Good morning.

I've had a large loan (Originally £10,000, now sitting in the region of £8,000) for nearly two years now, have made nearly no progress paying it off and have been passed through a couple of debt collection agencies. The one I'm in the hands of now has basically threatened to take me to court unless I pay up the full sum (Which in my current circumstances is impossible). They haven't long been in charge of collecting my debt (About a month now) however in a couple of phone conversations with these people I've made them aware that I simply cannot come up with the money to pay them off.

They offered me three options to pay it off originally, one being the original payment amount (Which I can't afford per month), another being a large portion of the debt upfront followed by a lower monthly payment (Again, not possible to find the money) and the third being a reduced total amount to pay it off and clear the debt (Again, completely impossible in my current state).

My questions are:

should I be worried? Surely if they take it to court, the court will see that I can't afford the payments and give me a lower payment option, seeing as I'm willing to pay and just unable to afford their terms?

Is there any action I should be taking now to soften the blow or put myself in a better position?

If taken to court, given that a) I'm willing to pay the debt off and b) I'm just unable to afford the full amount, how likely are bailiffs to be authorized to come into my home?

If my total debt is around £8,000-£9,000, should I consider bankruptcy? Is it too late for this when being threatened with legal action?

Thank you for your time
Dingolicious

Good Morning,

You have no reason to go bankrupt unless you are unemployed and without any source of income and cannot afford to pay even a reduced minimum monthly payment. Going bankrupt will destroy your credibility and will or may affect your career. Bailiffs will only be ordered to your house if it is proven that the loan was used to acquire a certain item or asset or a hire purchase item which you are still using and refuse to pay for.

Option 1. Wait for them to take you to court. Once a judgement has been drawn and you are ordered to pay, you will then go for a form called N245. (Application for suspension of a warrant and / or variation of an instalment order). this form will then be presented to your solicitor who will then appeal the judgement. what is does is that it enables you to explain your situation and propose a monthly payment to the collectors. Ofcourse this will prove your income and expenses and will declare a disposable income which can be used to offset the debt on a monthly basis. It will also sespend any bailiff actions ordered. If you are at the bailiff stage already, then NOTE: A bailiff from the magistrates cannot enter your premises by force. that will be seen a breaking and entry. Never leave your windows open or your door unlocked. Once he has gained un-resisted entry then he has the right to carry out his order. Once the door is locked and windows locked and you dont willingly let him in then you are safe.

Option 2. If you have more than one debt..i.e. a minimum of two creditors all unsecured, then you may be eligible for a debt management plan which will is flexible arrangement between yourself and your creditors but proposed by a reputable debt management company. I will be happy to discuss further with you if you want. Just send me a PM with contact details and i will call you for a chat.

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