A reader asked: I know a debt drops off my credit file 6 years after it was settled or defaulted. I just want to ask when I apply for a mortgage, can the lender dig up unpaid debts if they are no longer showing on my credit report? This is a common question. The answer is Yes, sometimes because a lender can see other information that may show the debts. Let's look at what the lender can see, … [Read more...]
Is your pension safe if you go bankrupt?
If you expect to go bankrupt soon you may be worried about whether your pension will be safe. The Insolvency Service published a summary of its new guidance on pensions and bankruptcy in England and Wales in 2015 after the "Pension Freedom" changes that year made it possible for many people to take money out of their pension from age 55, even if they are still working. There was some legal … [Read more...]
Holding Money & Debt up to the Light: Transparency and the Standard Financial Statement
This is a guest post by Dr Joseph Spooner, Assistant Professor of Insolvency Law at the LSE and the author of Bankruptcy – the Case for Relief in an Economy of Debt. He had previously worked at the Law Reform Commission of Ireland, where his papers influenced the enactment of the Irish Personal Insolvency Act 2012. Systems for addressing difficulties of over-indebted households in England … [Read more...]
Can guarantor loans be included in DRO / IVA / bankruptcy ?
A reader asked: I have 5k debts and I’m now on ESA. I'm also a guarantor for my mum's Amigo loan - could that be included in a Debt Relief Order (DRO)? There are three types of personal insolvency in England: bankruptcy, IVAs and DROs. Normally if a debt can be included in one form of insolvency, the same applies to the other two. But for guarantor loans, it's more complicated. So this … [Read more...]
“£20,000 credit card debt due to gambling – what should I do?”
A reader asked: "I have nearly £20,000 in credit card debts due to 8 years of gambling addiction. I asked several times to lower my interest, defaulted a couple of times and also they could see gambling on my account yet they still increased my credit limits. I was taking cash advances to pay for food. I have not gambled for 18 months now, but I am left with this horrible debt that I cannot … [Read more...]
How to complain when you are the guarantor for a loan
UPDATE: Do not use the template on this page for Amigo, Buddy, George Banco, Trust Two, Glo. It is now too late to complain about them. For TFS see TFS Loans goes into administration. If you are a guarantor for a loan you can ask to be removed as the guarantor: if you couldn't afford to repay the loan without difficulty; or you were pressured into becoming the guarantor; or … [Read more...]
“Lender says I lied – what should I do?”
Some lenders responding to affordability complaints by saying your application wasn't accurate about your income or expenses when you took out the loans. They are doing this to try to put you off taking your case to the Financial Ombudsman. That may save them a lot of money! Let's see why applications may have been inaccurate and whether this is a problem for your complaint. Most of the … [Read more...]
Why the Ombudsman released a guarantor from a loan
The Financial Ombudsman (FOS) has recently published two important decisions about guarantor loans, one where a borrower complained and one where the guarantor complained. I have covered the borrower case here: Ombudsman – Amigo did not check properly that a borrower could afford the loan. This article looks at the FOS decision about the guarantor for a loan. I have selected points from the … [Read more...]
Ombudsman – Amigo did not check properly that a borrower could afford the loan
The Financial Ombudsman (FOS) has recently published its decision on Miss G's complaint against Amigo. This FOS decision criticised Amigo's inadequate assessment of Miss G's income and expenses. It said her poor credit record meant Amigo should have verified the figures, for example by looking at bank statements. So FOS ordered Amigo to refund all the interest and charges she paid, plus 8% … [Read more...]
Letters from Reunite or Prime Location Services – be careful
This article covers letters from Reunite (website: reunitemenow.com) and Prime Location Services (website: primelocationservices.co.uk). Both firms send "tracing letters", trying to find someone, without saying anything about why they are trying to contact you. Both have links with Global Debt Recovery, who are a debt collector. Reunite A typical letter from Reunite says: We require your … [Read more...]
“What if I forgot to put a debt on my bankruptcy application?”
A reader asked: I am thinking of filing for bankruptcy. Some of my debts go back quite few years. I tried a DMP and an IVA that failed. I’m behind on my household Bills too. I’m single mum and find hard to cope with all this stress. I finally plucked the courage to do the form. I have at least 13 creditors, some of these details I took off my IVA creditors list but some have passed the debts … [Read more...]
“What happens to a DRO if I move in with a new partner?”
A reader asked: I’m a single parent and have had about 10k of debts in a debt management plan for several years. I’m on low income and it looks like it will never end plus I have got some further debts. Now I’m considering a Debt Relief Order (DRO). But I met someone and I’m thinking about starting to live together. I don’t want to tell him about my debts and really want to sort this out … [Read more...]
Going bankrupt in England and Wales – a checklist
Most people find going bankrupt is stressful. Although afterwards it is usually much easier than you have expected, at the time there seems to be so much to get right. Here is a checklist, covering everything you need to do before submit your bankruptcy application. The good news is that this is now all much simpler than it used to be. A few years ago you had to go to court with three copies … [Read more...]
Guarantor loans – why guarantors & borrowers need extra protection
Guarantor loans are coming into the regulatory spotlight. The FCA wrote to CEOs in March 2019 saying it will be looking at affordability and whether potential guarantors have enough information to understand how likely it is that they may have to make the loan payments. In a speech, Jonathan Davis said: Recent work we have done in this area showed that many guarantors are making at least 1 … [Read more...]
Are you worried about a charging order?
Can your house really be at risk if you get into difficulties repaying something like a credit card bill? You might think the answer is "no", but there are some very rare situations where this can happen. It helps to know the facts, so you can make good decisions about how to deal with your debts. To be able to sell your house a creditor has to: start by getting a County Court Judgment … [Read more...]
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