12k debt, is it worth?

ederj

Hi guys,

I am trying to help a family member clear a £12k debt and was thinking is it worth filling BR for a £12k debt?

They can pay a small amount a month but it just seems they are drowning in interest! Credit card is something stupid like minimum payment £45 and £31 is interest only....

Just thinking of alternatives...any advice?

Thanks in advance

Fishingtime

More info would be helpful.
You say they have 12k debt but what are their income/outgoings?

ederj

Fishingtime wrote: »

More info would be helpful.
You say they have 12k debt but what are their income/outgoings?

They get in around £1500/pm and the outgoing before paying any debt is around £1300-£1400, they have 2 young kids.....

midnight_express

Do they own their own property ?

Voyager2002

For a start, they should contact the credit card company; hand back the card and ask them to freeze the interest. If they are willing to stop borrowing and live with a bad credit record they should be able to freeze interest and maintain modest regular payments against the debt. They could certainly tell the lenders that they are considering bankruptcy as a way to stop the interest charges, but if they are reasonable negotiators then bankruptcy should not be necessary.

ederj

midnight_express wrote: »

Do they own their own property ?

no, they don't own they house. they rent

ederj

Voyager2002 wrote: »

For a start, they should contact the credit card company; hand back the card and ask them to freeze the interest. If they are willing to stop borrowing and live with a bad credit record they should be able to freeze interest and maintain modest regular payments against the debt. They could certainly tell the lenders that they are considering bankruptcy as a way to stop the interest charges, but if they are reasonable negotiators then bankruptcy should not be necessary.

that is a very good advice. I did not know they could hand the card back and freeze the outstanding balance! is that right?

alastairq

I did not know they could hand the card back and freeze the outstanding balance! is that right?

Whether or not the creditor freezes the interest on the balance is entirely up to the creditor, and is not a 'given'. Your friend can but ask?

What does need to be done is to contact one of the debt charities such as CAB or StepChange.

There are a number of options available for dealing with debt.

What the debt charities above can do, is to negotiate with the creditor on behalf of the debtor.
They can achieve positive results, but only because they have a degree of credibility within the finance industry.

Possibilities for future remedies could include, an IVA...or even, a DRO....which I think is what midnight express was maybe thinking of?

sniggings

as above contact a helpline, we are unable to help give a answer on what is best without all the details, a helpline gets all these details, then puts all the options to you/your friend.

As a general comment, I think in many/some cases BR would not be needed for a debt that size but given the right situation than it could be the correct step.

I used CCCS, they ring you back and go over all your debts and options, the call takes about an hour.

Voyager2002

ederj wrote: »

that is a very good advice. I did not know they could hand the card back and freeze the outstanding balance! is that right?

That was my experience. The lender knows that if they go to court, the judge is likely to freeze interest and set regular payments at a level that is affordable, given the debtor's income and other circumstances. So if the lender can get a result that is at least as good as that (for them), then they are likely to agree.