Big CC/overdraft debt, unusual situation - need advice please

debtworrierafc82

Hi there. I'm realistic that my situation may mean that I can't be helped, but I'm trying to be honest and see if anyone can offer any advice, because I'm scared. My head has been in the sand for too long and I am at a point where I need to take action or get in a lot of trouble. I have credit card debts of approx £45000, and overdraft debts of £1250. I took payment holidays, but apart from that I have never missed a payment. I'm getting to a point where I can no longer keep covering this amount. The current amount per month I'm paying is approximately £1100, and includes interest. I have a low credit score, probably due to the high utilisation, and the high debt, but no CCJ, bankruptcy etc, but am unable to get a loan or any balance transfers. 

Now for the part of the problem that i'm not sure how to deal with. I don't live in the UK anymore; in fact I live outside of Europe (I am a British citizen). I have never told my debtors this as I have been paying my debts on time, so didn't see it as an issue. Now that I'm falling into trouble, I'm worried if I tell them I'm not in the country that they will close the accounts, demand the money back from me all in one go, or make things very hard for me. I'm wondering how they will respond as I did not tell them at the time. I'm also thinking about my future that one day I will be back in the UK, and don't want to have problems. I realise that this is my own doing, but I'm just wondering if anyone knows what will happen if I approach them about my issues, and the fact I am not currently a resident. Obviously I cant use any of the debt management help for this reason. I'm thinking if I am open with them about this, they'll just say if I can't pay then tough and I'll end up defaulting. But then I think surely they prefer to reason some money rather than none. As you can see I'm really confused about what to do.

Thanks in advance to everyone who reads this, and to anyone that can give me advice. If I had the money where I am now to keep covering it all I would, but this is not currently an option. 

fatbelly

To start with you need a new bank account that is not connected to your debts.

Now you have 46k of debt and can't afford to make the minimum payments.

So your options are:

1. Bankruptcy - possibly, depending on when you were last in the UK (You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years. )
2. Debt management plan - suggest Stepchange or Payplan. I don't see any problem in that
3. Nothing. 

What are you concerned about? You say 'scared' and 'get in a lot of trouble'. These are non-priority debts. Most of them won't take court action. Those that do would find it really hard to enforce anything. 

Six years after the default or insolvency you've got a clean credit file.

Of course you won't be getting credit for a bit so now's a chance to learn to live without it.

debtworrierafc82

fatbelly said:

To start with you need a new bank account that is not connected to your debts.

Now you have 46k of debt and can't afford to make the minimum payments.

So your options are:

1. Bankruptcy - possibly, depending on when you were last in the UK (You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years. )
2. Debt management plan - suggest Stepchange or Payplan. I don't see any problem in that
3. Nothing. 

What are you concerned about? You say 'scared' and 'get in a lot of trouble'. These are non-priority debts. Most of them won't take court action. Those that do would find it really hard to enforce anything. 

Six years after the default or insolvency you've got a clean credit file.

Of course you won't be getting credit for a bit so now's a chance to learn to live without it.

Thank you for the response.

In terms of a new bank account. Would I need one if i don't currently have an overdraft with my main one currently? It is tied to all of my direct debits though. Is that an issue if up til now I have had no issues?
1. I have been out of the country for over 3 years so I think thats out of the question.
2. Not sure they would help me as i'm not currently a UK resident. Am i wrong?
3. Doing nothing as in stopping all direct debits, not answering any contact, etc? I guess that's where my 'scared' response comes from. Also because my last point of address in the UK was my parents' I'm concerned they'll be bombarded with calls/letters/people turning up. Not worried about the not getting credit, I don't want it, just concerned about my parents being bothered, or having any issues when visiting the UK.
Thanks again

fatbelly

The bank account needs to be unrelated to your debts because of the right of set-off.

I see no reason why stepchange/payplan would refuse to work with you on location grounds, but you would need to have enough surplus income for a  viable plan.

There are standard letters that the creditors are required to send. Obviously they'll write to the address they have for you so if you don't want them going to a wrong address you give them your right address.

debtworrierafc82

fatbelly said:

The bank account needs to be unrelated to your debts because of the right of set-off.

I see no reason why stepchange/payplan would refuse to work with you on location grounds, but you would need to have enough surplus income for a  viable plan.

There are standard letters that the creditors are required to send. Obviously they'll write to the address they have for you so if you don't want them going to a wrong address you give them your right address.

There's no money in the bank account where the payments currently come out except what I transfer to it for the payments, so could I keep it if it has no overdraft?

I'm sure when i looked on stepchange I couldn't proceed because I was not located in the UK, but I'll check again.

When you say the letters going to the wrong address, I haven't told them I live outside of the UK, and I'm not sure I want to. As far as they're aware my parent's address is my current location. I'm not sure I want them to start sending letters to an international location, or to know where I am if I choose to do nothing.

My understanding is if I do nothing my accounts will default after a few months, and then potentially pass on to debt collectors, and it's at that point I worry they will hound my last location, ie my parents address, and it's that that worries me about choosing this path.

fatbelly

Well it's your choice.

Here's some info about set-off
https://www.moneysavingexpert.com/banking/setting-off/

debtworrierafc82

After reading that link I think i'm fine. I do not hold any credit cards where I bank, they are separate, and I only shift money to this account to cover the direct debit minimum payments which come out from here, so I believe I could keep this bank account if I were to do nothing (as said above it has no overdraft), right?

My current CC debts:
Lloyds Group - Halifax - £15,288, BOS - £4,650, MBNA - £7,825, Lloyds - £5,914 (Total = £33,677)
HSBC - £7,500
Tesco - £3,860
Fluid - £1,450

What are the chances with those kinds of numbers that they'll come after me if my accounts default? In my eyes it's really high. If they are passed to debt collectors can they turn up at my parent's house and legally demand anything if nothing there is in my name?

Thanks

longtimelurker2020

Something to consider: is it possible to open this new unrelated bank account, if you aren’t resident in the UK? Don’t they ask for proof of address e.g a recent utility bill with your name on it 

debtworrierafc82

longtimelurker2020 said:

Something to consider: is it possible to open this new unrelated bank account, if you aren’t resident in the UK? Don’t they ask for proof of address e.g a recent utility bill with your name on it 

I think you're right. I opened this account when I was in the UK 10 years ago. kept it without overdraft and without any connected credit cards. It only had the CC payments coming out from direct debit. There's no money that can be taken from there.

debtworrierafc82

Hi all, and thanks for all who have responded so far. I wanted to give a little update on my decision making (which is still unclear).

I'm in a situation where I have payments about to come out that I cannot cover. I haven't yet contacted my creditors because I'm not sure what to say. As i've said previously, I did not update my change of location with them up til now as I was keeping up with the payments.

A few questions I have...

a). If i can't cover the payments and expect to fall into arrears and eventually default, should I cancel the direct debits asap?

b). I'm not sure i want my creditors to know my current location. Is this a mistake? They have my last address (my parent's place), so I can still get the correspondence that I expect to receive, but if I did decide to contact them should I let them know I live outside of the UK  (and now outside of Europe) in your opinion. Would it make any difference to the situation other than they know where I am?

c). What are the chances of creditors issuing things like CCJ's for these kinds of unsecured CC debts (approx £46,000 as mentioned above)? I understand it's possible they will pass my debts to different companies after some time, but again i'm confused about how to deal with this all because I'm not in the UK and haven't notified any of them about this. 

Thanks, as you can se I'm still extremely confused about the situation.

Swoosh84

a) If you are going to default regardless then doing it earlier is going to be beneficial to you. Any defaults will stay on your report for 6 years from the date of default. It sounds like you are just delaying the inventible at this point.

b) You should get your new overseas address to each of these companies ASAP. It’s unlikely they will attempt to take this further since you are overseas as doing so is complex and costly. But more than this, if you default while still at your parent’s address, they will start to receive a lot of letters, potentially court papers and bailiffs. Updating your address should prevent this.

c) Its highly likely one or more of them will take you to court and obtain a CCJ eventually especially if you have a UK address. Its significantly more difficult and expensive for them if they know you are overseas.

Are you planning on returning to the UK in the future? Do you have any assets in the UK?

J