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

Moderators: TalbotWoods, JaneClack

By charlieh34
#2996 Hi can you help me I have had a default for the last 7 years on a RBS card for £4135 after 6 years they sold the debt to someone called 1st Credit they in turn have sent a collection company after me called Connaught Collections whom have now sent me a letter saying that they will issue a statutory demand, what is this? I have written to !st credit and asked if I can pay them £1300 in full and final settlement do you think this was wise. Also I am hoping to apply for a mortgage soon and am aware that the Default will show up but will the stat demand show on any credit application.
thankyou for your time.

Charlie
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By JaneClack
#3001 First Credit do this a lot.

A statutory demand is an official demand for repayment of monies and after this has been issued (21 days from issue) and not complied with the creditor can sue you for bankruptcy. It will not necessarily get this far but is not something you mess around with. Any creditor to whom you owe more than £750 can do this after a default has been issued. There is no need for any county court judgment. Also smaller creditors can club together to do this.

If the stat demand is sent through the post it is usually a warning shot across the bows, as it were. Delivered by hand and they mean business. They are threatening you and are trying to get a knee jerk reaction. I am sure if you could pay them you would but if you offer them a full and final amount you need to get them to put in writing that they will accept the figure as if they just take the £1300 you are still left with more than enough for them to petition for bankruptcy. They are really trying to see if you do have the money or not.

You also mentioned that you had had this default with RBS for 6 years - check this as if they had not gone for court action it may well be that the debt was statute barred anyway. This would have happened if you had had no contact with them for this 6 year period - no inadvertent offers of £10 per month that were not adhered to- and they had not got a CCJ.

I would sort this out before applying for any mortgage and do remember that with this kind of information on your credit file - i.e. defaults and non payments you would probably get no more than an 85% mortgage anyway and it would be loaded interest wise.

Check on your dates but RBS are usually quite canny and deal with First Credit asap. Incidentally Connaught Collections are part of First Credit - one can put you through to the other on the telephone!
By charlieh34
#3045 thankyou Sarah your reply has been very helpful to me they have not answered my letter of an offer of £1300 yet but I hope they accept it. interesting that Connaught collections are part of first credit doesnt suprise me though they all are pretty nasty people making a living out of other peoples misfortunes. Will let you know what happens.

many thanks

Charlie.
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By JaneClack
#3046 Good luck and look forward to hearing from you.
By charlieh34
#3254 Hi Sarah just to let you know I have recieved a letter from Connaught Collections they have accepted my offer of full and final satisfaction of the debt of !£1300 thank goddness. when they recieve my cheque will they mark the default as satisfied on my credit record with experian also they cant come back to me at a later date asking for more money can they.

Thanks charlie.
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By JaneClack
#3257 They cannot come back for any more money if they have put it in writing that they have accepted your full and final offer. So KEEP THE LETTER!

They can put the fact that a reduced sum was paid in full and final settlement on your credit file but that will drop off after six years. They are unlikely to put satisfied I have to say. But that doesn't matter - you don't have to pay them any more money! If you were to ask for more credit now it would have been telling First Credit that you had more money available as you could afford to pay another creditor - that is basically the reason things go on credit files. We may feel it penalizes us but in fact it is to encourage responsible lending -big spenders have the best credit ratings as they have lots of it and are paying the contractual payments. The fact they may be doing this by using one credit card to pay another isn't visible and people get further and further into the mire this way.

Good luck for the future and see, the stat demand didn't lead to bankruptcy. First Credit seem to do this a lot as it provokes some reaction and I am pleased they accepted your offer.