Absolute blind panic - advice needed!


I had a call at work from my wife today telling me that she'd received a letter from a debt collection agency for a sum of money in excess of £1,000. The debt is owed to a credit card company.

Here's the situation. My wife obviously took this card out some years ago and spent the money. However, at the time she was (and still is) suffering from a mental illness that required two involuntary sections under the Mental Health Act (both for durations of around 6 months) followed by a voluntary admittion some time after that. My wife must have taken the card out under her own name whilst we were separated. She must have taken the card out around 3 years ago.

We decided to get back together again around 1 year ago (my wife was discharged from hospital in January 2004) and, given our improved relations, I was fortunate enough to be able to buy a share of a house from a housing association. Now, bearing in mind my wife's illness I made sure that the mortgage I took out on the house was in my name only. I also asked the housing association to issue the deed in my name only.

So, on to the questions. Where do I stand in all this? The letter says that they will be sending someone round after 7 days to issue a Statutory Demand under the Insolvency Act. Does this company have any claim to the house (if its in my name), my wages or possesions, or would my wife be the only liable person here?

Should my wife declare herself bankrupt? It says on the letter that they are unaware of any valid reason why they cannot pay the debt. Is being in possession of a credit card when mentally ill and in hospital classed as a valid reason? Is she liable for the debt and if so, does she have the right to pay it back in chunks? She doesn't work.

Also, the last thing I need is for a debt collector to be harrassing my wife when I'm at work. The last thing I need is for her to go into remission.

Where do I stand in all this?

Thanks for anyone who can shed some light on this.


  • GingeG
    GingeG Posts: 202 Forumite

    Go tomorrow and see the Citizens Advice. They have lots of experience in this stuff, bankruptcy should not be considered as an easy way out there are other things open to you.

    Go see the CAB tomorrow no delay!!
  • Malestrom
    Malestrom Posts: 983 Forumite
    Are you in a position to repay the money owed? Could you manage to repay a set amount every month? Remember, bankruptcy will still cost you in the region of £350-£400 payable in one go, possibly more depending on what state benefits your wife is claiming (Income Support, etc). I wouldn't recommend bankruptcy in your situation as the amount of debt doesn't really justify it IMO.
    He huihuinga taangata he pukenga whakaaro – A meeting of people; a wellspring of ideas (Maori proverb)
  • bonnie_2
    bonnie_2 Posts: 1,463 Forumite
    i believe you can only go bankrupt for more than 5,ooo.isnt there a law about mentally ill patients getting credit in the watchdog programe they wrote the mans debts off i would contact the bank i have heard of people in your situation getting debt written of the other place to try is mind who help in these situations they are a mental health charity.
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
    First Post First Anniversary Combo Breaker
    I simply echo the first poster. Go and see Citizens Advice or Consumer Credit Counselling service asap and sort through this with people who can manage your case and give you one on one help. Worth doing today (or call national debtline too for even quicker helP). The links are at the top of this (and every page in this board)

    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • Murtle
    Murtle Posts: 4,154 Forumite
    First Post First Anniversary Combo Breaker
    Firstly don't panic - easier said then done, but don't!!

    If the debt is in your wife's name, then she is liable for it not you.

    It is highly unlikely that they would take your house for £1000.

    Contact CAB etc as previously mentioned as they will be able to help with the mental health aspect of this. Ted_hutchinson one of the other posters may also be able to help, as he appears to have a huge knowledge of these areas.

    It is also unlikely that they would force the repayment in one go, if this was not viable.

    Don't panic, but get good, sound, free advice

    All the best

    x x
  • jen_jen_2
    jen_jen_2 Posts: 1,032 Forumite
    re the statutory demand and bankruptcy, your wife can only be made bankrupt for debt of more than £750

    the creditors have no say on your wages, home or other assests.

    if you wife was ill when she took out the card she may be considered not "capable" of entering into a contract and yes the creditors should consider a write off, your wife will need to supply medical evidence of her health then and now.

    go and get advice, see the CAB or national debtline. If you cant get any advice quickly, write to the creditor (phone if you are up to it) and explain that your wife is ill and you will be in touch once you get advice. If you write get your wife to sign a short letter explaining that they can discuss her debt with you.

    If they continue to phone you or your wife remind them that the OFT have guidelines on how they should treat people with understanding.
    Ready to Go Go!
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