Stopping payments to creditors

Bald_Runner

Hi Again,
I keep thinking of more questions. Didn't sleep last night because my head was full of them. Before Christmas I had a 'phone conversation with a 'financial adviser' (recommended by my employers) who advised me that we have two options; IVA or BR but he was leaning toward IVA (quoting fees of £8000). Owing to our circs, I feel BR is the better option. However, I have an appointment with the CAB 4th Feb as they are independent - I'm not sure the other chap is. Providing that they agree that BR is the best option, I will need to get the fees together (2 * £485). It has been mentioned previously that 'you just don't pay anybody for a month or so' to get the fees. How exactly do i do that? Do I cancel my direct debits? (can't cancel everything; my own bank is one of my creditors). Do i write to them to tell them i will not be paying them? When shall I do it? Shall I wait until after the CAB interview or do it now? Even if the CAB recommend IVA, will it make any difference if I've missed the payments under these circs? My wife has long term mental health problems and sho would struggle to cope with 'nasty' phone calls so that is a concern. What would I tell anybody who rang up?

Thanks again for all of your helpful comments so far

BR

tight_jock

once you have had your meeting with CAB and made your decision you can take action.

If you are advised to go BR then stop paying any of your card or loan debts but try and keep up to date on your utilities if you can.

As for your bank being a creditor that makes no difference. Just cancel the appropriate DD. By the time anyone gets round to taking any action( apart from phone calls which can be stopped) you will have done the deed and can get on with your life.
Good luck and kep asking away if you need any other pointers.

fiveyearplan

Whatever you do, don't go with the financial advisor who is going to charge you! Keep your appt with CAB today. You need to speak to one of their special debt advisors. You should open another bank account - Barclays or Coop if you are thinking of bankruptcy. Look at one of the stickies on this board for 'bank accounts for BR'. You won't be able to cancel the DD to your bank but you can cancel all the others. It will be several months (although you will receive phone calls and letters) before it gets 'nasty'. You can write to all your creditors and tell them to correspond in writing only but don't know how effective this is. You can also ring CCCS today and see what they say. You can find their signature in many people's posts on this site.

WHy don't you post your SOA - its not that difficult just start with who you owe money to and how much and we can take it from there. I'm sure you will feel better about your situation once you know what your options are. Keep posting on this thread.

rog2

Hi BR, and welcome to 'Bankruptcy and Living with it'.

The 'Financial Adviser' certainly does not sound 'independent'. IVAs are an 'alternative' to Bankruptcy, and, providing you meet the criteria, can be used to 'protect your personal assetts. However, they are treated as 'insolvency' in a similar way to bankruptcy, i.e. your name will be published on Insolvency Website and you will have similar restrictions to credit. The normal 'term' for an IVA is five years and an IVA must be managed by a registered 'Insolvency Practitioner' who will 'take' his fee out of your payments, before distributing the remainder to your creditors. Because of this, the 'IVA Industry' has attracted many, shall we say 'ambulance chasers' who see your financial situation as a 'nice little earner'. Should an IVA 'fail' the next, almost inevitable, stage is usually bankruptcy, which rarely affects the 'IVA Administrators' as they will already have 'earnt' their fees out of the payments that you will have made up to the point of failure.
That is not to say that the 'Adviser' that you saw is anything but reputable. However, by the very nature of his title, he is most unlikely to earn anything out of your situation by reccomending bankruptcy, so you are absolutely right to seek an opinion from CAB - they are a charitable organisation and will give you free, professional and impartial advice.
If their advice is that bankruptcy is, indeed, your best option, then you should stop paying all of your creditors, with the exception of Council Tax and Utilities, immediately and use the money for your court fees.
To stop paying some, whilst continuing to pay others, could be seen, by the OR, as 'favouring' certain creditors.
Good luck with your CAB interview - let us know what they reccomend.

fiveyearplan

Yes, as TJ rightly suggested, keep up payments of your priority debts. THese include utilities, rent or mortgage, council tax and phone etc.

betterlatethannever

Hi Bald Runner.
I understand your worries. Most people on here have got the money together by stopping paying creditors. I'm afraid nasty phone calls are all part of it though you can take steps now to help you. Can you change your phone number? Have you an answering machine that you can monitor and keep on low volume?
It sounds like your going to be going br sooner rather than later and it takes time for the phone calls to start. You get one or two at first then after a few months they don't stop!!
There is a template letter you can send to creditors that should stop the phone calls, or, if they do ring you have the right to ask them only to contact you via post.
Only stop the no-essential payments.
Have you tried calling the CCCS or national debtline? they would give you advice, probably quicker than the CAB. If you go for BR the judge will want to know you've taken expert advice.
If the 'expert' you saw was quoting fees then he's not independent, avoid!
If you are recommended for an IVA i don't believe missing payments will matter.
I really would change your phone number now and tell no one except your friends and family.
Hope that helps a little, and try to get some sleep (easier said than done, i know)
The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111
National Debtline - Tel: 0808 808 4000
Payplan - Tel: 0800 917 7823.
Good luck

Richard_S

Hi Bald Runner,

The suggestions you've had so far are spot on and the only thing I can add is that if your current bank is a creditor, and you stop paying a loan or credit card within that group, then they have a nasty habit of taking the money from your current account, usually just after you've been paid.

Open a new bank account and have your salary paid into there; that way you keep control of your finances. Having to set up new direct debits is a pain but well worth the inconvenience.

Regards

Richard

Bald_Runner

Thank you all for these replies. I have this morning spoken to National Debtline (for 48 minutes!). Their advice was very good. They even told me that my wife's DLA will not be taken into account when working out my surplus income. That was good news. They advised about letters that I can send to Creditors available on their website. I don't think i need go to CAB after all

BR

tigerfeet2006

National Debtline are indeed excellent and their website has lots of useful stuff on.

Well that's step one over with, now onwards and upwards.

rog2

Bald_Runner wrote: »

Thank you all for these replies. I have this morning spoken to National Debtline (for 48 minutes!). Their advice was very good. They even told me that my wife's DLA will not be taken into account when working out my surplus income. That was good news. They advised about letters that I can send to Creditors available on their website. I don't think i need go to CAB after all

BR

Well done BR. NDL are, indeed, very good.

dalip

hi
I stoped paying my creditors in oct when i was trying to do an IVA and the phone calls where the thing that worried me most. I am happy to say that the IVA was not poss so went BR in nov. Even to this day i have had nothing but nice,curtious people asking why i missed payments. When i first explained i was trying to do an IVA they all said ok, we will make a note of it and hold all calls for 28 days,which they did. Now more or less all calls have stopped(never that many anyway even though i had 18 creditors!)so it may not be as bad as you imagine. Good luck. Dal