Massive CC debt / Cunning plan / Prison?

Nightwish_2

Hi Everyone.

I am a new user to this particular forum and was hoping that someone (anyone?!?) might be able to offer me some advise (be warned, this is a bit of a long one!)

Myself and my Girlfriend have been together for about 5 years (non home owners). In that time we have (somehow) managed to rack up an enormous amount of debt (virtually all in my name) Mainly on Credit cards. Yes, we were naïve and somewhat stupid.

To cut a long story short, we accumulated debt of over £50,000, had to move out of our flat and relocate, so that we could live with my GF’s mum. This was the only way we could continue to pay the minimum requirements to our creditors, and still afford to eat – my credit rating taking a thorough battering along the way too.

We have lived like paupers for the last 16 months and have managed to clear about £10,000 of this debt, but our lives have become miserable and it has put a huge strain on our relationship. We would need to live like this for another 3-5 years as we are before we are back on out feet. This is something we simply cannot contemplate. We literally have no lives.

Recently something has happened that could make a massive impact on out situation. This is a one off opportunity, and our heads are spinning deciding on the best course of action…

Basically, my GF has accepted a redundancy package from her current employer. The payment she will receive is equivalent to about 40% of the value of our remaining debt.

We could use it all, and pay off our main Credit Cards, hoping that my GF finds work soon, or we could be slightly more devious…. This is where I would really appreciate some advice…

We have one particular credit card with a Balance of well over £10,000 on it. We have been paying £300 in interest alone for well over a year now, and the balance has not fallen one little bit. I claimed my charges back in early 2007, but due to the charges received since, the debt has crept back up to the limit again. This is by far the biggest rock around our neck and is the debt we want to clear the most, as we have, basically been pouring money down a plug hole for what seems like an eternity.

We had the following plan…..I am unsure about the legal implications, whether it is fraudulent, and whether I am barking mad by even considering such action.

The plan was to inform the Credit card company that our relationship had broken down, and that because of this, I would not be able to continue making the minimum payments any longer, This would be quickly followed by a reduction of payments from over £300 per month to £10 per month (thus setting alarms bells ringing at their HQ) This notification would be accompanied by a breakdown of my personal incoming and outgoings (based on the debt in my name, and my wages only). This breakdown would show that the total outgoings were greater than that coming in, and would demonstrate that I could not conceivably continue to make payments at the same level as I had been for the past 18 months. I would also advise them that I was considering bankruptcy or an IVA due to my dire situation. I am also considering requesting a copy of the CCA to ensure that I have an enforceable agreement (basically, any added strings to my bow might help in the negotiation process)

I would then expect to be bombarded with letters threatening CCJ’s, DCA’s etc, etc…all of which I would ignore and continue to make the minimum payments. Just when things start to reach boiling point, I was planning to advise them that I had come into a small amount of money (say 50-60% of the value of their debt) and I would be willing to negotiate a settlement, my theory being that they would settle in full for that, rather that sell the debt on to a DCA for probably lesser of a percentage. That’s the theory anyway….

My concerns are that my plans may be riddled with holes… In particular the following…

1 – Is it fraudulent to lie to a creditor about your personal (relationship) situation?
2 – Can a Creditor or DCA legally force a non-marital partner to contribute to a debt?
3 – If the Company were to settle, could they monitor future activity on my credit file and come after me if they realise that I lied to them (i.e. – seeing that my GF’s details are still linked to mine in future credit activity)
4 – Is there anything I am completely overlooking that could be significant?

I understand that there are probably lots of you out there in dire situations who may see me as being lucky, and somewhat selfish by not wanting to just cough up the whole amount. I just need to stretch this money as far as I can, and I am loathed to give this particular company all their money on a plate. They have been evil to me in the past.

Any advice, thoughts, or stories of similar situations would be very much appreciated.

jonathon

this is just my opinion so i could be wrong
1, i would have said no as you are not married.
2, not if the debts are just in your name.
3, thay can only check your credit record with your permission but be careful where you get credit from in future.
4, i wouldnt mention comeing into money but you could still negotiate a settlement but thay dont offer that straight it could take some time the debt normally gets sold on a few times first.

im sure very soon you will get all the other people saying just pay the debt

CLAPTON

if the debts are in your name then your OH (whether married or not) is not responsible for them so there is no need to lie...

you can go bankrupt or maybe an IVA (you need to post a SOA to see whether this is feasible)

you could offer a Full and final settlement to each creditor i.e. offer a much lower figure to settle the debt if your OH is willing to fund this.
There is no problem saying someone else is funding it but you will probably have to stop paying for a few months before they agree. (you haven't come into any money have you?)

It will be marked on your credit record which will probably trash it for 6 years but is that a problem?

ahs1982

I only think it's fraud if you lie to them when you're applying to go bankrupt, because that involves a whole court process and they look into all the money you have or could get. I quite like your plan, good luck with it! Just take care that when you start telling fibs that you remember what you said!!!

johnllew

You owe the money; pay it back. I can't understand how people would encourage this deception.

Mr_LoL

johnllew wrote: »

You owe the money; pay it back. I can't understand how people would encourage this deception.

Nothing to stop the bank from saying "no we can't give you a credit card" is there?
Unless there have been fraudulent applications, the credit card companies should have seen they were going to be overstretched and refused further applications for credit.

Snooze

Nightwish wrote: »

Hi Everyone...........

Stop paying all your debts now and go bankrupt. Debt problem over. Commenceth new life. Don't feel bad about it. Banks & CC company's deserve everything they get.

Rob

Staciep88

I disagree - you shouldnt do that, telling the companies that your relationship has split wont make a bit of difference if your name is at the top of the paper! Didnt you feel good when you had cleared £10,000? I know I would, and I would set myself a challenge to pay a little bit more in the same amount of time. You say that you will be living a very basic life for 3-5 years - whats wrong with that? I dont think thats a very long time tbh and I think you will be incredibly happy with yourself in 3 years when you see that the balance is £0.00! Goodluck

Nightwish_2

jonathon wrote: »

this is just my opinion so i could be wrong
1, i would have said no as you are not married.
2, not if the debts are just in your name.
3, thay can only check your credit record with your permission but be careful where you get credit from in future.
4, i wouldnt mention comeing into money but you could still negotiate a settlement but thay dont offer that straight it could take some time the debt normally gets sold on a few times first.

im sure very soon you will get all the other people saying just pay the debt

Hi Jonathon,

Thanks for your comments. You've been very helpful.

Will keep you posted as to our progress (or lack of)

Nightwish_2

CLAPTON wrote: »

if the debts are in your name then your OH (whether married or not) is not responsible for them so there is no need to lie...

you can go bankrupt or maybe an IVA (you need to post a SOA to see whether this is feasible)

you could offer a Full and final settlement to each creditor i.e. offer a much lower figure to settle the debt if your OH is willing to fund this.
There is no problem saying someone else is funding it but you will probably have to stop paying for a few months before they agree. (you haven't come into any money have you?)

It will be marked on your credit record which will probably trash it for 6 years but is that a problem?

Hi, thanks for your comments.

I will rthionk about what you've said.

As for my credit rating..I amk assuming it is trashed as this perticular creditor gacve me a "partial default" ..whatever that means?!? I have requested a credit report which should hopefully arrive tomorrow. This will help me decide on how to play this going forward.

I am deffo gonna stop paying the full amount each month, or there is no reason for them to take me seriously.

Thanks again. will keep this thread updated.

Nightwish_2

ahs1982 wrote: »

I only think it's fraud if you lie to them when you're applying to go bankrupt, because that involves a whole court process and they look into all the money you have or could get. I quite like your plan, good luck with it! Just take care that when you start telling fibs that you remember what you said!!!

Thanks for your support