what happens when you are in debt and have no way to pay it back?

Answer 1

join the queue! But you are much better off if you REALLY have no way of paying back. They can't do ANYTHING to you. So just keep whistling a happy tune. You've had the loot and it's gone. They gave it to you and they can sue. But you don't care 'cause you CAN'T pay it back

Answer 2

Go to the citizens advice bureau, every town and city has one these days. nThey will run through your options, if your debts are 5000 pounds or less you can set up an admin order, where you only pay what you can afford, that lasts 3 years then you can start building your credit rating again. Another option is an IVA if youre in a well paid job, and like the other people said Bankruptcy is a last option. Oh I forgot to mention, the C.A.B can write to your creditors on your behalf and make an agreement for small payments to be made. I.E If you owe £200 a month for a loan, but can only afford £6 a month, the C.A.B can make this happen, although you won't be able to get credit until these debts are cleared.

Answer 3

You have two options:

IVA (INDIVIDUAL VOLUNTARY ARRANGEMENT )
An agreement drawn up by a professional between you and your creditors (the nasty people who you owe money to) this can be termed a debt consolidation loan. Take advice from your local Citizens Advice Bureau (NOT answers!)

Bankcruptcy

(from insolvancy helpline Can't be bothered re-typing it)

"What are the implications of bankruptcy?
You lose control of your assets.
You cannot obtain credit for over £250 without the permission from the lender.
You cannot act as a company director.
You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
You may not practice as a Charted Accountant / Lawyer.
You may not act as a Justice of the peace (JP).
You may not become an member of parliament.
You may not become a member of the local authority.
Your credit is affected for many years after the annulment.
You may be publicly examined in court.


What are the advantages of bankruptcy?
For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases).
For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out. "


Bankruptcy is losing some of it's stigma, there is a factoid doing the rounds that the average millionaire has been bankrupt 3.2 times.


Always try to avoid this situation if at all possible,

Answer 4

Do you own an house? If so you have options!!

If Not first thing you should do is contact each of your creditors and explain that you can't afford to pay them back the full amounts they are requesting each month, they may be able to work with you to sort a plan out, failing this contact and IVA debt management company, they will do the leg work for you & it won't cost you anything at all (they get paid by the govt & for each plan they organise no cost is transffered to you).

Try the folowing even if its just for advice:
http://www.cleardebt.com
http://www.debthelp.co.uk
http://debt-sloution.co.uk

These guys could help wirte off upto 70% of the debt owed, opting for bankruptcy is absolutley the last resort.

Answer 5

There is always a way out of your debt! I am sorry to say most of the answers that have been given here are wrong ( sorry ) I am a trained debt adviser (Fully qualified) and will give you some help regards your debt problem.
There are many ways out of debt, you could go for a debt management plan ( DMP ) but if you do go for this go some where free like Here-http://www.cccs.co.uk/ if you own your own property and have debts over £15k and have between £200-£400 per month spare ( after the day to day bills are paid ) then an IVA may be applicable I would recommend here- http://www.debtfreedirect.co.uk/index.php as there are a reputable company. If you have no assets ( house mainley ) then bankruptcy could be your best bet, for this it costs, £475.00 in total but if you are on benefits you can fill in an EX160 form to get back some of the costs ( sorry you will never have all the costs paid for you ) and you can find out more here: http://www.insolvency.gov.uk/
You cannot go to prison for non payment of your debts, the only debt this can happen with is council tax, and then you have to be summoned to a hearing at your local magistrates court and show " wilful neglect", this means basically saying that you can pay the c/tax bill but wont out of choice.
Stay away from these three: Consolidation loan, Managed Loan ( by your bank ) and a secured loan ( secured against your property ) as all these seem like an answer to your problems but infact are not, as the interest rate is usually sky high and as you have now a load of credit cards that have a balance of £0 on them.... most people end up using them again and getting into more debt. Please seek advice from either http://www.cccs.co.uk/ or http://www.citizensadvice.org.uk/ or http://www.payplan.com/ as all are free with no hidden fees, cccs would be the best as payplan you have to meet certain criteria , the CAB are great but usually has a massive waiting list.
Just remember that you are not alone, and there is help out there, please try one of my links above as any one of them WILL help you. If you dont think any of the information that I have given to you is correct/accurate please look it up for yourself, but just remember I have worked in debt advising for many, many years and I know my stuff, working with/helping clients with debt problems every day of the week!
Good luck and remember UNSECURED creditors have no power at all to collect the debt at there worst they can gain a CCJ against you, this is a process where the county court will ask for a financial statement ( budget summery ) and set an agreement with you. And so long as you keep to that agreement you will be ok. the arrangements they set on a ccj are ALLWASE what you can afford.
Hope this helps you or anyone out there with debt problems.
yours:
Chappers

Answer 6

i had a problem with my debts when i lossed my job i phoned my local citizens advice and made an appitment to go and see someone, u take along all the infomation about all the companys that you owe money too they sit down with you and work out all ur normal every day bills gas electric rent etc.... then they work out shopping and other things to see how much money you have left. After this is reached they write to all the companys that u owe money to and offer them an amount that u can offered each month for example i owed a credit card 750.00 they offered 3,10 a month they also get all intersted frozen after a while. They are good and they do help im doing this still
If you declear yourself bank rupt youll never get any thing ever again this way you will still beable to get things in a few years time

Good luck hope it all works out for you

Answer 7

First of all, if you are in the UK, you cannot be sent to jail for failure to pay your debts (except for council tax).

You can and likely will be pursued by debt collectors, who can be pretty intimidating and they may be able to get a court order to take some of your stuff in payment of debt. But this applies to only certain kinds of debts.

Some banks, credit companies etc will work with you to help you pay off what you owe. You can offer to pay 5,10 pounds a month and they are likely to accept this, in order to maintain a relationship with you where you are paying off your debt.

Once you have CCJs (court orders) against you, you will not be able to get credit for anything. If you pay off all your debts, you may then be able to make an application to have your credit restored, but this is likely to take years.

If it hasn't got to that stage yet, act quickly. Contact your debtors, explain that you are temporarily unable to pay, ask for extensions to the pay back time or smaller instalments and get a job, any job!

You should also contact the Citizens Advice Bureau who have good advice and will be able to talk to your debtors, help you write to them and propose payment plans etc.

Good luck - remember, it's only money!

Answer 8

ring creditors explain your position at the moment and they will give you a small amount you can pay. If not and you are on some form of benefits the social will deduct money from your income support or whatever it is called and pay it direct to the creditors, that way you are only paying back the minimum but they are of your back as they are getting something. Otherwise declare yourself bankrupt. Good luck.

Answer 9

Use the link below. It gives tons of advice on debt - including giving details for the National Debtline and Consumer Credit Counselling Service who are professionals who can advice you and help you. Do this before you follow the advice given by others here to file for bankruptcy (do these people realise you have to find a couple of hundred pounds to file for bankruptcy which, if you're broke, you can't do) and certainly don't consider suicide. And good luck.

Answer 10

Try the citizens advice bureau CAB as they have advisers who can mediate on your behalf with the people to whom you owe the money to. They can arrange a way of paying back the debt over an agreed period of time. Please don't do nothing get help before you get in any deeper. Remember, bankruptcy is the last resort

Answer 11

With student loans, you can contact your financer and work out arrangemnts. Student loans can be deferred in cases of unemployment, military service, or enrollment in school.

For the rest of your debt? Some do work with you. Try a credit counseling service. They'll not only help you make your debt manageable with your current financial situation, they can teach you how to manage your money or refer you to someone who can so you don't get in this situation again.

You can be sued by creditors and your paycheck, if you have one, can be garnished. Collateral can be repossessed and sold to pay your debt.