Hi, My sister is having major problems with debt. She has had a very upsetting life over the last two years, where she has lost her grandson and her own daughter and due to this she began to have seizure's Because of this I invited her and her husband to come and stay with me in Cyprus. She is now in a state as to where she is finding it very difficult to pay off her credit that she obtained due to her past life experiences. She has in total approx. 17,000 worth of debit on two credit cards and an overdraft. She is unable to continue paying these debts off and the stress of all this is making her unwell and I am extremely worried about her. I have looked at Bankruptcy but am not sure on what the correct road is to take . Please please can you give us the correct road to take as all of this is getting so upsetting for the whole family and we just do not which way to turn. Many Many Thanks in advance. and I now await a reply from you soon.
Hello -- sorry to hear of your sister's troubles. Rather than give advice based on only a few parts of the whole picture I would suggest that she has a chat with a couple of IVA providers to discuss the options. In a nutshell, and VERY briefly, they are:
A DMP ( Debt Management Plan) where a provider agrees a repayment schedule with all creditors, often being able to reduce or freeze interest. Stepchange run fee free DMPs, being partially funded by creditors for this purpose. This would last until the debts are fully repaid.
A DRO ( Debt Relief Order) -- sometimes described as 'bankruptcy lite'. Again Stepchange is licensed as an intermediary for these. Debt has to be below £20k and the debtor must have no assets and a disposable income of less than £50 per month. This lasts for a year and wipes the debt for a fee of £90.
Bankruptcy --- Wipes all the debt, but you will have to liquidate all assets. These days discharge takes a year and there might be a requirement to make payments of disposable income for 3 years. Fees for this are around £750 up front.
IVA - An agreement is made which runs over 5 or 6 years to pay the agreed disposable income monthly. Also extra income during the IVA will need to be paid in. You are allowed to retain a modest vehicle and can keep the house, if you own one, but would be required to look at releasing some equity nearer the end of the term of the IVA.
I would suggest chatting with smaller IVA providers, rather than the large 'factory firms' for a more individual and, often, sympathetic service.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014 http://foggy.blogs.iva.co.uk
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk