£5,000 threshold 24 January at 5:59PM in Bankruptcy & living with it 7 replies 420 views

Zcath

Hi - a bit of advice please. I was issued a stat demand a year ago for a personal debt. It was for 21k. I paid as much as I could and reduced it to around £4900. I recently lost my job and told them I couldn’t pay anymore and they told me they were going to issue me a bankruptcy petition. Can they do this? If the stat demand was for 21k or would the court throw it out. Thank you 

sammyjammy

If you are sure its now under £5k remaining then they cannot make you bankrupt. Would you be eligible for a DRO?

MalMonroe

Hi, I'd just like to say I'm sorry you lost your job but I think you've done brilliantly to reduce the original debt so much. If you had been left with a larger amount I may also be thinking of a DRO, as per sammyjammy above.

However, I've had a DRO and your credit is pretty much shot to pieces for six years and that seems a long time to be in what I called at the time 'credit failure' for a relatively low sum of £4900.

What I would do in your position is contact one of the free debt help agencies to ask for advice. They may even be able to help you to arrange for some breathing space by halting any action by your creditors for a short period of time. With their help, it is possible.

StepChange   https://www.stepchange.org/

National Debtline   https://www.nationaldebtline.org/   

Citizens Advice   https://www.citizensadvice.org.uk/

Someone at one of those agencies will be able to advise you and help you with your problems. I can assure you of that from personal experience, StepChange really saved me. Their help is free and non-judgemental.

And if you saw Martin Lewis' programme last week you will know that you are not alone. Please try not to feel too despondent, you've done a great job so far and just need some support, you're not alone because many of us here have also needed such support.

I do hope that this helps in some way. I've been in debt - more than you - and StepChange helped me at at time when I felt there was no help available. It was the best phone call I've ever made and, of course, it was free.

All the very best to you.

sourcrates

Firstly who are "they" ?

Creditors always try to up the ante by threatening bankruptcy, in reality, if they did, on most occasions, they would get nothing out of it, they would have to fork out the bankruptcy fees, for an individual its £680, and if they do it through the courts, it will cost them a lot more, I think they are talking out of their backsides to be honest, it would cost them money, and if you have no assets and a low income, they get nothing, now that doesn't make any sense does it.

Also, as mentioned above, they can`t make you bankrupt unless the debt total 5k or more.

What are your circumstances, do you have any assets, such as a house ?

Zcath

Thank you so much for all of your comments. The creditor is a personal contact - we used to work together and they loaned me some money but then they fired me and sent me a statutory demand - I paid as much as possible but then stopped last month as couldn’t afford it. His solicitor sent a letter last week saying
”the balance claimed by the statutory demand is now £4874 for which my client is entitled to petition, with a view to obtaining judgment and enforcing it in the usual way now or in the future… substantial costs will also be added to the bill…

but what you are saying is that they are lying and can’t actually do this? It’s all very worrying. I have no assets anyway so they couldn’t take anything 

fatbelly

Not only below the 5k threshold. Also out of time.

https://www.gov.uk/statutory-demands/how-to-serve-a-statutory-demand

They would have to serve another stat demand - which they can't do as you don't owe them 5k.

Stat demands are really only a threat if you are a homeowner. If, as you say, you have no assets then petitioning for your bankruptcy is a waste of their time and money anyway. I think it costs them around 2k.

TripleH

Keep the letter as well. It shows you owe less than £5K. They may try pulling a fast one by adding on fees to take it over that threshold. You can show that they confirmed it less than that.

sourcrates

Reading what you have written suggests what they are threatening is action through the courts to obtain a CCJ, which they would look to enforce by one of the available methods, which would not involve bankruptcy.

For example they could engage a bailiff to call on you, but just keep the door locked, and there`s very little they can do, that would be about the only shot in their sling to be honest given your circumstances.