Australian debt being chased in the UK

[bernard99]

Hi.

 

We left Australia 6 months ago where we left a car behind that was financed. I owed nearly $20,000 on the car in my name only.

 

I explained that we were leaving the country to the company it was leased to and asked for help. I asked them to take the car back, sell it, and then give me a loan for the balance which I would pay for monthly. They were entirely unhelpful and told me I had to pay the finance off and sell the car myself. I did not have 20k so my hands were tied. I left the car and ran away. I sent the keys back to the company.

 

6 months later I have received an email informing me that I owe $8550 to a debt agency in the Australia. They still have my address in Australia. If they look back through their records they will see some previous addresses in the UK, one of which I now live in again and own.

 

My wife and I own two houses, both heavily mortgaged but there is equity in there.

 

My question is what do I do?

 

Morally, of course, I sell a house and repay the debt. But what about immorally?

 

I seem to have 3 options:

 

1. Do nothing and hope they never find me (but if they do the debt will have risen hugely and I could lose a lot more than a house)

2. Offer a derisory full and final payment (I'm thinking about $2500), but this would surely be refused.

3. Ask for the interest to be frozen forever and pay an amount each month...perhaps $50.

 

I have never been in this situation before so have no experience.

 

Incidently we also have a $12k loan in Australia with 6 years out of 7 left to go (we are still paying it)

And a credit card with $8k on it. We are still paying this as well but struggling with it.

 

I know, its a mess. I don't want to try to excuse myself by giving you a sob story of how we got into debt, the fact is we are in it and Im keen to get advice.

 

Thanks for your help. Feel free to call me a moron, Im not easily offended.

 

Thanks.

[citizenB]

How you got into this muddle is irrelevant - we don't Judge on CAG..

 

I am sure that there will be someone who will be able to advise.. and will pop in over the weekend .

[bernard99]

Thank you that's much appreciated.

[citizenB]

Whilst you are waiting for someone who knows how to help.. you might want to have a read of the thread linked below. There is information that you might find useful.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?361524-Scared-in-Australia

[bernard99]

Just to add something, which is largely irrelevant, I have no morals around the car debt. The car cost $21k. I made 14 monthly payments of $500 and when I asked how much they wanted for me to pay it off, they wanted $20k!!! All the interest was front loaded which was outrageous (perhaps I should have read the small print) Im actually amazed the debt collectors only want $8500 now, I thought it would be a lot higher.

[bernard99]

Well that's very cheering CitizenB, thanks very much again.

[renegadeimp]

SO you have already been offered a huge discount? Time to ignore them.

[bernard99]

Well I have requested they explain how they calculated the £8500 in order to ascertain if they have given me a discount.

At the moment I am presuming that they sold the car for $11,500 and therefore this is the amount outstanding.

Im thinking that they may except an absurdly low monthly payment for the next 20 years or so with interest frozen and, being that they don't know where I live, I have nothing to lose by offering a low repayment plan. If they don't accept then I can return to hiding.....

 

My concern regarding hiding is that they will find me in 6 years and the debt will be enormous.

 

Really what I am trying to find out is can an Australian debt be enforced in the Uk

 

Thanks

[unclebulgaria67]

Well I have requested they explain how they calculated the £8500 in order to ascertain if they have given me a discount.

At the moment I am presuming that they sold the car for $11,500 and therefore this is the amount outstanding.

Im thinking that they may except an absurdly low monthly payment for the next 20 years or so with interest frozen and, being that they don't know where I live, I have nothing to lose by offering a low repayment plan. If they don't accept then I can return to hiding.....

 

My concern regarding hiding is that they will find me in 6 years and the debt will be enormous.

 

Really what I am trying to find out is can an Australian debt be enforced in the Uk

 

Thanks

 

They can try. There is a case on here, where an Australian Debt Collector has used a UK based collector to issue a UK county court claim. If this happens, you would have to dispute jurisdiction.

 

Quoting what has been said before on this.

 

"With regard to Jurisdiction, it is possible that an Australian contract can be enforced in a UK court if the UK court is deemed to be the appropriate forum to hear the case. Given that the debtor is a UK resident, it could be argued that a UK court is the appropriate forum.

 

Regardless of Jurisdiction, any contract between an Australian financial institution and a (then) Australian resident, signed in Australia is subject to Australian Law.

 

A creditor would have to sue in a UK under Australian Law, which is not the easiest, or cheapest option.

 

As the alleged debt is covered under Australian Law, the creditor would need to be a member of an Australian financial ombudsman service (there are two: fos and COSL). Simply disputing the debt with the ombudsman service is going to delay anything for months at least. There are a lot of things a creditor has to do under Australian Law to enforce a judgement in court, not least issue a Section 80 letter before commencing any actions.

 

Anyone interested in reading up should google "ASIC debt collection", "Section 80", "UCCC". "

[unclebulgaria67]

Here is the case mentioned which is currently adjourned, but maybe worth keeping an eye on, as it may help you at some point.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?378249-Australian-credit-card-debt-credit-corp-Stevensdrake/page9&highlight=Australian

[bernard99]

Thank you for your help.

 

I wonder what percentage of debts in Australia progress to this extent? Difficult to answer that I imagine. I wonder if the creditors were given this persons address by them. In my case the creditor does not even know I have left Australia and has no forwarding address, they do have old addresses (one of which I now live at, but all they could do, I would think, is send a letter there and hope I replied)

 

I do wonder if its worth spending the next 6 years worrying about something that I may be able to sort out with the creditor in a reasonable manner now.

 

I will be offering a small sum each month (perhaps $60) with interest frozen and hope they will except this....I'm not sure of an offer like that is laughable though and will be rejected immediately.

[renegadeimp]

Discounts = bad debt

Stop playing letter tennis.

[unclebulgaria67]

Thank you for your help.

 

I wonder what percentage of debts in Australia progress to this extent? Difficult to answer that I imagine. I wonder if the creditors were given this persons address by them. In my case the creditor does not even know I have left Australia and has no forwarding address, they do have old addresses (one of which I now live at, but all they could do, I would think, is send a letter there and hope I replied)

 

I do wonder if its worth spending the next 6 years worrying about something that I may be able to sort out with the creditor in a reasonable manner now.

 

I will be offering a small sum each month (perhaps $60) with interest frozen and hope they will except this....I'm not sure of an offer like that is laughable though and will be rejected immediately.

 

You could make such an offer but you have to be careful about the basis of any acceptance. I suspect that they will sell the debt onto a collection agency, who will hassle you for increased payments.

[bernard99]

Sorry if I appear a bit thick, but this is a very new game to me!

 

Bad debt means they are already resigned to not getting it back do you think? So by only trying to get some of it back they are moving towards writing it off do you think? Im not writing any letters though, just emails, no address provided...

 

In terms of selling the debt on....could they do that even with an agreement with me? Its already with a collection agency, can they sell the debt to another agency?

 

I have a template letter but I was thinking something along the lines of....

 

"If you accept this offer, you agree to these terms until the loan is fully repaid. You agree to freeze the interested until the loan is repaid in full"

 

At the moment I have all the power (although I am quietly nervous) because they don't know even which country I am in!

 

It will be interesting to see how they explain how the $20k became $8k because I would be shocked if they sold the car for $12k I would be very surprised.

 

If they don't like my offer I will simple retreat back into hiding again and hope they accept it further down the line.

 

Its an uncomfortable position because essentially I am in the wrong. I don't fancy going to court over here and arguing because I do owe them this money (even though the contract was a right rip off, I signed it, so have myself to blame).

[renegadeimp]

Bad debt means it's full of unfair/unlawful charges, PPI. They might not have the paperwork needed to enforce it. The DCA's know this and hope you don't have the intelligence to do some searching and find it out yourself.

 

I mean c'mon. A 20k debt and they're willing to accept 8500? :/

[bernard99]

True, but there was a car involved which would have got sold at auction and will have made quite a bit.

 

I will have to see what the response is from them in regard to how they came to calculate the debt at 8500

[renegadeimp]

When a car gets repo'd and sent to auction, it rarely hits a high price. Personally i would ignore them, but if you want to admit the debt and consider repaying them ( never pay a dca, only pay the OC), then you need to get as much info from the OC as you can, including how much the car was sold for, and the proof of that amount.

[bernard99]

Thanks

 

Ignoring them sounds like a good idea.

 

Its the Debt Collector that wants paying, the Original Creditor has not contacted me for months. I thought that was because the debt had been sold on, so how would I go about paying the OC if the money is now owed to a debt collector?

[bernard99]

I have asked the DC for info on how they got to 8500...do you think they will not necessarily give accurate information?

[renegadeimp]

The DCA will say ANYTHING to you to get money from you. They have no meaning of morality. You should be communicating with the OC if you really want to pay the debt. As i said before, you do NOT need to communicate with the DCA. They have no legal powers. Especially in another country.

 

I take it as well, they only have an email for you and have not written or telephoned you? If so, then why are you even contemplating talking to them?

[bernard99]

The DCA will say ANYTHING to you to get money from you. They have no meaning of morality. You should be communicating with the OC if you really want to pay the debt. As i said before, you do NOT need to communicate with the DCA. They have no legal powers. Especially in another country.

 

I take it as well, they only have an email for you and have not written or telephoned you? If so, then why are you even contemplating talking to them?

 

Im not contemplating talking to them, I have only ever emailed them.

They may have written and phoned me but only at my Australian address and phone number from which I am long gone!

The email is their only way of communicating at the moment.

 

I was just concerned if I did nothing they may catch me further down the line and the debt, by then, would be huge.

[bernard99]

Just had another look at the email.

 

The letter is coming from a debt collector who wants money paid to the OC.

 

As I say, Im not desperate to pay the debt. Im just worried in case it grows and they search and find me and then try to take my house. It may sound far fetched but in 5 year at Australian interest rates, that debt could be big!

 

My plan was always to ignore any correspondence, and I have done since I left Australia. I just accidently opened this and it got me thinking!

[renegadeimp]

Trash the email and start ignoring. They have no way of finding you, and even if they did, to get ANY money from you, they would have to go to court and prove that they are legally allowed to collect across countries.

[bernard99]

Thanks for the advice

[unclebulgaria67]

If you were going to pay the original creditor or debt collector, how would you make payments to them ? Once you factor in transfer/exchange costs on smallish payments, you will be paying a £8.5k debt for years. I think they will want repayment over no more than 3 years, if they were going to freeze interest.

 

Send them a email and take it from there. If you cannot agree an arrangement acceptable to you, then at least you have tried and if in the unlikely event this is taken to court in the UK, you can evidence that you did try to negotiate repayment of the debt. Remember that the email will act as acknowledgement with respect to statute barring. In the email, ask for a full breakdown calculation of the debt amount.

 

Or do nothing and in a few years time, they will probably start writing to you and you can deal with it then. It is not very easy for foreign debts to be enforced in the UK, particulary if the debt was incurred outside of Europe.