Is Bankruptcy the best option here?

[Docman]

Hi JJ,

I’ve read the various posts on your thread. As someone who used to work for the Official Receiver until I retired many moons ago, I have to say to you that you should NOT consider bankruptcy as an option at this stage. You simply have to much going for you – and now you will find a lot of help from this forum.

First things first - take one day at a time- but make sure you start to take actions each day.

Second, let’s deal with property A. If the company currently leasing it don’t want to buy, then approach the mortgage copany. The last thing they want to do is repossess, especially as it would take them several months to gain possession with a sitting tenant – and then they would have to sell the porperty before they get their money back. See if they will allow you to defer the interst until the end of the current lease when you will have to sell. I calculate you will owe around £85k – 90k in interest payments by then. Offer to repay £100k if they defer. Even if you sold today, you would have to pay the interest penalty of £50k, which you would avoid by deferring the sale by 15 months, so the additional cost would be another £50k.

When the current lease expires, make sure you move back into the property before you sell because – (a) its always easier to sell a residential property with someone actually living in it; (b) it will give you time to make it as presentable as possible after a tenant; and © you could avoid the Capital Gains Tax if the property becomes your ‘principal private residence’, even for a short time.

Thirdly, deal with your unsecured creditors. Take advice from this site and CCA all them. If they have vaid agreements (and many do not), then send them a Subject Access Request (SAR) under the Data Protection Act in order to obtain old statements. Calcluate any unlawful charges and claim these back. Then make them an offer of a reduced payment until you are back on your feet.

Fourthly, the claimant who is taking you to Court. Forget the £60k idea. You will be able to find enough advice on this site to defend an action. Paying out this kind of money now for legal costs is a very bad idea. If you feel in any way responsible to the claimant, write a letter headed ‘Without Prejudice’ and explain your financial position. He may realise he won’t get paid if he takes you to Court, where you would have to defend yourself anyway.

Finally, when you have sent out the letters or taken the steps outlined, forget about these debts for the next few days. Put your feet up and have a bloody good Christmas!

[Docman]

Hi Docman

 

I want to thank you for your advice.

 

Based on your post, I have drawn up the following plan.

 

1. CCA all unsecured Creditors. Include in the same letter a request to freeze accounts and accept £1 per month until I am back on top.

2. Explain to the mortgage company on property A what is happening and offer them a percentage of the differential between the sale price and the redemption fee in return for them agreeing to defer payments until end of lease and sale.

3. Do my best to stay in Property B until 209. Then sell and move into Property A.

4. Let litigators spend their time and money preparing a case. Less clear about what to do about that.

 

I will list all responses as they come in as a record for others in the future.

 

Again, many thanks for your post.

 

I have decided NOT to file for BR.

 

J.

 

 

Fantastic, JJ. And don't forget the last step - have a bloody good Christmas!

[Docman]

This is the first day of the new me...Strategics...

 

I have carefully read many posts regarding CCA.

 

Is it not better to request a freezing of accounts (Credit Crads, Bank ODs and Loans), offer £1 with a review in 6 months and ask for an interest freeze first. Then, if they decline to accept, follow up and ask for CCA?

 

I don't want to come over too agressive from the outset.

 

J.

 

 

JJ

I understand that and some creditors may be helpful. I suggest you start out by explaining that you are reviewing your financial position and would like to gather information about your liabilities. Hence you are making a request using the CCA.

The section in the Act is designed so that debtors can obtain information about their liabilities, precisely what you are doing. It is NOT designed as a means of avoiding payment. However, if a creditor refuses to comply, there are consequences which amount to stopping the creditor claiming.

[Docman]

JJ

 

Glad to hear you have taken control. I know you won't be out of the woods yet, but it is easier once you realise you are on the right path through the trees.

 

CDCS will probably have to forward a CCA request to Barclays. Still send it to CDCS though, as Godmother suggests.

[Docman]

The words 'sheep' and 'opticians' do come to mind.

 

Any chance you can de-personalise and post up a scan of the document supplied?

[Docman]

JJ

 

Definately wool/eyes territory. Have a look at a sticky on enforceable agreements at the start of the DCA section. The first post from 42man is particularily helpful.

You should also have a look at the case of Wilson v DTI 2003 where the House of Lords reinforced the CCA and said basically if ALL the presribed terms are not in the agreement, the agreement cannot be enforced.

[Docman]

Hi there JJ,

Sorry I haven't posted lately but I 'lost' your thread with the various changes on the site.

Can I outline my understanding of the CCA 'rules' and thereby clarify the query you raised above in post #81 and earlier. If anyone else has any comments, please add them to the discussion.

A CCA request is founded on the duty of a creditor to give information to a debtor under either S77 (fixed credit agreement eg loan) or S 78 (running-account credit agreement eg credit card) of the Consumer Credit Act 1974. The same duty falls on the creditor when a DCA is involved because the DCA has a duty as the creditor’s agent to pass on a notice to the creditor (S 175 of the Act).

If the creditor fails to supply a copy of the executed agreement after payment of the statutory fee of £1 within the prescribed period of 12 days, the creditor is not entitled, whilst his default continues, to enforce the agreement. Further, if the default continues for one month, the creditor commits an offence. It is because of this default situation that people have been able to write to creditors/DCAs in the terms outlined in your draft letter. Basically, debtors are telling creditors/DCA, you are in default and therefore can’t do anything to enforce your claim – and that includes the data processing.

That’s the law. Now let’s look at reality. First, what is meant by ‘copy of the executed agreement’? The term is defined in regulations as a ‘true copy’ of the agreement but certain sections (such as the signature box) can be excluded. The same regulations also require the terms & conditions to be either the original ones WITH all the variations/amendments, or a copy of the current ones. This has led one bank just to issue their current terms & conditions as meeting their duty to provide an agreement. I don’t agree with this stance at all but I do accept that it provides the bank with an excuse that means local trading standards offices are unlikely to prosecute a bank for not supplying the agreement.

Secondly, just because creditors & DCAs cannot enforce a claim doesn’t stop them trying to do so. For example, they can still issue a N1 claim form without attaching any documentation. They are supposed to do so (Civil procedure Rule 16) but many don’t.

However, if a claim is made, the defendant can then write to the claimant (creditor or DCA) and demand much more documentation than a CCA notice can provide under another Civil Procedure Rule (number 18). If the creditor still does not supply the documentation, the court can order disclosure which is the procedure you mentioned in your post, JJ.

Finally, the claim itself is easily defended if a CCA request has been ignored because of S77/78. The defendant can also ask for the creditor’s case to be struck out. If the claim isn’t defended, ( and many people in debt don’t defend because they are afraid/confused/head in the sand), then the creditor/DCA can get judgement by default without producing any documentation and in spite of a CCA request un S 77/8.

Moral of the story is always make a formal request for a credit agreement under S77/78 and always acknowledge a N1 claim within 14 days and then put in a defence within a further 14 days.