In 1997 due to a Business Failure we handed the keys to our home back to the Northern Rock BS, and moved into rented accomodation. I tried to ensure that the BS did not know our correct address. we agreed to make a nominal payment of £10.00 per month which we ceased 18 months ago! We have moved several times since 1997, and managed to repair our credit rating., recently we have received 2 letters from a company called Evershields, who are demanding a shortfall figure of 70k plus, the 2nd letter states that their client is prepared to make me banrupt.

I remain on a low income, in a rented home, and cannot repay the shortfall, obviously dont want to be made bankrupt or black listed.

any assistance would be appreciated

I have not entered into any correspondence

Regard

steve Butler

-- steve butler (citizen@citizen70.freeserve.co.uk), June 28, 2003

Answers

Steve,

I think if you cannot repay the shortfall and you do not wish to go bankrupt you really only have three options:

a) ignore it - in which case they will almost certainly take you to court, where you may be declared insolvent anyway, or the court may order an attachment of earnings. This will then go on your credit file or black listed as you say.

b) Offer to make monthly payments - I think this is to be avoided as this way it will cost you a lot more and could take you a lifetime to pay. Think of all the additional interest (you may be able to get the interest frozen). You will still probably get a bad credit rating doing this, until 6 years after the last payment to clear the debt, when this should automatically drop off of your file.

c) Make an offer to settle - which I believe is the best thing if you can do it. This way too you can ask them to make an entry on any credit reference agency file relating to the shortfall as "satisfied" in full.

You should think seriously about insolvency though, especially if you are on a low income with no assets, this will get them off your back permanently. It's no big deal these days, I believe I read there are some 2,500 people declaring insolvency every month. When the new Enterprise Bill comes into force next year discharge will be much quicker, somewhere between 3-12 months, and there are already transitional arrangements. It costs £390 (it may only cost £250 if you are on a low income or on benefits). Although this will give you a bad credit rating it's not impossible to rebuild it, many people have done so, but it does take time. You could offer the £390 as a full and final settlement to the lender first, you never know they might accept.

You could even ask the lender to lend you a sum, with affordable repayment instalments, in order to offer them a full & final settlement, they would then make interest too! (only joking of course, but who knows?).

Please talk this through with a professional advisor first though. Hope you find this useful. Good Luck.

Mark.

-- M Amos (idgroms@hotmail.com), June 28, 2003.