Bankruptcy and Debt..............

TRNCVaughan


Joined: 27/04/2008
Posts: 4578

Message Posted:
12/02/2011 06:52

My sister in the UK has got financial troubles and has been told an IVA is the best way to sort this out. Is this good advice or is there a better way? Is there anybody out there in UK or TRNC who can help her?

simbas



Joined: 16/07/2007
Posts: 5943

Message Posted:
12/02/2011 07:08

It seems the bigger the debt the more help you get over here , a friends son was in debt of £30,000 + advised by a debt advisor to file for Bankruptcy . All debts cleared , couldn't get a credit card or morgage for a period of time . I think it was about a year , but can't swear to it , but now has credit cards etc . The smaller the debt , your'e on your own !! I will ask my friend the number of the advisor they used if you want . A bit early yet though

Simbas

nostradamus


Joined: 15/04/2008
Posts: 557

Message Posted:
12/02/2011 07:23

It would be best if your sister contacted her local Citizens Advice Bureau as they deal with financial problems and will be able to give her advice on what the best/most cost effective way forward is for her circumstances. The CAB draw on local professional services for their advice. For instance, friends of mine, who have an accountancy practice, give a certain amount of time to their local branch free every month. She will need to call them and make an appointment though.

mmmmmm



Joined: 19/12/2008
Posts: 8398

Message Posted:
12/02/2011 08:57

Hi 'TRNC' Vaughan



Your sisters circumstances are the key..



No-one can give advice without knowing all her circumstances..



IF she goes bankrupt the 'slate is wiped clean' - but if she has equity in a house - even if shared - it must be realised.. The t'other person(s) who has equity in it will find the Trustee in Bankruptcy sits in her shoes and can force the sale of the property to realise that equity.. they can wait until house prices go up... or an offer can be made to buy 'em out.



B/ruptcy will show for (six ?) years on any Credit report



Whatever route she takes she shouldn't PAY for advice.. there are places to go - like the CAB - and helpful websites..The one below is a charity and mentioned on the DirectGov website.



http://www.debtadvicefoundation.org/

Harold2555



Joined: 19/04/2008
Posts: 1139

Message Posted:
12/02/2011 09:25

Vaughan



The problem is that there are debt advice companies that encourage people to go for an IVA because they earn money that way when Bankruptcy may be the better option, All sorts of factors come into the equation including as Mark mentions the asset situation but also who the debts are owed to as some will oppose an IVA as a default position.



I have some professional experience in this area and thouroughly endorse the advice to go to the free debt councillors, they have no Axe to grind.





Harold

dalartokat


Joined: 14/04/2008
Posts: 734

Message Posted:
12/02/2011 09:26

Simbas is correct there is a government scheme for people with debt which wipes it out and you pay x amount back, cards are taken away etc. Iv'e known 2 people so far use this scheme to wipe amounts of £45,000 and £15,000. Both were/still working. CAB are very busy over here and it needs an appointment with them.

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
12/02/2011 09:49

Vaughan Msg 1 -

1] CAB

2] Start to make her own plan as to how to get out of it

3] She needs to talk to friends family etc

Not to borrow but for sympathy and so that they do not embarass her into spending what she has not got.

4] After consulting with the CAB talk to all who she owes money to - preferably with some outside (friends, not paid) help. Tell them her predicament if there are good reasons tell them and if it is not her fault tell them as well. Most important then ask for them to put interest on hold and start to repay them on a plan that they can all see is fair.



Horrible situation to be in and honesty pays as much as anything because she will feel better not hiding her problems away. When those things are happening if you can afford to give her a "loan" and only then do so. Do not expect it back but be glad if you see some of it in the future

Woodspeckie


Joined: 25/01/2009
Posts: 2263

Message Posted:
12/02/2011 12:15

Your Sister needs to go to her nearest Citizens Advice, today the newspapers report that the government has pledged £27 million to Citizens advice and other independent debt advisers to offer a free face to face service. A record 135,000 people were declared insolvent last yeaar and that figure is expected to rise.

mmmmmm



Joined: 19/12/2008
Posts: 8398

Message Posted:
12/02/2011 12:35

Dear Dalartokat



re msg 6





The ONLY 'govt scheme' to 'wipe out debt' is Bankruptcy .... other schemes are govt approved measures to come to an arrangement with creditors - you have to to pay back an agreed %age of the debt.





Bankruptcy doesn't stop you working... you MIGHT have some of your earning attached - if it is over a certain amount..

YFred


Joined: 06/05/2009
Posts: 1471

Message Posted:
12/02/2011 12:54

Just like any other legal matter, the best place for the first advice is the CAB. Free and impartial and no cost. Then she can make her mind up as to what suits her. But if she does not pay all the dept back, then she will lose some rights afterwards regarding finance. The best solution is to get the creditors to accept what she can afford to pay and pay it till it finishes, if it is doable. Then she does not get included on bad credit lists. Not that she would be looking to borrow so soon after.

TRNCVaughan


Joined: 27/04/2008
Posts: 4578

Message Posted:
12/02/2011 13:41

Thanks for all the advice so far. My sis is reading this forum and will make up her own mind about what to do.

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
12/02/2011 14:04

Initially the CAB will be the first place to visit. They will be able to analyse your sisters finances. They may bf able to help her re-finance the debts. For example if she had a mortgage she could remortgage for debt consolidation. Her mortgage payments must be up to date though otherwise it's unlikely a lender would consider it.



Obviously without knowing her full financial situation and circumstances it's impossible to give any concrete advice on here.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
12/02/2011 15:58

Tell your sister to go to the CAB as mentioned. She may be surprised just how much help is avaailable without

voluntary bankruptcy. Talking to her creditors is very important, an experienced debt counsellor can help her do this. I have known of occasions where interest has been suspended or even frozen, rescheduling of payments but first her creditors will need details, the CAB have a wealth of experience and will do all they can to help.

mmmmmm



Joined: 19/12/2008
Posts: 8398

Message Posted:
12/02/2011 19:14

re msg 6/9



dalartokat



I owe you an apology..



Thee IS a way folks with debts of £15 K can wipe out there debt ...

http://www.bbc.co.uk/news/business-11669984





The newest form is a Debt Relief Order, which allows a consumer with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy.

dalartokat


Joined: 14/04/2008
Posts: 734

Message Posted:
12/02/2011 20:26

Individual Voluntary Arrangements (IVA) – Government Debt Help Scheme

An Individual Voluntary Arrangement (IVA) is a formal, legal agreement between you and your creditors to repay your debt at a rate you can afford. You make one monthly affordable payment for a set time (Normally 60 months) and at the end of the plan you will be debt free. Creditors will freeze interest, stop any charges on the account and stop harassing contact. Call our free phone, debt helpline and speak to one of our experienced Government debt help scheme advisors.

Debt Relief Orders (DRO) – Government Debt Relief Scheme

Debt Relief Orders are a tool that allows people with certain assets, disposable income and levels of debt to discharge their debt quickly and cheaply. Rather than waiting for long lines and delays through Bankruptcy, consumers can get help from approved authorities. Only approved organisations can file all the necessary documentation to start the Debt Relief Order process. Call our free phon

dalartokat


Joined: 14/04/2008
Posts: 734

Message Posted:
12/02/2011 20:30

...debt helpline and speak to one of our experienced Government debt help scheme advisors.



The 2 people I spoke of the one for £45,000 was credit cards and continually using one to cover the debts of another. The second person was someone I worked with and she done the same, kept borrowing on credit cards and using one to cover the other. They both had to pay back a certain amount each month over a certain time and no credit cards were allowed and the debt was wiped off. Thy were both under a government scheme.

ttoli


Joined: 24/03/2007
Posts: 1172

Message Posted:
12/02/2011 20:32

Vaughan, there is a very good forum on http://www.moneysavingexpert.com/ , great site, v helpful advice.

dusty48


Joined: 14/08/2008
Posts: 258

Message Posted:
13/02/2011 13:51

Whilst this is a very interesting subject with a number of solutions, one aspect that needs to be addressed is the CAB is a very good organisation but is funded by industry via the government, so alot of the banks, lending companies have a financial interest in advice given out.



One farely recent case i came across, this guy went to CAB where they assisted him in coming to an informal arrangement with his creditors paying an amount per month which equated to 57 and half years pay back time, is that good advice? baring in mind if it is an informal process at any time the creditor can choose not to be part of it. i.e they can go through the courts.



As a guide lending institutions will accept 20% of the debt over 5 years any longer than that or lower % of that they regard it as uneconomical to keep the account open.



Have a look at this web site

http://www.bramleymanor.co.uk

TRNCVaughan


Joined: 27/04/2008
Posts: 4578

Message Posted:
13/02/2011 17:02

So are you saying CAB are not totally impartial?

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
13/02/2011 18:26

Vaugan Msg 19 - I think that you would find the people who volunteer to work with the CAB are impartial (certainley the ones I know are and would be livid if anyone said otherwise).

They do get some training but not brainwashing. (I'm not sure that Simon Msg 18 - is wrong but the service is supposed to be and is designed to be impartial)

dusty48


Joined: 14/08/2008
Posts: 258

Message Posted:
14/02/2011 00:09

msg 20 my brother is a cab adviser. not brainwashed just engineered.

spook


Joined: 23/01/2008
Posts: 244

Message Posted:
14/02/2011 01:44

Vaughan

Tell your sister to contact cccs (Consumer Credit Counselling Service) http://www.cccs.co.uk/ this is a registered charity, she can speak to a consulant who will give her free impartial advice, believe me these are the best people for her to deal with.

pollymarples


Joined: 08/08/2010
Posts: 1778

Message Posted:
14/02/2011 07:16

Vaughn, from esperience I know CAB TRAIN THEIR PEOPLE very well and they are totally impartial.



There was a Welfare Rights group in the town I lived in and they also did debt counselling, see if there is a similar organisation in your sisters town/city.

MUSIN M


Joined: 26/06/2008
Posts: 1352

Message Posted:
14/02/2011 16:23

trncvaughn



i take it your sister has no assets ,if this is the case and the amount owed is substantial then yes this is the best way forward ,however as simbas states, no credit for at least 3 years and most cases longer ,it all depends if she can pay a percentage of her total debts this shows some good will.



most people go bust because this is the only option avaliable to wipe the slate clean ,but there is no such thing as a free lunch.



musin



long live the kktc

deputydawg


Joined: 30/03/2010
Posts: 1727

Message Posted:
14/02/2011 16:55

My cynical view based on years of experience working in the field of debt and insolvency is that the whole industry is there to make a fast buck off those who through greed or misfortune encounter insoluble debt. The Courts and the industry barely give a fig whether monies come from debtor or creditor and simply want their fees which in the main are extortionate. By all means use CAB or the like but if contemplating an Individual or Corporate Voluntary arrangement only engage with an Insolvency Practitioner who for certain has the legal capacity to process your application before the Courts. Many individuals and businesses ply a trade as Insolvency experts and consultants but they are no more than "finders" and will charge many thousands of pounds to investigate the financial circumstances involved then have to pass it on to the qualified. Often the monies paid under a Voluntary Arrangement meet the fees of the practitioner and Court but little or nothing left to lower the debt.

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
15/02/2011 12:44

If it isn't a vast amount you can do what I did for my son. Whilst at Uni every bank was throwing credit at him ubtil there was no way he could pay and the debt collectors came after him.

In an effort to teach him how to handle money I didn't pay it off. I guaranteed a loan for him and he paid it all off at a monthly rate and over a period of time which allowed him to start his working life on an even keel.

All that is needed is a willing guarantor.



Incidentally on a previous point. Unless the person has agreed otherwise a joint owner of a house cannot be forced to sell by creditors of their joint owner who is in debt. A charge is normally placed on the property at Land registry which is usually a second charge to the mortgage.

davedee



Joined: 01/12/2008
Posts: 479

Message Posted:
15/02/2011 13:36

In my experience if the debts (sorry not read all posts) are mainly banks and credit cards as opposed to tax or vat

make them a seriously low offer in full and final settlement and negotiate from that point.



You could be pleasantly surprised most banks do not go for judgement for small amounts (10k or less) but pass on to debt agencies who have no real powers without judgement!



I must point out I am not qualified in such matters but have helped many to be free from such debt.



Dave.

horselover


Joined: 18/01/2009
Posts: 129

Message Posted:
15/02/2011 22:03

i got done conned appplyin for iva. guy came round hard sell, took money each month n none of it got paid to debtors.still fightin to get it back via ombudsmen.with iva if creditors dont agree, theyl take u to court. sod the rich bankers, ther all criminals.they lend money that doesnt exsist n make u pay bak interest on it. what a clever invention..

shrimp


Joined: 01/09/2010
Posts: 939

Message Posted:
16/02/2011 01:05

message 27......................but surely you would still have baliffs knocking at your door if the debt was passed on to debt agencies Davedee?

rowlo



Joined: 12/10/2008
Posts: 4796

Message Posted:
16/02/2011 01:32

what she aint got , they cant take .

deputydawg


Joined: 30/03/2010
Posts: 1727

Message Posted:
16/02/2011 11:38

Shrimp. Those with chronic debt who seek legal relief after racking up judgments and bailiff visits have compounded their problems. Horse and stable door come to mind. The abortive costs of any interrupted execution of an enforcement have to be discharged before legal rescue process. Insolvency practitioners will look closely at the situation to ensure that their fees are secure before they will intervene. Thus, those who realise that they cannot meet their financial obligations are better served if they act long before the knock of a bailiff or court enforcement officer at the door.

dusty48


Joined: 14/08/2008
Posts: 258

Message Posted:
18/02/2011 16:42

Deputydawg If you are that deep in debt then bankruptcy must be the answer.



With bankruptcy only lasting between 28 days and 12 months for 1st timers.



Once you are made bankrupt any assets vest with the official receiver so evan the balliff cannot get them

deputydawg


Joined: 30/03/2010
Posts: 1727

Message Posted:
18/02/2011 17:10

dusty 48. It may be that often bankruptcy is the best course of action but it does not alter the fact that once a levy on goods is made by the court and bankruptcy intervenes the goods are still taken and auctioned then costs taken before residue monies are paid to the official receiver for, in theory, distribution amongst creditors. Alternatively, if the official receiver wants the goods and not auction proceeds he must first discharge all the abortive costs including bailiff and auctioneers fees. Thus I still believe that the best advice for those who are in debt is to confront the problem and take immediate steps before any, or too many, creditors do so. My analogy is "many put off going to the dentist when they have a toothache but often end up there later in greater pain and lose more teeth".

dusty48


Joined: 14/08/2008
Posts: 258

Message Posted:
19/02/2011 13:15

You are technically correct once a levy on goods is made then the costs have to be paid but the reality is once bankruptcy order is made then the goods are abandond because of insufficant value, bearing in mind there are 9 different types of bailifs in england with various degrees of power, so not in all cases are you correct. and in any case goods of value have either been sold or refinanced.

joseph


Joined: 17/04/2008
Posts: 709

Message Posted:
19/02/2011 13:40

Vaughan, sent you an email..



Regards Joseph

deputydawg


Joined: 30/03/2010
Posts: 1727

Message Posted:
19/02/2011 15:15

Dusty48. I could bang on here, (as perhaps you could ?), about insolvencies and bankruptcies from the times of "hung, drawn, and quartered" for debt, through the period of "debtor's prisons", Blair's wish to amend law so that potential captains of industry were never inhibited, and along the way quote statute and case law over the centuries much of which precedent remains relevant to this day. However, the only advice I have offered is to give a view that the whole area of insolvency, like many financial fields, has a fair share of sharks to be avoided, including some of the 9 categories you mention, and that early recognition of financial difficulty and action to rectify it is always best.

queenbar


Joined: 14/06/2009
Posts: 427

Message Posted:
19/02/2011 18:48

You are absolutely right Büyük baba because ewerywhere there are financial problems and this problems are refleticing to managers.So for solving your problem you should sit and talk face to face.We really miss you Büyük baba!











Q.B