Token Payments or bankruptcy?

[Arjessa]

If my Creditors agree (I'm informed that they have to agree) to a one pound per month payment as my income is equal or less than my outgoings, how long does this have to go on for? If my income remains the same for some years, would this eventually be 'written off' or would i be expected to pay these guys a pound a month until I die?! This seems my only option other than bankruptcy, and then I am told we would lose the house. Any clues? Thanks everyone! :|

 

[Alan R Price]

Hi

Sorry to her about your problems. Rather than getting piecemeal advice here, I suggest you check out the following websites: National Debtline, which is a free, charity-run site with lots of practical advice, specimen letters etc; and the Insolvency Service, which is the government office dealing with bankruptcy - there are useful guides published on the site, including "Guide to Bankrupty" and "What will happen to my Home?"

Once you have read those, if you need further clarification you can ring National Debtline or come back here.

 

[Arjessa]

Thanks for that, but have already gone through all those web sites and rang also. More confused than ever now! Was told that Creditors could not 'not' accept the one pound offer per month, but have had one do so this morning and are now passing it on to a Debt Collection Agency. Where does the Law stand with all this I wonder? :|

 

[guest_12]

Creditors only accept token payments of £1 if you can show than in a couple of months you will be earning more money or spending less which means you can start paying back the full amount again.

They wont accept token payments forever only for a couple of months.

If you cant afford to pay the debts then look at an IVA (they will talk to them and work up a deal) or BR (which is only for 12 months then you are free to start again)

 

[Mitch3473]

Went through something similar a few years back when I had a debt collector after me.Basically the RBS started flapping during the 'crisis' and called all their debts in on some properties I had.I paid the debt collector £1.00 per month per property by postal order,any other method was not acceptable.6 months later the properties sold and I negotiated with the debt collectors at 50% of the debt.I was happy, the DCs were happy and the RBS were down on the deal. If they'd have stuck by our original agreement they'd have got the full amount.................

 

[Alan R Price]

Thanks for that, but have already gone through all those web sites and rang also. More confused than ever now! Was told that Creditors could not 'not' accept the one pound offer per month, but have had one do so this morning and are now passing it on to a Debt Collection Agency. Where does the Law stand with all this I wonder? :|

As the law stands, you owe the money and if you don't pay your creditors they can make you bankrupt. Alternatively, you could look at an IVA (individual voluntary arrangement) which is a formal scheme under the Insolvency Act that acts as an alternative to bankruptcy. No creditor can be forced to accept nominal payments.

Do you have equity in your house? If not, bankruptcy might be best for you anyway. If you do, then an IVA is possibly appropriate.