What Are My Options?

[bb1979]

Hi

I have debts of around £15,500 (not including insterest). I am not in an IVA or anything else yet. I don't have a house and my debts are unsecured.

I am a teacher and since falling ill this summer I have been unable to work or find a new contract in September. I have luckily been able to live with family since then and just about continue meeting my monthly payments from my limited savings, up until now.

I've been in and out of hospital and my doctors are still investigating a diagnosis. They don't know how long it will take, or if, for health and safety reasons, i'll ever be able to return to teaching.

Now apart from running out of money, if I can't teach, i doubt I'll be able to get a different job that will pay the same and therefore, for the foreseeable future, don't know when I'm going to be able to afford the monthly payments of my loans.

I don't want to go bankrupt and I guess without an income I'm not eligible for an IVA. Under the circumstances, my family have offered to lend me some money to pay some of my debts off. However they can't afford to lend me enough to cover all my debts.

If I approached my creditors privately, can I make an offer to settle all my debts early at a reduced amount, given the circumstances and the risk of going bankrupt if I we can't come to some deal? If I did this, is there a guideline to how much I should offer based on how much I owe? A ball park figure?

Also, If they won't agree to a reduced settlement figure, is there anything else I can do? For example is there anyway to take an indefinite payment holiday under the circumstances? And if I wasn't allowed to return to teaching and ended up with a job that paid much less, could I enter an IVA or something then?

The trouble is it's all taking so long at hospital, this is my 4th month out of work and I'm not due in for my next round of test until the end of January... and I really don't know what to do in the meantime???

Should I see an IP for advice? Or should i try dealing with my creditors direct? Like I say, I haven't missed a payment yet... but by the end of this month, or Jan, I will have!

Any advice welcome please!

Thanks
BB

[MelanieGiles]

So sorry to hear of your current situation - and health must definately be treated as a priority over your debts.

If you have the ability to make an offer of early settlement to your creditors, from third party funding, it is often better to engage the services of a debt management company to represent you, as the offer can often appear more credible to your creditors.

Brightoak, Vinvent Bond and Abacus all have posters who regularly contribute to the site, and it would be worth you contacting any/all of them for informal and free guidance.

[size5]

I agree with Mel, an informal DMP to be followed by a possible full and final informal settlement, funded by your family, seems to be a good way forward for you. The problem there is that you have not missed a payment as yet so I can't see an incentive for your creditors to offer you an informal settlement as it stands.

If you have any debts with your current bank, loans especially, then moving away to a bank where you don't have debts is also going to be an essential part of the process.

All that said, I would advise you to take professional advice as soon as you can. My instinct is also to advise you to try and protect what litte money you have left, quite frankly it is being wasted if it is being used solely to fund minimum repayments. Seems to me it could be put to far better use funding any immediate hospital visits/medical issues.

Regards.

[bb1979]

Thanks Mel and Mike.

Should I contact the companies directly for advice, is phone or email best? Or should I PM the experts here?

Thanks again

[kallis3]

You can do either bb. If you look on the experts page, which is on the left hand side of the page, you will find details on there. Vikiw and Andy Davie both work for Vincent Bond, so you could give either of them a call.

[size5]

Ahhh, I can't advise you on that I'm afraid bb1979 as I work for one of the companies Mel mentioned. Make your own mind up, and when you have done so I'm sure all that all you have been pointed towards will give you as near as dammit exactly the same advice and will be delighted to do so.

Regards.

[bb1979]

OK I'll get on the case tomorrow. Thanks for the advice everyone.

Cheers

[kallis3]

Sorry Mike, I never thought of adding you to my list!

bb, you can always give Cleardebt a call as well, they are well respected on here.

[Viki.W]

Hey bb1979, welcome to the forum.[:)] Your health is more important than debts and it sounds like you've had a horrible time. I hope you have a diagnosis soon and I wish you a speedy recovery. Your family sound lovely to want to help, speak to a professional, you'll feel so much better. Good luck.

[size5]

No worries Jan, and, again, good luck for tomorrow.

Regards.

[bb1979]

Quick update:

After speaking to Andy, he said can't do an IVA as I have no income, I could go bankrupt but that I should try and avoid that if at all possible. So he advised that the best thing to do as I only have 1 creditor is to put a full and final offer in writing to them, directly from me.

Sent the offer off today. Total loans £15,300, I offered £9,000 in full and final, with 1/2 of that coming from selling all my assets privately and the rest from family which I have to pay back to them when I'm able to work again. Also sent off with it a doctor's note and letters for recent hospital admissions too.

I have no idea if they'll accept or not? But I've worked out it's over 58p/£1 return, which looking at other F&F offers on the site seems acceptable. Especially as it's literally all i can get together!

Also as I can't work for the foreseeable future their only other option is making me bankrupt and then they'd just get the value of my assets which is less than half my offer.

Also, as i haven't gone through an IP (under Andy's advice) they'll get the full £9,000 without an IP taking any of it.

So will have to see what happens, but I think the offer is reasonable under the circumstances.

Anyone know how long it takes for them to consider these things, or what the chances are they'll accept it?

Have also opened a new bank account with a different bank as have a feeling they'll probably close the account with the creditors!

Anyway, all in all I feel so much better just for reading everyone's posts on here, getting some prof advice and actually doing something about it... even if it's a horrible process and nerve-racking waiting to hear! It's too easy to keep it all bottled up hoping it goes away.. which invariably it never does!

Thanks everyone

[kallis3]

It sounds like a reasonable offer to me, with a decent dividend. If you have explained everything to them, and they see that they will get nothing under bankruptcy, then it's in their best interests to accept.

I've got my fingers crossed for you. Let us know how you get on.

[bb1979]

Thanks Jan, yep I explained everything to them... I explained my illness and provided evidence of hospital admissions, explaied that I was signed off work indefinitely and provided a doctors note, explained what they would get from bankruptcy, explained that I am not eligible for an IVA, explained that I was trying to save them money from not employing an IP to deal with the case so that they would get the full settlement, and explained how my offer was made up from selling my assets and the rest from family... my letter was 3 pages long! lol!

[kallis3]

That should just about do it! Lets hope they go for it.

[Viki.W]

Good luck BB, sounds good to me. I'll have my fingers crossed for you. X