Will they bankrupt me?

anotherdebtor

Ok, my situation is not good. Not good at all. The background is largely irrelevant, but I'm worried about losing my home.

I own my home outright, no mortgage no secured debts. That is my only asset.

I do however have unsecured debts. The significant ones (over £100) are shared by three creditors (Bank1, Bank2 and Credit Card)

Bank1 loan - now passed to a recovery company - approx £4K
Bank1 overdraft - approx 0.8K
Bank2 loan - now passed to a recovery company - approx £1.9K
Credit card - now passed to a recovery company - approx £3.7K

I have no income. None. Nada. Zilch.

I have paid nothing towards these debts since September 12.

I understand that Bank1 and the Credit card (or at least the recovery companies) *can* make me bankrupt - I owe over £3K (this is Scotland) and I am without doubt insolvant. The question is will they?

I've been reassured by a money advice worker that its almost unheard of for a creditor to proceed with bankrupcy under £10K, but in most of these cases the debtor will not have assets, whereas I do have significant equity in my home.

1. Is this something that they are likely to do
2. If I get bankruptcy court order can I stop it?

Above all, I do not want to lose my home, either to bankrupcy or selling it myself -which would get me out of this mess, but this is my home and I really, really really don't want to lose it.

(P.S. Save the lectures, yes, I know I shouldn't have got into this situation)

Flyright

You are clearly not insolvent. If you own your house outright then your assets outstrip your debts.

anotherdebtor

I though insolvancy was not having the money to make repayments.

Can they force me to sell the house?

dojoman

Yes they can, how much is your home worth?

anotherdebtor

Its worth approximately 100K

dojoman

anotherdebtor wrote: »

Its worth approximately 100K

Then there is a good chance they will make you BR as they would recoup their losses and expenses, sometimes if there is not enough
value in the assets it is not worthwhile for them to make you BR.

anotherdebtor

I had a horrible feeling that was the case.

The money advice worker seemed to be quite relaxed about it all, and suggested that as individually they were relatively small and unsecured then they would not take any action, in fact she was quite dismissive of it.

So far I haven't had any formal notification of court procedings or anything. So far the recovery companies are just sending letters demanding full payment in x days and threatening unspecified "further action". I'm just worried that it might all escalate massively very quickly.

dojoman

You will be surprised at how quickly these figures will rise, with the charges that will be applied to them, as you are not paying anything towards them.

anotherdebtor

Weirdly they seem to be going down, not by much, but in the case of the 4K one -£200 was shaved off it in between the letters.

I'm kindof hoping that they might dip below the £3K limit, but I think that might be wishful thinking.

midnight_express

Why aren't you working or claiming benefits ? What are you living on ?

ontrack

You must have some income?
In Scotland there is a scheme called DAS Debt Arrangement Scheme
this is a formal and binding arrangement which will stop your creditors and interest and make a schedule for payment.
this will not risk your house but you will need to be able to contribute to it
Trust deeds despite what a lot of the companies say will risk your house and give you significantly higher charges over three years.
Bankruptcy to be honest is not an option for you, you have too much in the way of assets to do this.
Look up the accountant in bankruptcy website and follow the links to DAS.
Whatever you do DO NOT sign up to any Trust deed or other commercial arrangement without clarifying the position regarding the house IN WRITING
You really need to sort this now before any further action is taken.
Good luck and if you need reccomendation regarding a company to use to help you you can PM me