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Thepup
Starting Member
9 Posts |
 Posted - 13 May 2009 : 14:24:27
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I have got myself in a serious financial mess and cannot see a way out.
I phoned CAB and have to wait a fair while to see a debt advisor.
However, I was advised to cancel direct debits and write to my creditors explining my current inability to pay and asking them to freeze charges etc for now.
I cannot meet the minimum payments whilst out of work.
I am trying to hold them off in the hope that I find work soon and be able to restart minimum payments as I am desperately trying to avoid the bankruptcy route.
Can anyone point me to sample letters to creditors for advising them of circumstances etc.
This situation has me emotionally on the brink and I see no way out.
Another problem, one of my creditors is my building society.
If I ask them to put my debts on "hold" I imagine they would freeze my current account and then I would not be able to do/pay anything to anyone or access my benefits (just applied for JSA).
Would I be best to ask for any benefit entitlements in Giro form in the meantime?
I have been borrowing more just to keep up with the minimum payments and this cannot continue.
Sorry for all the questions....so scared and confused. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 13 May 2009 : 14:45:50
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Hi,
I used the letter at the bottom of this post however the bad news is that companies don't really take any notice of it. The good news is that it takes quite a while for your creditors to start calling and, to begin with, they are quite understanding.
I canceled my direct debits at the end of March and it took about 10 days for one or two of the creditors to contact me. I advised them that I was seeking advice for my situation and told them the appointment times I had with the IPs and they left me alone. It was only really during the 2nd missed repayment that the creditors started chasing and, according to other posters, a lot don't start to get serious until the 3rd missed payment.
The building society won't freeze your account however they do have an obligation to pay their own debts so if you have your benefits paid into this account you should consider opening a Co-op Cashminder account and pay the money in there instead. They are a BR friendly bank so advise them that you are going BR when you open the account. You can also empty the Building Society account of any money otherwise you could easily lose it.
Try calling the National Debtline and speak to a couple of Insolvency Practitioners while you are waiting for the CAB appointment but if you are out of work and don't think you will get a job in the near future then BR may be the only option. If you feel that you will be able to get a job in the future you can try and negotiate a lower (token) repayment with the creditors for the moment until your situation improves.
Dear Sir / Madam,
Re ACCOUNT NUMBER:
I am writing to you regarding the above agreement as I am currently experiencing financial difficulties. I can now not afford the agreed monthly payment because (tell the creditor about the reason you are now having financial problems)
________________________________________________________________
________________________________________________________________
________________________________________________________________
I would be grateful if you would provide me with the current balance of the account and a breakdown of how this has been calculated including repayments I have made to date. This will enable me to establish my position with a view to producing constructive proposals for repayment of the amount owed.
I am in the process of compiling a personal budget sheet illustrating my current financial position and, once I have received the requested information from each of my creditors, I will provide you with a copy and my proposals calculated on an equitable basis from available income.
I would request that you refrain from taking or pursuing any action or set procedures until I have had the opportunity to fully assess my circumstances and liabilities. I would also ask that you put the account into abeyance and forego any interest or other charges which would otherwise increase my indebtedness.
Thank you for your assistance in this matter.
Yours faithfully, |
Edited by - gettingoutofdebt on 13 May 2009 14:46:37 |
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memphisd56
Junior Member
United Kingdom
112 Posts |
Posted - 13 May 2009 : 14:46:43
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Please don`t panic...you have many friends here.
In the meantime...Open a CO-OP cashminder account a.s.a.p. They are very BR friendly, and you can transfer your D/Ds & standing orders now.
An Expert will be along very soon to help you....everything will be just fine.. |
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Thepup
Starting Member
9 Posts |
Posted - 13 May 2009 : 16:14:06
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There is no Co-op bank near me so couldn't access that.
Should I arrange to have JSA payments by Girocheque for now if possible?
I don't want to evade my debt responsibilities but without a job what choices do I have?
Been borrowing just to keep making minimum payments, everything is my own fault which just makes me feel even worse.
The effect this is having on my family already devastating and it has barely started.
One thing I don't understand.....if I sell stuff such as my computers to aid making minimum payments would that be frowned upon in retrospect if I have to go bankrupt?
So worried I don't know where to start with all this.
Was already depressed, think I am heading for a breakdown now. |
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Thepup
Starting Member
9 Posts |
Posted - 13 May 2009 : 16:16:37
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I keep putting off contacting creditors in the hope that a job will come along.
I know things will immediately escalate as soon as I contact creditors.
Should I cancel ALL my direct debits such as mobile/BT/Internet etc or just the things I am actually in arrears with?
So confused.
Addendum: I asume all my computers/stereo eqipment etc would be taken by receivers upon bankruptcy.
I have a lot of that stuff and can accept I have to lose it all but just checking. |
Edited by - Thepup on 13 May 2009 16:18:49 |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 13 May 2009 : 17:10:59
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Don't worry about a Co-op branch not being near you. You can open the account via the telephone and pay money/take money out in a post office.
"One thing I don't understand.....if I sell stuff such as my computers to aid making minimum payments would that be frowned upon in retrospect if I have to go bankrupt?"
No, that would be viewed favourably but do need to make sure you pay your creditors evenly. If you only pay one creditor and not the others then this can be viewed as favouritism.
"Should I cancel ALL my direct debits such as mobile/BT/Internet etc or just the things I am actually in arrears with?"
That is up to you however you need the phone and Internet for job hunting so I wouldn't cancel these. The OR will understand that you need these services. I kept paying my BT/Internet and just cancelled the credit cards and loan DDs. |
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Thepup
Starting Member
9 Posts |
Posted - 15 May 2009 : 16:11:50
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Come the end of this month I will no longer be able to meet the minimum payments on my credit card debts etc.
Assuming I should write to creditors telling them I can't pay for now and asking them to hold off interest/charges etc a while as I desperately seek work my question is.....
What sort of time would it be before a creditor instigated bankruptcy proceedings against me?
Of my 3 creditors I only owe one of them over £2000 (way over) so they are my biggest fear right now.
Soooo frustrating as I could just about cope with min payments for now if I could just find a damn job!!!
This stress is gonna give me a nrevous breakdown. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 15 May 2009 : 17:51:02
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"What sort of time would it be before a creditor instigated bankruptcy proceedings against me?"
Unless it is HMRC, the Council or AMEX then probably close to 1 year and even for HMRC/Council/AMEX it will be around 6 months.
"Of my 3 creditors I only owe one of them over £2000 (way over) so they are my biggest fear right now."
£2k is nothing to worry about. I was £56k in debt (don't ask) when I was declared BR and that doesn't include the 11.5k Student Loan that I still need to pay off. How much are your total debts? Less than £15k and a DRO may be better.
The 1st missed payment isn't normally a problem. You will receive a letter (even if you have cancelled the DD) saying that there is a number to call. Around 2 weeks after the missed payment you will start to receive calls. After the 2nd missed payment things start to step up and the calls are every day. When the 3rd payment is missed then this is the time that banks/CC companies will start to offload the debts to Debt Collection Agencies who will start to apply the pressure.
If you have definitely decided to declare BR then (assuming your debts aren't secures) there is nothing to worry about as the worst they can do is declare you BR themselves and this will just save you paying the BR fee. |
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I have got myself in a serious financial mess
