Omi Posted April 1, 2005 Report Share Posted April 1, 2005 Forgive the length! My girlfriend and I are looking at building a future together, but we are currently crippled by debts which she built up with her ex. Situation is as follows: My g/f and her ex spent lots on store cards, credit cards, loans etc, with occasional consolidation into ever-increasing loans. The grand total of the combined cards and loans is £52,000. (Fifty-two thousand English pounds sterling.) – On top of this there is a separate £4,000-ish loan for a car. When they split, he took the car and agreed to pay for that, as well as half of the total debt. Neither of them are particularly well-paid, but I’ll get to that in a minute. When they were living together, their accommodation was provided by their employer, so their combined incomes (roughly £2k PCM) were comfortably paying the steep repayments. When they split, my g/f was no longer entitled to the accommodation, so moved out, and is currently living with a colleague who charges her nothing for lodgings. Because her ex had no credit rating, my g/f has ended up with around £56k of debt in her name. – The original plan was to have a standing order set up from her ex, paying her about £650 a month, with a signed solicitor’s letter from him to confirm the repayment plan. When she went to see a solicitor about this, they shook their head and said that even if he signed in blood that half of the debt was his and that he would pay a monthly sum, it wouldn’t be worth the paper it was written on. Apparently he can walk away at any point, pay absolutely nothing and there is nothing we can do about it. He has already started to default on his payments, with excuses and promises to pay, but meanwhile my g/f is getting an income of about £1k, with outgoings of around £1.3k per month. Any time the ex decides to disappear, she is left in the crap. He doesn’t appear to be wise to this as yet, but I feel it’s only a matter of time. When g/f needs to contact her ex, she has no choice but to be chatty and flirty with him, as if she gets angry that he hasn’t paid, he reminds her that it’s all in her name. This obviously boils my pith. G/f contacted Payplan, a debt and credit help agency, who told her that because she was living with a friend, there was nothing they could do to help. – Consumer Credit Counselling Service weren’t much more help, and it would seem they just expect her to default so they can negotiate with collection agencies. I want to move my g/f up to Darlington and get a place together when she can find a local job, but we can’t do this until she’s in a better financial position. I’m not exactly affluent, but I’m prepared to pay the rent on a place and have her salary in full paying off debts. – We’d live on beans, but we’d be happy! I’m thinking the best thing to do might be to ring round all her creditors, explain to them all that the money situation is dire and ask if they’d be prepared to accept lower repayments on everything. If we can get these payments down below her salary, then anything her ex pays into her account can be used for living month to month. Feel trapped by the imbecile she used to go out with and I’ve been advised in no uncertain terms that if he is found kneecapped, or with severed limbs or a samurai cut from chin to ball-sack, that I will not be getting nookie for the foreseeable future. Anyone have any thoughts on progressing this? Feel free to ask questions! Thanks folks. *sigh* Needed that. Link to comment Share on other sites More sharing options...
loddrik Posted April 1, 2005 Report Share Posted April 1, 2005 I don't like to say it but can she not declare herself bankrupt?? Link to comment Share on other sites More sharing options...
PeterPiperTwo Posted April 1, 2005 Report Share Posted April 1, 2005 Have to agree with Loddrick. I believe the 'stigma' attached to bankruptcy is not as bad as it used to be. Link to comment Share on other sites More sharing options...
loddrik Posted April 1, 2005 Report Share Posted April 1, 2005 On a slightly less serious note, if that fails, I'm sure there'll be a few 'Albanian gentlemen' who'll gladly give you a few quid for her! Link to comment Share on other sites More sharing options...
Mac Posted April 1, 2005 Report Share Posted April 1, 2005 Dude, bankruptcy might not be necessary - it certainly won't be in the creditors interests to do that as they'll only get a few p in the pound back on the money you owe. Instead, get your ass down to the Citizens Advice Bureau and talk to them about an Individual Voluntary Agreement (IVA). The creditors will like this because it means they stand a chance of getting more of their cash back and you'll like it cos it's not bankruptcy. Saying that though - 50k of debt is astonishing on a take home of 1k/month. That's 4 and a bit years @ 1k/month repayment assuming you spend no other money I'd poo the bed if I owed that amount I would seriously try the IVA first as they may be able to index the payments against your (proposed) growing income. Try the IVA route, and then possibly consider bankruptcy. Also, make sure you're not a related person when she goes for bankruptcy, if she does, otherwise you'll be considered a seriously bad risk also. It's not as bad as it seems really - I mean she'd get a controlled income for 2/3 years (depending on the term), no more stress from the creditors etc. At the end of the period she'll be declared discharged and life can carry on. Admittedly she'll probably have to pay more in the future for any credit but I would expect, knowing what she knows now, that getting future credit will be the last thing on her mind. Good look fella Link to comment Share on other sites More sharing options...
Drew666 Posted April 1, 2005 Report Share Posted April 1, 2005 The inside track from a banker's point of view? There is no way on earth that she needs to repay the whole sum. Any finance professional will take one look at the situation, low income, huge debt and basically take anything you offer him in the region of 50% of the debt owed. He will consider himself lucky to have got that much. Link to comment Share on other sites More sharing options...
Mac Posted April 1, 2005 Report Share Posted April 1, 2005 Even 50% would be a heavy burden hence the suggestion of an IVA? That gives you a bit of bargaining power in that the professionals do the bargaining for you. Link to comment Share on other sites More sharing options...
Drew666 Posted April 1, 2005 Report Share Posted April 1, 2005 [ QUOTE ] Even 50% would be a heavy burden hence the suggestion of an IVA? [/ QUOTE ] Very true, but how does an IVA affect your credit rating? (It's not a system available in Germany, hence my ignorance) The key to any debt restructuring is trying to get the debt made interest-free. Makes a hell of a difference if you don't have to pay usurous rates on the capital. Link to comment Share on other sites More sharing options...
scooby_simon Posted April 1, 2005 Report Share Posted April 1, 2005 [ QUOTE ] [ QUOTE ] Even 50% would be a heavy burden hence the suggestion of an IVA? [/ QUOTE ] Very true, but how does an IVA affect your credit rating? (It's not a system available in Germany, hence my ignorance) The key to any debt restructuring is trying to get the debt made interest-free. Makes a hell of a difference if you don't have to pay usurous rates on the capital. [/ QUOTE ] Indeed, I think you need to get her to talk to someone. IMO this kind of debt (50 x monthly income) is not realistically servicable at any interest rate. You need to take her to talk to someone, BUT YOU MUST INSURE <u>YOU</u> do not become a "related person" as MAC suggests as this has serious implications for you. The key here is negotiation (on her part) - she needs to be resigned to the fact that the ex will probably walk away from this debt at some point. Get her to talk to the creditors and get something like an IVA sorted out at an agreed amount - the creditors probably do not know the extent of her problem, when this is explained to them they will be interested in getting something back and so would be open to a %age aggrement. Link to comment Share on other sites More sharing options...
Omi Posted April 1, 2005 Author Report Share Posted April 1, 2005 Just been looking at IVAs. Sounds perfect... Waiting for her to get a break so I can phone her and tell her about it! Thanks guys, God bless TSN. Link to comment Share on other sites More sharing options...
Insurance Jon Posted April 3, 2005 Report Share Posted April 3, 2005 omar - there is a service near your girlfriend called the Conumer Credit Counseling Service. they are a charity in Leeds set up to sort out IVA's for you free of charge: Consumer Credit Counselling ServiceWade House, Merrion Centre, Leeds, West Yorkshire LS2 8NG Tel: 0800 1381111 They have helped 2 of my friends who were nearly suicidal over cash. they negotiate the debts down and get the interest frozen and set a monthly amount which you pay to them. they then distribute this to the creditors free of charge. They then review your situation every 3 months to make sur eyou can still pay it, if not the get it negotiated down again! no loans, no blacklisting, no interest! If you need to know more you have my number! Link to comment Share on other sites More sharing options...
Omi Posted April 3, 2005 Author Report Share Posted April 3, 2005 cheers jon, you movie star! Link to comment Share on other sites More sharing options...
Riz Posted April 3, 2005 Report Share Posted April 3, 2005 Hope all goes well for you and her. Riz Link to comment Share on other sites More sharing options...
Insurance Jon Posted April 3, 2005 Report Share Posted April 3, 2005 not yet mate....but I spend money like them so I may need them in the future too! Link to comment Share on other sites More sharing options...
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