£130K in debt: advice needed

Weybridge78

Thanks all for the advice so far. In terms of full & final settlement offers, if my family member was to come into some money, would it be best to start off with the lowest or highest creditors?

andyfromotley

I am no expert in f&f but my observations are that it may be a little soon for them to be considering decent offers yet. The best results seem to come when the debts end up old and smelly with some DCA who bought it for tuppence. As i say you may be a bit too soon in the process for that.

Other than that ring them all and ask them, Remeber its a negotiation so expect a bit of too and fro. Then simply sit down and look at how you can pay the maximum amount of debt off for the lowest cost. Oldest, biggest etc doesnt matter at all, this is a mathmatics exercise.

cms-help

Weybridge78 wrote: »

Thanks all for the advice so far. In terms of full & final settlement offers, if my family member was to come into some money, would it be best to start off with the lowest or highest creditors?

That contradicts your first post where you said the situation wouldn't be changing any time soon.

nkkingston

Start with priority debts, like HMRC. Then high interest debts. Then low interests. Stoozing's Snowball calculator is good for this (and good for working out what to throw money at next once the HMRC debt is gone).

In reality, your family member needs to decide whether they want to live very frugally (no holidays abroad, no sky tv, no takeaways, no redecorating, no new clothes...) for at least 18 years, assuming no emergencies like a bad boiler come up in that time, or sell the house and use some of that money to make a real dent on their debts. Bankruptcy's not really an option while they own the house (except in very specific circumstances).

Weybridge78

cms-help wrote: »

That contradicts your first post where you said the situation wouldn't be changing any time soon.

No I haven't. In my first post I said "I don't see the situation improving any time soon in order for all the debt to be cleared in a reasonable amount of time". Just because I ask what to do in a situation if my family member comes into money is not a contradiction of the first part in the slightest. Hence why I put the word "if" in bold letters and underlined it.

Once again, thanks to all for advice. I will let them know it is too early for F&F offers and will pass on the other information that has been provided.

Weybridge78

Update:

Capital One and Lloyds came back with the CCA.
PRA Group said they would contact MBNA for the CCA and stop collections activity during this time.
Westcot said that they just manage the debt so to contact MINT and NatWest for the CCA.

However Santander sent a letter which has come through today: "We are unable to provide a copy of your clients Credit Agreement and a copy of the Terms & Conditions for this account. Please find enclosed a Statement of Account."

Weybridge78

Update:

1. M&S and JLP came back with the CCAs. Accounts date from 1998 and 2006, respectively.

2. PRA Group sent a letter with a copy of MBNA statements from February 2015 to October 2015. In their letter they say that this is the information they have received from MBNA so far and they are waiting for the rest. They go on to confirm that PRA Group will not be contacting my relative until they receive all the information from MBNA. Not sure what this means with regards to £1/month payment?

3. Both Barclaycard accounts are being "transferred" to Asset Link Capital.

4. Following the same advice from both StepChange and National Debtline, a letter has been sent to Santander Complaints asking them to confirm that as a result of the inability to provide the credit card agreement, the debt will be written off and not sold to a third party.

pennystretcher

I don't have enough knowledge on debt legalities over time, however, I'd suggest you keep in regular touch with Stepchange as they will be able to advise you on these.

I'm sure you will have been all over google for this (e.g. http://taxaid.org.uk/guides/taxpayers/tax-debt/time)
so I think your relative is right tackling the debt to HMRC in the first instance.

If the income is irregular, try to work out the average over the past year or two and submit SOA based on that. It will give an indication where the money is going.

£130k may seem huge, however, broken down and tackled in right order it is manageable, although I would question why bankcruptcy is not an option? How much of the mortgage is still outstanding, what is the LTV and what is the length of deal with that? Are you sure you got the best deal for it?

Does your relative have a spare bedroom they could let out? Or could they find any other alternative income streams?

Sorry, finding it difficult to get my head around this without more information...

fatbelly

You seem to have organised this really well. The priority debt gets the surplus income of around £600 per month. The rest get a token offer and a cca request!

As long as the non-priorities prove enforceable they get a pro-rata share of the surplus when the priority debt is paid off.

As someone else calculated the dfd as 18 years, I won't re-do that calculation.

An IVA would see the debt cleared in 5 or six years so if I were you I'd be looking into that

Edit: bankruptcy could be an option if your crystal ball shows you that there would be no equity in the house in 3 years time.

patman99

So, to update, the creditors with proveable debts are (currently) -
Capital One
Lloyds
M&S
JLP

Give it a couple of months, then send the cca letters for the Barclays debt to Asset Link Capital to see if they have got all the correct paperwork.

Every debt that can be declared 'uncollectable' is a debt less to pay and a weight off the mind.