Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By Baron
#1578 Hi all,

Firstly can I say what a great site this and thanks to all the people who respond to questions like the one I’m going to post today.

It’s like a weight being lifted off your shoulder…

Well here go’s.

I had a CC from AMEX and the total outstanding balance was £12433.53 I had a bad patch for 3 months, which during the time I contacted them and asked them if they would take reduced payments. I even made some.

How I received a letter on the 21 September informing me they had cancelled my card and passed on my debt to a DCA. The following day I received a letter from them demanding the full payment plus £2063.97 in fees bringing the total to £14497.50.

I contacted them and offered to pay some kind of payments. They informed me I would have to pay the full amount.

I don’t have this money.

I received another letter from them dated 29th September with a heading of LEGAL ACTION. Inform me that if they did not receive payment in full for total amount within 5 days they would start legal action. And they inform me in bold this may include bankruptcy.

I’m not behind on any other cards, mortgage etc. I rung them up and offered to pay them £400 a month to clear this. This was more than my minimum payment with AMEX. They just laughed and told me it would not cover the interest!

Again they told me to look for a loan and also said they would need a payment of at least £1000.00 in the next couple of days to hold of the legal action.

I’m at my wits end. I own a house that’s in my name and live in it with my wife and two young children and I have equity in my home. My partner does not work so she could not purchase my part of the home.

I’m afraid that AMEX will make me bankrupt, has anyone had any dealings with AMEX? Will they do this?

Should the DCA accept my offer of payments?

If I was taken to court for bankruptcy would a judge make me bankrupt?

I really don’t want to lose my house and I’ve looking at taking out a secured loan to stop this. Is there any other route I can take? I’ve tried speaking to AMEX but they tell me the DCA is now dealing with the issue.

I’m sorry this is so long, but it feels good getting this off my shoulders and speak to people who can help and to others whom have been in the same boat as myself.

Many thanks for your time in reading this. :twisted:
By Baron
#1581 Sorry just read my post for some might think that CC was county court it's in fast a credit card.

My fault..

:oops:
User avatar
By Nicky
#1589 Hi there

Sorry to hear about your situation first of all.

In order for a Court to make a Bankruptcy Order, the creditor would need to prove that you were unable to make reasonable payments towards your debt. If you are currently managing the majority of your other debts and have made a reasonable offer (which you have) to this creditor, I cannot see any reason why the Court would believe that you need to be made bankrupt.

I would make an offer you CAN afford (not one that is going to make you struggle) and stick with it. It is possible that this creditor is trying scare tactics on you in order to try to make you pay.

It is totally rediculous for this creditor to expect you to pay the full amount in one lump sum and believe me, they know it! You going out borrowing more money to pay this debt off is just what this creditor wants, except they know full well that it would be out of order for them to openly say this, if they did that, they would be acting against the protection you have by the Office of Fair Trading! (some creditors do however, expecting you not to know your rights, and in lots of cases, people dont!)

If you feel you would benefit from talking to an advisor regarding your situation, there are plenty of good money advisors who can help you, free of charge!

You could either contact your local CAB, or if you feel better talking over the phone, Debt Clinic/FCL will be able to help. 0800 716239. There are other people to contact, such as National Debt Line..e.t.c. At least if you had a chat with someone about this, your mind would be put at rest and you would be clearer on what the situation is.

Some creds can get totally out of order in the things they say in order to make you panic, most of the time, it is all BS!

If you have any more concerns or questions about anything, please dont hesitate to ask. There are plenty of people here who will offer you their support in this situation you are going through.

All the best.
By Baron
#1593 Nicky,

Many thanks for your reply. It has helped easy my mind a little bit. However I’m still up and can’t sleeping thinking of this problem.

The collection agency did tell me on the phone to take a loan out to clear this debt, I only wish I was able to tape them saying that to me.

I’m worried that AMEX will go down the route to make me bankrupt.

How long will I have before I know they are going to do this?

Can they issue a statutory demand? As a scare tactic and not make me bankrupt?

Or is it once this is issued the next step will be bankrupt? By that I mean they must follow on the process from the statutory demand?

What I don’t want to do is lose my house. I have two young children and really love the house. Not having any issues in paying the mortgage etc. I know taking out a loan is not the best thing but sometimes it may be the only way if they won’t accept a payment plan.

I will be sending them a chq next week with the amount I want to pay each month and will continue doing so.

The company in question is called Newman have anyone had any dealings with this debt collection agency?

And again has anyone had American Express making them bankrupt?

Nicky I really hope you can answer the question about the statutory demand. You guys really are saints!

Once again many many thanks
User avatar
By Nicky
#1601 http://www.oft.gov.uk/NR/rdonlyres/9018 ... oft611.pdf

This link will inform you of what you are protected against from creditors unfair tactics. Read it, learn it, you can then inform the creditors when they step out of line you know your rights, and you are going to be reporting them to the Office of Fair Trading for unfair practices!

I think you need to understand that just because a creditor can petition for Bankruptcy, does NOT mean you will be made bankrupt. From what you have said, you ARE able to pay your debts or at least make reasonable offers of repayments. The court will see this and will basically tell the creditor to consider your offer. Courts dont make people bankrupt just for the sake of it, the creditor MUST PROVE to the court that you cannot pay your debts, this is not the case. If this creditor persists that they wont accept your offer, they will just try to take legal action anyway, at least if you do have a Statutory Demand, you will be able to make an offer through the court and as long as you stick to the arrangement, nothing further can happen.

The collection agency are bang out of order for telling you to raise funds by further borrowing! This is what I mean about them relying on you not to know your rights, and in most cases, they dont know either, but what they dont realise, (or some do) is that if this is the way they run their business and people complain to the OFT, and the OFT investigate their company, they are risking loosing their Consumer Credit Licence which will put them out of business, that why I encourage everybody to read The Office of Fair Trading Debt Collection guide.

This creditor has you thinking they own you and can do to you whatever they want, basically, your life is in their hands! That is utter rubbish, except, that is exactly how they make you feel, yet that is exactly how they are not allowed to make you feel!

I’m not behind on any other cards, mortgage etc. I rung them up and offered to pay them £400 a month to clear this. This was more than my minimum payment with AMEX. They just laughed and told me it would not cover the interest!


If this creditor decides to try and make you bankrupt :roll: I have a feeling the courts won't be too pleased for this creditor waisting their time!

Don't let them call your bluff, and DON'T take out further credit to pay this debt, just imaging the bonus they will get in their pocket if you do, that should hopefully put you off!
User avatar
By JaneClack
#1632 If anyone ever suggests you take out a loan to pay off a credit card when you have already told them you cannot afford the full payments they are asking you to commit fraud. Always take the name of the person you are talking to and if they do this again say you will be speaking to Trading Standards. American Express used to be a creditor that went for the jugular with bankruptcy but they do not seem to be doing so nowadays. Anyway in most cases they end up with nothing and have written off their debt! Stat demands are more often than not issued when clients do not make any contact and then they get the knee jerk reaction they are looking for - the majority do not lead to bankruptcy but must not be ignored. Stand firm!
By Del500
#1647 We it may, or may not be, some consolation to you that you are not the only one.

I should point out to avoid any confusion, that it is my American Express Blue Credit Card that is of the issue here. I am aware that the amex charge cards are not considered under the same rules as credit cards. But it is definitely the credit card that I am talking about here.

I also received a Notice of Cancellation form American Express on the 29th Sept 04. This letter stated that "All monies outstanding on the account (including any new transactions or cash advances) are now payable in full." and that "Your account has been passed to a debt collection agency."

This I consider excessive action considering
- The amount in arrears is only £208.43
- I had already contacted them and informed them of my current situation and explained that I would be seeking advice.
- I had a good payment record with this firm up to this point.
- Other creditors have responded favorable to my letters. Amex is the only black sheep. (so far)

The very next day I got a letter form a Debt Collection Agency. They are demanding the full balance on my card of approx £7,000 plus they have added a Collection Fee in excess of £1,180. They demand the full amount within 30 days. They sign off with the words "Failure to do this will result in your account being processed for LEGAL ACTION." (the capitalisation is as per their letter).

Now I have done a bit of research here (great forum btw). I found another post refer to the Office of fair trading document oft611 and after reading this and doing some more digging I found oft664 entitle "Debt Collection Guidance" (these and other OFT docutments can be downloads as pdf files here http://www.oft.gov.uk/News/Publications/ - Not the best laid out page but search down the list till you find the document numbers I am referring to here). This document details some things that the OFT think is unfair. If I may quote a couple of paragraphs:

oft664 under the title "Physical/Physiological harassment"
2.6 Examples of unfair practice are as follows:
...
f. pressurising debtors to pay in full, in unreasonably large installments or to increase payments when they are unable to do so.

IMHO, the practice followed by American Express and this DCA are exactly what OFT664 document says they must not do.


I am also very interested in the fact that Barron has been requested to pay £2063.97 when I have only been charge £1180ish. I am extremely keen to know if the DCA that is pursuing Barron is the same firm as is dealing with my account. If so there is another point in OFT664 and it is repeated from OFT298 "Debt Collection Practices" sections 1.10 to 1.13 "Debt Collection Charges". If I may quote form the pages again:

OFT664 Charging for debt collection.
2.9 Charges should not be levied unfairly.
2.10 Examples of unfair practice are as follows:
...
d. Applying unreasonable charges. e.g. charges not based on actual and necessary costs.


Reading section 2.9 you think, "Well Barron owes more than I do so must be due for higher charges." But when you read section 2.10.d it becomes clear that charges must be based on the costs of debt recover - Not, IMHO, the size of the debt. Why should Barron's debt cost more than mine to recover. What are these costs based on. Is it just based on how much we owe? Or is Barron going to get send more demand letters than I am and so cost more in postage. I am being flippant but my point is serrious. They are not supposed to just pick numbers out of thin air.

They are also required to specify the amount of any charges in the credit agreement. I will be sending amex a letter asking for a copy of the credit agreement. Which they are legally obliged to supply on request.

Since I got this letter at the weekend, I have not yet had the pleasure of discussing things with the DCA yet. so they have not put their foot in any further than discussed above. But for Barron's assistance, read OFT664 sections 2.6 b and f, 2.8 f and g, section 2.9 and section 2.10. They should not have told you to take out additional debt. Also they are obliged to refer on to the creditor any reasonable offers to pay by installments. Surely your offer of paying £400 per month must be considered reasonable.

Also don't offer to pay more than you can afford. It would be unreasonable of you to pay more to amex than other debtors simply due to amex shouting loudest. You should contact an adviser agency (e.g. Citizens Advice Bureau) who will help you draw up a budget of your income, priority expenditure and other commitments in a manor that ensures you are treating each creditor fairly and also is within you budget to keep up payments. Apparently the courts would do the same calculation in a similar manor and take a dim view of creditors who proceed to legal action when a reasonable budgeted payment plan has already been offered.

If I may repeat my self - I am very interesting in discussing this further with Barron as we both seem to be in the same boat at the same time. I am also interested in hearing form any other forum members who have or are having a similar experience with American Express and their DCA. I believe Amex and the DCA are acting improperly and we have more chance of making a collective voice heard than if stand alone.
ByDavidc
#1648
Del500 wrote:We it may, or may not be, some consolation to you that you are not the only one.

I should point out to avoid any confusion, that it is my American Express Blue Credit Card that is of the issue here. I am aware that the amex charge cards are not considered under the same rules as credit cards. But it is definitely the credit card that I am talking about here.

I also received a Notice of Cancellation form American Express on the 29th Sept 04. This letter stated that "All monies outstanding on the account (including any new transactions or cash advances) are now payable in full." and that "Your account has been passed to a debt collection agency."

This I consider excessive action considering
- The amount in arrears is only £208.43
- I had already contacted them and informed them of my current situation and explained that I would be seeking advice.
- I had a good payment record with this firm up to this point.
- Other creditors have responded favorable to my letters. Amex is the only black sheep. (so far)

The very next day I got a letter form a Debt Collection Agency. They are demanding the full balance on my card of approx £7,000 plus they have added a Collection Fee in excess of £1,180. They demand the full amount within 30 days. They sign off with the words "Failure to do this will result in your account being processed for LEGAL ACTION." (the capitalisation is as per their letter).

Now I have done a bit of research here (great forum btw). I found another post refer to the Office of fair trading document oft611 and after reading this and doing some more digging I found oft664 entitle "Debt Collection Guidance" (these and other OFT docutments can be downloads as pdf files here http://www.oft.gov.uk/News/Publications/ - Not the best laid out page but search down the list till you find the document numbers I am referring to here). This document details some things that the OFT think is unfair. If I may quote a couple of paragraphs:

oft664 under the title "Physical/Physiological harassment"
2.6 Examples of unfair practice are as follows:
...
f. pressurising debtors to pay in full, in unreasonably large installments or to increase payments when they are unable to do so.

IMHO, the practice followed by American Express and this DCA are exactly what OFT664 document says they must not do.


I am also very interested in the fact that Barron has been requested to pay £2063.97 when I have only been charge £1180ish. I am extremely keen to know if the DCA that is pursuing Barron is the same firm as is dealing with my account. If so there is another point in OFT664 and it is repeated from OFT298 "Debt Collection Practices" sections 1.10 to 1.13 "Debt Collection Charges". If I may quote form the pages again:

OFT664 Charging for debt collection.
2.9 Charges should not be levied unfairly.
2.10 Examples of unfair practice are as follows:
...
d. Applying unreasonable charges. e.g. charges not based on actual and necessary costs.


Reading section 2.9 you think, "Well Barron owes more than I do so must be due for higher charges." But when you read section 2.10.d it becomes clear that charges must be based on the costs of debt recover - Not, IMHO, the size of the debt. Why should Barron's debt cost more than mine to recover. What are these costs based on. Is it just based on how much we owe? Or is Barron going to get send more demand letters than I am and so cost more in postage. I am being flippant but my point is serrious. They are not supposed to just pick numbers out of thin air.

They are also required to specify the amount of any charges in the credit agreement. I will be sending amex a letter asking for a copy of the credit agreement. Which they are legally obliged to supply on request.

Since I got this letter at the weekend, I have not yet had the pleasure of discussing things with the DCA yet. so they have not put their foot in any further than discussed above. But for Barron's assistance, read OFT664 sections 2.6 b and f, 2.8 f and g, section 2.9 and section 2.10. They should not have told you to take out additional debt. Also they are obliged to refer on to the creditor any reasonable offers to pay by installments. Surely your offer of paying £400 per month must be considered reasonable.

Also don't offer to pay more than you can afford. It would be unreasonable of you to pay more to amex than other debtors simply due to amex shouting loudest. You should contact an adviser agency (e.g. Citizens Advice Bureau) who will help you draw up a budget of your income, priority expenditure and other commitments in a manor that ensures you are treating each creditor fairly and also is within you budget to keep up payments. Apparently the courts would do the same calculation in a similar manor and take a dim view of creditors who proceed to legal action when a reasonable budgeted payment plan has already been offered.

If I may repeat my self - I am very interesting in discussing this further with Barron as we both seem to be in the same boat at the same time. I am also interested in hearing form any other forum members who have or are having a similar experience with American Express and their DCA. I believe Amex and the DCA are acting improperly and we have more chance of making a collective voice heard than if stand alone.


All very good points, however do not expect the OFT to do anything they are a damp squid and will do nothing.
David
User avatar
By Nicky
#1650
All very good points, however do not expect the OFT to do anything they are a damp squid and will do nothing.
David


Actually, I have known the OFT to investigate companies due to peoples reports on companies. I can see that sometimes it may appear that they do nothing, but, if enough people make reports about a company, showing proof of misconduct e.t.c. this will warrant an investigation. Not only that, if a company is aware that a case is being made against them, this in turn affects how they run their business, this I have seen also.

It certainly is not a waste of time to gather information on a company who use bad practice techniques to recover debt. It really is a serious issue that must be addressed and is nothing to be taken lightly. The OFT set out these rules for the protection of consumers, if the creditors dont abide by these, then they are in turn, risking loosing their consumer credit licence.

I'm not saying it is an easy thing to accomplish to get the OFT to act (which is why it would appear that they dont do anything), but, if enough evidence is put infront of them, they can't ignore it, and they will conduct an investigation. Another thing to take into account is, how many people before you have made complaints about these different companies? Everything is logged.
By mrsmith
#1834 tell the DCA you are going to complan to OFT. I did. They passed back to AMEX and they then treated me better, and dropped DCA costs. They then passed me to a firm called RESOLVE who are more sympathetic than DCA
User avatar
By JaneClack
#1849 Nice to hear you took affirmative action and it worked!
By Sussex Guy
#2476 I am currently being made bankrupt in the new year by American Express,back in May of this year I ran into financial difficulties,I had a Amex charge card and an Amex credit card the credit card was paid each and every month and the charge card I used to pay the whole amount each month unfortunately this one particular month i was unable to pay the whole balance off at once.... I was contacted by a collection agent of Amex in May who gave me some very simple advise,pay as much as I could afford to pay each month,I have been paying £1000 without fail the same date each month since May altogether I have paid the total sum of £7000,the debt outstanding was approx £7000 at the outset I have now found out that the debt has arisen to over £12000 and still having charges added left right and centre by Amex Solicitors Jeffrey Green Russell of London...I have pleaded with them throughout to no avail !! constantly requesting a detailed breakdown of how they arrived at the charges,Is there anyone else out there that has had the same problem and what i should do now ?? :x :evil:
ByDavidc
#2479
Sussex Guy wrote:I am currently being made bankrupt in the new year by American Express,back in May of this year I ran into financial difficulties,I had a Amex charge card and an Amex credit card the credit card was paid each and every month and the charge card I used to pay the whole amount each month unfortunately this one particular month i was unable to pay the whole balance off at once.... I was contacted by a collection agent of Amex in May who gave me some very simple advise,pay as much as I could afford to pay each month,I have been paying £1000 without fail the same date each month since May altogether I have paid the total sum of £7000,the debt outstanding was approx £7000 at the outset I have now found out that the debt has arisen to over £12000 and still having charges added left right and centre by Amex Solicitors Jeffrey Green Russell of London...I have pleaded with them throughout to no avail !! constantly requesting a detailed breakdown of how they arrived at the charges,Is there anyone else out there that has had the same problem and what i should do now ?? :x :evil:


Have you actually been served with a petition?
User avatar
By Nicky
#2482 You are currently being made bankrupt in the New Year? Who has told you that? Or has this company made you believe you are going to be made bankrupt to scare you into paying more money?

I would take advice from the things that have already been posted in this thread, and look at the links provided so that you know what your rights are and then put them down on paper and send it off to this creditor. They really do try it on with people, they have a bad reputation when it comes to people who struggle to make their repayments, but if you inform them that you know your rights, and you will be making a complaint along with possibly a fair few other people, to Trading Standards, they may rethink their underhand tactics and act in more of a human way.

They seem to get people running round like scared rabbits wondering what is going to happen next, and its totally out of order, they obviously believe they have some kind of power over people who owe them money, when the reality is, they have none whatsoever! :evil:
By Sussex Guy
#2485 Thanks for that...

Yes I have received a petition and the hearing is the end of January 2005
I also received a Statutory Demand and made an application to the court which unfortunately was thrown out...
What I cannot believe is that I had this phone call back in May (and had a witness to the phone call) that I should pay as much as I could each month and have been doing so religiously at a rate of £1000 per month on the same day each month...What will happen at the hearing, how will the judge look upon this that i have been paying this amount to reduce the debt each month ?
What can be done with this collection agent who have been aggressive,rude and have put so much pressure on me that I at one point felt I could not go on any more ?
Am in withing my rights to ask for a detailed breakdown of the charges and interest applied to the account ? :x