Crippling Debt

LadyNix

Hi I am new here new to forums all round in fact. I am a single parent, no assets, rented accommodation. I have 7 creditors with a sum total of £54,500. I have been unable to pay towards my debts since March 2020. I started a higher paid job last month which will leave me with £200 month disposable income. Two weeks later I was served notice on my rented accommodation due to the landlord selling up. I suffer with mental health issues since 2016. My debt has became a pressing issue since the breakdown of my relationship of 17 years in Jan 2020.

6 of my debts have defaulted with 4 of passed to debt collection agencies. Of these 4 two credit card debts have been sold £14,500 to Link Financial and £7,500 to Arrow Build. 

I have a £24,000 unsecured personal loan with M&S Bank that is still being handled in-house. A relative recently offered to gift me £11,000 if my creditors will all agree to partial settlement/full and final offer. 

I wrote to all concerned outlining my situation offering 20% on a pro-rata basis. I am elated to say that M&S have accepted my offer as partial settlement. Link Financial rejected coming back with a counter offer of £11,500 which works out as 80% - I have explained this is not possible. Shall I tell them about m&s accepting my offer or not? 

My circumstances are extremely unlikely to improve if anything they've got a real high chance of deteriorating as I have took on a job that requires me to be highly self motivated completely focused self driven and committment which I am already finding nigh on impossible with all that is going on. I feel defeated, my mental health is rapidly getting worse and considering whether I should just give up on my role before I let myself down.

[Deleted User]

Speak to someone like step change who will advise you of all of the best options for you and your circumstances

fatbelly

The most important things are your mental health and your accommodation. I would wait until both of those are stable before addressing the debts. All the ons you mention are non-priority

I think offering 11k of someone else's money against  54k of debt is a bit ambitious and my first question would be - 

as you appear to have no assets, in rented accommodation and 54k of debt why are you not going bankrupt?

hrsnd4

Assuming bankruptcy is not on the agenda, a good starting point would be to agree nominal payments to creditors and then as and when you can come to an agreed settlement pay them. I wouldn’t get overly worried about clearing everything in one go. Link can be a pain I eventually settled with them but they wanted the highest % of all those I have repaid. Arrow on the other hand were agreeable to a much lower %

sourcrates

I`m with fatbelly on this, let the relative keep their money, you appear to be a prime candidate for bankruptcy.

Link and Arrow Global don`t have the best record at agreeing settlement deals unfortunately.

I would recommend talking to one of the free debt charities, but I can almost guarantee they will offer exactly the same advice as we have.

funny_bunny

Excellent advice by fatbelly and sourcrates. You can speak to your local CAB or chat online with national debtline if you feel comfortable that way.

Maybe you could save your relative's offer for a rainy day and settle the debt through bankruptcy if you decide to do that.

At least that way you will not have to deal with DCA/creditors anymore, have a fresh start and focus on your priorities - mental health, accommodation, family, work etc.