Worst case

Cambbb

Hi all I’ve got myself into a bit of debt now everything was ok, paying everything off no probs then covid came along and I was taking off my shifts which meant I’m down £650+ per month. Everything is an extreme struggle now. Not just that my wife will be giving birth soon and she will be on maternity leave but will only get 6 weeks pay from it so her bills will fall onto me which would have been fine if my wages didn’t get dramatically reduced. 

I’ve got debt with around 4 different companies, what would happen if I just stopped paying? I know I’d get harassed, not be able to take any credit out etc but will my house be put at risk? I’ve read they can make you bankrupt and force sale on your house if you have equity is this true?  (I’ve already thought about remortgaging but was told I have too much debt and don’t earn enough now). I know people on here look down on others who don’t pay their debt and I’ve never been in any sort of financial trouble before but to be honest it’s got a bit too much now to handle. 

EssexHebridean

Stop, take a breath. Assuming the debt is unsecured then the answer to what would happen is initially, very little. Nobody is going to make you bankrupt. 

First thing to do is to put together a Statement of affairs (SOA) - you’ll find links for the calculators either in my signature or in one of the sticky threads at the top of the board. Get that filled out, hit the format for MSE option, then post it in here and let’s see how things are. I assume that your wife will get SMP once her pay from her company runs out, so there will be some income there at least. 

Definitely don’t look at any further borrowing to try to “fix” things though and certainly not through remortgaging - all that does is turn relatively harmless unsecured debt into thr sort of debt that really would potentially mean you’re risking your home.

Nobody on here will look down on you either - helping folk who’ve found themselves in the position you have is what we’re here for! 

Cambbb

Yeah after the 6 weeks she’d get roughly £150 per week. Our outgoings reflected my wage still had plenty to live off after stuff was paid. Now with this new wage and her £150 (6 weeks after baby is born) it’s a struggle. I’ve done a lot of reading and I read that if 2 companies merged to make the debt over 10k (I’m in Scotland) that they can bankrupt you. There is a lot of different information flying around I really didn’t know which was true. I’ll have a look at this SOA just now. 

EssexHebridean

Being in debt can be a bit like thinking you might be ill - never google too much or before you know where you are you'll think you might be dead, instead! Take things one step at a time - it sounds like you're seeking help and advice at the right time too which is a really good start. 

sourcrates

There are lots of things creditors could do, I could win the lotto, but its doubtful.

You are way overthinking this my friend, its individual debts that count, and in Scotland the limit for sequestration is £3000.

In practice, non of that is going to happen, unless you owe a substantial amount of money, and even then the process can be challenged at every stage.

Every unsecured creditor uses virtually the same collections process, non payment will result in calls and letters, this may go on for a few months, your account will then be passed to their internal collections dept. who will attempt contact again, by phone and post, this may last some time, anywhere up to 6 months.

If you still fail to make contact, your account may then, either, be sold, or, passed to a debt collector.

Both options will result in the same flow of phone calls, and a series of collection template letters, and this can last for a few years in some cases, then legal action becomes a possibility, so you see nothing happens quickly.

In your situation, you are probably best writing to your creditors and explaining your situation, you can also take advice from one of the free debt charities in my signature.

National Debtline (Scotland) may be better for you, as the laws and debt solutions are different North of the border.

TripleH

If your debtors make you bankrupt there is a good chance they will get nothing.

If you are having difficulty, it makes more sense to them to come up with a repayment plan with you.

I agree with Sourcrates that writing to your debtors and keeping them informed, even if you aren't able to pay anything is the best option.

I have worked in credit control and know that from the other side, knowing nothing is not ideal, but if the creditor knows they will get their money in time they tend to focus more of their efforts on unknown accounts.