Australian credit card debt

[bojangles1066]

Any advice would be appreciated, I have a few questions in one. I returned to the UK in 2003 having opened a Commonwealth Bank credit account whilst there. Due to falling into financial difficulties in the UK, my payments fell into arrears. I owe appx $9000 AUS - and make monthly payments that fall below their required minimum payments, as this is all I can afford. I've asked if they can freeze interest as my creditors did in the UK, but they have refused. My payments are barely clearing the interest, I am unable to obtain a loan to pay the outstanding balance. My concern is that they may sell this debt off to a UK recovery agency (if this is permitted) and then I maybe harrassed by them. I have shown good faith in making monthly payments and wish to honour the debt, but part of me thinks what would happen if I stopped paying. Also the only method I am aware of transferring money is via my UK banks international money transfer which is a £25 fee, I can't find a cheaper alternative. Any advice gratefully recieved

[cerberusalert]

Personally given what you are paying in transfer fees I would stop payment all together, eventually they will pass it on to a UK debt collector, by stopping it will be passed on sooner rather than later, then if you still wish to make payments you can do so to the UK collector minus the transfer charges.

 

Now having said that, if you don't feel morally obliged to resume payment there isn't a great deal they can do to take enforcement action here in the UK. They would need to have obtained a judgement in Oz & then apply to a UK court for permission to enforce or apply for a judgement here in the UK... something that cannot be done using UK leglislation as a UK court does not have the jurisdiction, so it would have to be heard using OZ law.

 

Given the amounts involved it would not be economically viable for them, so there is every likelihood that they will wash their hands of the a/c by selling it to a UK debt collector who will have even less chance of taking any enforcement action.

[bojangles1066]

Thanks for the reply - I have long considered this option of not paying, and as the banks don't seem to go by any moral code/moral obligation as highlighted by the banking crisis, then I think why should I. As previously stated my payments make no dent at all, at the balance is creeping up as time goes by, and unless I have some cash windfall, or get further in debt by consolidating which isn't an option anyway then this will be with me to the grave. I've read other threads on similar topic, so do I anticipate, if I don't pay, to get some threatening letters from a Debt Recovery Agency in the UK, that actually do not have any legal clout, and the chance of a CCJ to be minimal.

[cerberusalert]

so do I anticipate, if I don't pay, to get some threatening letters from a Debt Recovery Agency in the UK, that actually do not have any legal clout, and the chance of a CCJ to be minimal.

They will attempt to wear you down with empty threats & bullying but in the end they can do nothing as it's not a UK debt & it's not covered by UK legislation.

[on.the.road]

Hi

 

Myself and my husband are in a similar situation. My husband is Australian and came here to live in 2007. Up until 3 months ago we have kept up on the re-payments on his credit card but never get anywhere. We are currently entering in to an F&F IVA as we have amassed a lot of debt here in the UK and are falling behind on payments. I am hoping that the above will apply to my husband too since he lives permanently in the UK (he has a British passport as his dad was born here). We have been given the option to include it in the IVA but we could not raise the lump sum amount needed to include this so we are just going to have to bite the bullet and see what happens. It hasn't been paid for three months now and they haven't even contacted us yet which is weird. We have emailed them to make them aware of the situation but they haven't responded at all.

 

On the transfer fee thing. Luckily my husband still has his current account there so in the past we have transferred lump sums and made payments when due. we opened a basic account with the Halifax as their online international transfer fee is only £9 as opposed to Santander who we used to do it through with the same charge as your bank of £25. Quite a difference.

 

I wonder when they will come knocking for their money.... totalling $17,000!!!

Edited March 7, 2011 by on.the.road
To add debt amount

[cerberusalert]

If your husband's debts are £15K or below he could apply for a DRO http://en.wikipedia.org/wiki/Debt_Relief_Order

[on.the.road]

Thanks for that cerberusalert. The UK debt is an interlocking IVA for £38,000. But the credit card debt is Australian, so I thought a debt relief order would not apply?

[cerberusalert]

so I thought a debt relief order would not apply

AFAIK it covers all debts.

[on.the.road]

So after doing a bit of looking in to it..

 

Taken from the wiki link above...

 

The debtor must not be involved in another formal insolvency procedure at the time of application for a DRO, such as:

• A current Individual Voluntary Arrangement
  

Does this mean if our F&F is accepted, if we can do a DRO with this aus debt, then we can not do DRO until 5 years are up, or is it classed as ending as soon as lump sum is received by creditors? After 5 years it's statute barred anyway isn't it?

[cerberusalert]

If it's a joint IVA he can't apply for a DRO.

 

The Oz debt is unenforceable here in the UK unless they've already obtained a judgement there.... it would be too costly to try and pursue through the courts here for them. Especially so because of your circumstances, they would be spending money when there's no chance of getting a payment.

After 5 years it's statute barred anyway isn't it?

It depends which Oz State Law it's covered by. It can never be recorded on your UK credit file.

[on.the.road]

Thanks cerberusalert. I thought that was the case. Yes it is a joint IVA so DRO is not an option. But as you say not enforceable here. We are never going to be able to afford to pay it. It's very odd they haven't contacted him yet since we have missed payments but we aren't going to rock to boat. Thanks for your advice