!!!!!!

strawberryblonde

Hi All
My hubby and I have debts totalling £60500 and are in a DMP paying them off at £120 per month. Realistically we will never clear them as at this rate it will take approx 43 years.
Our debts are
Mortgage Shortfall Enact £28500
Personal Loan PRA TSB £12800
Personal Loan Santander £8000
Credit Card Marks and Spencer £5700
Overdraft Wescot £4600
Personal Loan Santander £566
Credit Card PRA £365

We applied for an IVA December last year but this was rejected by our largest creditor Enact who we owe £28500 as a mortgage shortfall as they believed they would get more money from us via a DMP. This was a mistake on their part as we also have a debt with HMRC for tax credits which we are repaying at £60 per month. This debt was going to be included in the IVA and would have meant they would receive a higher payment than they do on the DMP but as a tax credit overpayment can't be included in a DMP, the payments have remained the same.
Following the recent budget announcement, we will now be losing our subsidised rent and I estimate that this will cost us approx an extra £150 per month.
A relative has offered to lend us £10000 to settle our debts. If we are unable to do this, then we will have no choice but to go bankrupt. Neither of us wishes to do this for a variety of reasons. I am hoping that we can persuade our creditors to see that taking approx 18-20% of the debt we owe upfront now is preferable to us becoming bankrupt. We have no assets other than 2 cars which are worth less than £2000 and which we both need for work purposes.
Before we speak to our creditors, does anyone have any advice for things that we should do first? Reading through other posts I see reference to CCA but am not sure what this means. Any help would be gratefully received.
Sorry for the long post!

sourcrates

Hi,
Well a CCA request is a request for a copy of the original credit agreement, dependant on when the account was opened, and how, failure to provide one may mean a creditor cant obtain judgement against you in court, but I think that would be clutching at straws in your case.


What reasons have you for not declaring Bankruptcy ?


Your debts, as you say, would never be re-paid using your present method, and i think the only way your creditors would all settle for 10k is if none of them could produce the CCA.


However, this would not wipe out the debts, it only means they couldn't get judgement in court against you, they can still harass you, call, write etc etc, its not a solution to be relied upon.

fatbelly

The danger is that your F&F strategy only works with one or two creditors, you still are left with unmanageable debts and look at bankruptcy again. But now you have treated one or two creditors preferentially and haven't really gained anything from use of a third party's money.

I'm not sure why you were happy to declare insolvency via an IVA but reluctant to do so via bankruptcy. The cars?

It may be better to bite the bullet and go straight for bankruptcy now. The cars can be argued as essential. In the worst case your relative could help you to buy them back from the OR, and they could also help with the £705 x 2 fees.

Edit: can I also point out that the overdraft, shortfall and tax credit overpayment are not CCA debts

Time_to_face_the_music

https://forums.moneysavingexpert.com/discussion/comment/67258381#Comment_67258381

You asked this question late last year but am not sure if you went on to CCA any of your debts.

Who is your DMP with? Unless you have the opportunity of increasing your payments over the next few years, this is really not a viable solution to your debt.

I agree that bankruptcy is the best route but assume you may not want to follow this as you hope you may be able to purchase your house back from housing association

https://forums.moneysavingexpert.com/discussion/comment/68723830#Comment_68723830

I honestly think a brand new fresh start could be your best solution.

TTFTM x

strawberryblonde

Hi All
Thanks for your replies. We don't want to go bankrupt for a few reasons-yes we would like to be able to buy back our house in the future but also bankruptcy is so restirctive for 3 years. They don't leave you any money to live off and we have so many things in the house that need repairing, we need to have dental work done etc etc. My husband would lose all of his commission whereas in an IVA we would have got to keep half. Several of our creditors ironically voted to accept the IVa at a return of just 12% and this is what has given me hope that we could negotiate with them .

sourcrates

You could try calling there bluff, make the offers to them, before you obtain the money, make it clear the only alternative to this would be Bankruptcy, see how they respond to that.


If they reject your offer, then only you know your next move.

TakeAwayKing_2

Why did they vote ironically?

sourcrates

TakeAwayKing wrote: »

Why did they vote ironically?

If the IVA had gone ahead, the creditors would of realised only 12% of the outstanding debt, yet if the OP made full and final offers to them of 12%, its likely they would be rejected, hence the irony !!!