Debt in retirement

Tominthemiddle

For the past 6 years I have been under a major debt company, with debts of over £30,000.
I have been paying £100 per month which doesn't reduce the debt, but it keeps the creditors away from the door.
I am due to retire soon, and there is no way I will be able to continue with these payments, Is Bankruptcy my best option ?

alastairq

Hi........................................... welcome!

Before anyone can offer any comment on your question, certain things need to be known.

Firstly, do you own a property? [Or do you rent?]

If the former, what amount of equity is in the property?

When you do eventually 'retire'....will you receive any sort of pension other than the State pension?

If so, what amount of 'lump sum' will you receive?

Obviously, when looking at retirement, one's so-called 'credit rating ' won't be an issue......


However, it is also tempting [if not living in own property] to simply stop paying the creditor.
When they eventually go to court for a CCJ, you can be there to tell the Judge you are on a pension, therefore any likelihood of surplus will be negligible. Even a Court will not get blood-out-of-stones'....

Tominthemiddle

Thanks for your reply

No I do not own a property, and I rent from the private sector.

Retirement is in May, There is a smallish work pensions which I am converting into a annuity, But If I take an amount in cash, I will have even less to live on.

Should I notify the Debt Managemen company, So the creditors ultimately make me Bankrupt, or should I apply for bankruptcy myself ?
If I do it myself, How much does it cost, as I dont have much money in the bank.

caffsean

Hello, when you say under a debt management company for the last 6 years - do you mean you've got a debt management plan or you've got an IVA as i thought they only lasted 5 years?

Tominthemiddle

Hi

Yes Its a debt recovery plan (supposidly) NOT an IVA, Basically the debt has remained the same throughout.

It was started in 2007, and every year since, I have had to supply details of income and expenditure, that gives me an amount that I can afford to pay to creditors plus an amount of approx £20 per month that is payable to the management company, In total approx £120.00 per month.

No longer working now and retirement is fast approaching.

PippaGirl_2

Sounds like you are using one of those awful leech like debt companies you pay a fee to, the ones who make money out of people in debt? I would go to the CAB who will take over the DMT and do exactly the same for free, then if the companies continue to freeze the interest as they should do, then at least your debt is reducing. Atm you are getting nowhere. That will give you a little breathing space to think about whether BR is an option. The CAB or step change could advise you on that too.

Tominthemiddle

Thanx for your reply pippagirl, BUT

your reply doesn't answer the question I first posted, Going to cab is advice that I knew anyway.

I was looking for constructive advice as to my initial question.

luvchocolate

Hi in defense of Pippa your question was ...would br be your best option? You are best getting advice from one of the debt charities, we can not really tell you what to do, but it is of course one way to go after getting all the information you can.
Good luck

Tominthemiddle

Thanks luvchocolate

The options were wait for creditors to make me bankrupt, or make myself bankrupt.
There was never a question of moving to another debt management company or debt charity,in Retirement, because I will not be able to make any further payments when I retire,through lack of money So I will probably make myself Bankrupt, Thanx to everyone who replied.

PippaGirl_2

Hi Tom, as luvchocolate said your OP asked whether BR was the best option as the question. My answer to that was it is you would need to seek legal advice from a specialist advisor. Usually when you go to court for BR the Judge (or clerk) will ask what legal advice you have taken wrt whether BR was the right course of action for you and if you have not sought advice from specialists the Judge may not approve the BR until you have. It's an action difficult and expensive to undo so not something to be taken without such advice.

Your new question, as to whether to make yourself BR or wait for creditors to do it, there are various factors. Firstly is whether it is likely that a creditor would ever take such action, if they did it would cost them money and if you have no assets and they may well know if you do or don't, then they would be paying out the court costs and getting nothing back so almost all creditors won't bother with making someone BR if they know you have no assets. One exception off the top of my head is independent schools who are owed fees as they may have BR insurance and can claim on that if someone goes BR. So instead all the creditors will usually increase pressure, sell debt on, the letters will continue, so may people door knock etc. and all that is unpleasant.

People say an advantage of doing it yourself if faced with an either or is that doing it yourself places you in control of when and how and it is in your timescale.

I hope that helps.

Tominthemiddle

Thanx Pippagirl

The information that you have given me is great, and the sort of information and advice I was looking for, when I first posted my problem.

I will now go and seek legal advice at CAB, before probably making myself bankrupt.

Thanks again :T