If you had 70K debt on credit cards due to business failure What would you do?

[Cesario]

Can't sell house
can';t re-mortgage
Can't pay off the debt monthly as earnings have plummeted
ideas?

thank you in advance

So if we file for bankruptcy

would we keep the house?
two cars, worth very little.
debt is all cc (desperate attempts to keep business going)
both of us are in employment now.

no one can tell you if you are going to keep your house unless you get WAY more specific about its value and what your equity is.

you would be best to see CAB or a professional in such a case.

There's a Bankruptcy forum here on moneysavingexpert that will be able to help with questions, I have no idea I'm afraid...

I'd give the CAB a ring first of all.

you could also look at a debt management plan - myself and dh have just done one with payplan

They were really helpful basically if you go to their website and enter your details an advisor will phone you and you just go through everything with them and then they talk you through your options and advise what will happen etc - I believe they do IVAs, Debt management plans and bankruptcy

This is definately the best thing we have ever done and it;s not even been finalised yet

I cannot recommend CCCS (a charity) highly enough for their advice and support . Give them a ring ASAP.

www.cccs.co.uk/

They are very good and free.

You really want to avoid fee-taking companies (including payplan). They take a slice of your money before your debts are paid, which is crucial in a DMP because you are paying off all of your debt.

£200 per month towards a DMP would take you 30 years to clear, even without a fee-taking company.

National Debtline and CCCS are both non-profit debt advice companies. Ring one of them for the best advice for your situation.

"To be fair, if you owe £70k and can't pay it why do you want a good credit rating?

I am not saying bankruptcy is right, but that is an odd reason to say it's the wrong path."

I agree. I never want to owe anyone money again. We have no overdraft, no cheque book, no loans, no credit cards.

Also agree with Hecate - the relief is incredible. You would walk in to court with a £70k millstone, and walk out debt-free. Anyone that phones just gets your court number quoted. Any letters are dealt with by the official receiver. It is a new start.

I just don't want to lose my house, so need a plan that will work with that.

happy to sell but I can't at the moment. If market was ok then we would sell and down size.

Really hope you achieve that but you might have to take a loss on the house. Would it sell if the price was right?

I am not sure, it needs renovating and is a fantastic investment if someone has money...we love it

I have heard that you can phone the cc companies yourself and see if they will take an offer..has anyone done this?

You can, but you need to think carefully about doing so if there is any likelihood of being declared bankrupt. Paying money to one credit card company over others is known as 'preferential treatment' and is viewed very dimly by Official Receivers. As is taking on further credit once you realise you are insolvent (cannot pay your debts). They can carry stiff penalties.

If you want to approach them, then you need to approach all of them, offering proportional token payments. i.e. creditor x is owed £1000 so they get £10pw, whereas creditor y is owed £500, so gets £5 per week.

The other thing to bear in mind is that they will rarely freeze interest if you approach them, so you may never be actually debt free, because the interest outstrips your payments.

You need to read this leaflet, published by the Insolvency Service.

What will happen to my home?

If I coudl get a lump sum together, I could offer to pay some of the debt? I have heard they will take an offer. Is that correct?

They may do but you seriously need to be speaking to professionals about this, i.e. the CAB, the CCCS, National Debtline etc.

I think you are tangling yourself up in knots and need someone to go through this with you step by step to assess all of your options.

yes I know - thank you, I will do but I want to know loads of stuff before I do that iykwim

CCCS are free and they will talk you through all the different options, taking into account your circumstances. If appropriate, they will then negotiate with the CC companies on your behalf and sort out any payments to them. Please please phone them now - they will be able to answer all your questions.