situation is still bad enough for CCCS to advise bankruptcy, your best option is probably to send out the letter I gave you, prepare the forms for bankruptcy and if your creditors refuse to write off your debts - or start bankruptcy proceedings themselves- declare bankruptcy.

Don't wait 3 years, just for the nightmare to start again.

(Also, do go to the Bankruptcy Support Forum, at the top of the debt free wannabies and read the posts. Bankruptcy is bad, BUT you don't get a "666" stapled onto your head, it does not make you an evil person, and it is not a crime to become bankrupt.)