My Dad has been really poorly and unfortunately has had to give up work, thus leaving him collecting just £64 a week benefits.
He can't afford his loan and creditcard repayments so I advised that he phoned the CCCS and ask for help with his situation.
They have advised him to just pay £1 a month as they said they cannot set up an IVA or DMP for him because he doesnt get enough now each week.
Luckily he had lots of insurances as he was self employed so is getting his mortgage paid, but what my question is is that the CCCS have just told him to pay this £1 a month and the creditcard and loan company cannot do anything??
Is this right?? I'm just a bit worried that he will end up losing everything as nothing is being set up for him.
Is there any equity in the property? Paying £1 per week to each creditor is no solution to his problem, and I would have thought that bankruptcy proceedings may be more suitable if the equity is low or negligible.
I think the statement of 'CCCS have just told him to pay this £1 a month and the creditcard and loan company cannot do anything' is rather misleading and not true.
Does he have any insurance for the unsecured debt or was it just the mortgage/secured debt?
I'd recommend you/your dad talking to an Insolvency Practitioner to just get some impartial advice. CCCS are supposed to be impartial but they are funded by the credit card companies so you do have to question some of their advice sometimes.
How long has your dad been suffering? I have an arthritic condition that crippled me to a similar state where I couldn't pick up plates or cups ... but after a couple of months the specialists got me on some medication that relived the pain and greatly improved things so there are options for your dad regarding finances and his health!
Yes i think he does have equity in the property approx 40k. He has enquired about equity release but they require him to have paid his mortgage off which he hasn't as yet and the amount they would give him wouldnt pay off his debts, he would be about 15k short. His debt is approx 20k.
He hasnt got any insurances for the unsecured debt, it was just the mortgage.
666 - the docs have put him on steroids but for some reason keep putting the dosage down so low that he can't even get out of bed some days.
Hi
It is very unlikely that a creditor will force bankruptcy. If he can only afford £1 per month then that is better than nothing at all.
Let his creditors know that he has taken advice from the CCCs.
Regards
Not sure I agree with you there Andy. Creditors who know that there is an asset to pursue may well look to bankruptcy as a way of getting paid - even the threat of it can make people find money to pay one debt rather than create an even distribution.
Hi
Only 16% of bankruptcies last quarter were made by the creditor Mel, I agree that creditors often threaten it but as the figures show they rarely pursue it, in general.
Regards
I think those statistics are due to the fact that not many people have assets to chase - especially in these days of negative equity. In my experience, if creditors get a nose for some equity they may well pursue it as bankruptcy can force a sale of the property, whereas a secondary charging order would be unlikely to receive an order for sale at Court.
With petitioning creditors costs forming a first charge on the bankruptcy estate - even before the Trustee's own fees - many institutions will take the view that there may be nothing to lose in proceeding down this route.
Although only 16% of petitions were successful against debtors, there are a lot of petitions lodged which are eventually withdrawn as that creditor manages to get itself ahead of the other creditors in the pecking order - sadly and unfairly if they are merely using the bankruptcy threat as a method of debt collection.
superstupid wrote:
My Dad has been really poorly and unfortunately has had to give up work, thus leaving him collecting just £64 a week benefits.
He can't afford his loan and creditcard repayments so I advised that he phoned the CCCS and ask for help with his situation.
They have advised him to just pay £1 a month as they said they cannot set up an IVA or DMP for him because he doesnt get enough now each week.
Luckily he had lots of insurances as he was self employed so is getting his mortgage paid, but what my question is is that the CCCS have just told him to pay this £1 a month and the creditcard and loan company cannot do anything??
Is this right?? I'm just a bit worried that he will end up losing everything as nothing is being set up for him.
Hello,
Just read through your post.
I have attached a link to the CCCS website for you to read through the collection process, as this will help explain what the creditors can and can’t do. Your fathers counsellor will have discussed this during his appointment.
I can’t comment specifically on your father’s situation as I don’t have access to his account, but if £1 token payments have been discussed this will generally be for two reasons.
The first one being that there is not enough money to cover priority costs within his budget. So even if he went bankrupt, this would not solve the problem as he would still need enough money to pay his day to day living costs. He would need to try and balance the budget and then long term solutions can be looked at.
The other one been that your fathers situation is just going to be temporary i.e. it’s just going to be a little while before he is back in work.
Hope this helps
Regards
Sarah
CCCS is a registered charity. We take great pride in offering first class help and advice, but we only offer this where we have been able to fully explore and understand your circumstances with you. We want to help you understand these choices and their possible implications but not make them for you.
With regards to bankrupcy if a creditor petitions for it there debt takes priority over all the other creditors. I thought that after the or fees which I believe are quite high all the others got paid equally at whatever pence per pound.
