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A family member has some debts to a couple of institutions, and to family members.
They did have a mortgaged house but that is being sold (completion on Monday all being well) which will clear the secured debt with Landmark (NRAM, Northern Rock).
They will still have an unsecured loan with Landmark, this is because their mortgage was set up as a "Together" type of mortgage/loan combination.
They still have a large outstanding balance with a credit card provider which has defaulted. They were assured that payments would be possible when the property was sold, but in the meantime they have placed the debt in the hands of Robinson Way (for management, not sold off).
In addition there is an amount lent by relatives which is equal to or greater than the debt to the combined institutions above. The relatives are not wealthy and need to have the money back.
The family member with the debts is sporadically earning a decent wage but their work is sporadic and not guaranteed. When pro-rata is calculated, it's fairly modest.
So although we're keen to start arranging to pay back the institutions in advance of any court action, we're also keen that the relatives that have lent the money can get a decent chunk of any repayment agreement.
I'm very well versed in helping them to work out income and expenditure and in writing letters to the creditors, so that's fine. But I need to know what proportion of any net income after essential expenditure can be allocated to relatives before the rest is offered as an arrangement to the institutions?
What view would courts be likely to take?
They did have a mortgaged house but that is being sold (completion on Monday all being well) which will clear the secured debt with Landmark (NRAM, Northern Rock).
They will still have an unsecured loan with Landmark, this is because their mortgage was set up as a "Together" type of mortgage/loan combination.
They still have a large outstanding balance with a credit card provider which has defaulted. They were assured that payments would be possible when the property was sold, but in the meantime they have placed the debt in the hands of Robinson Way (for management, not sold off).
In addition there is an amount lent by relatives which is equal to or greater than the debt to the combined institutions above. The relatives are not wealthy and need to have the money back.
The family member with the debts is sporadically earning a decent wage but their work is sporadic and not guaranteed. When pro-rata is calculated, it's fairly modest.
So although we're keen to start arranging to pay back the institutions in advance of any court action, we're also keen that the relatives that have lent the money can get a decent chunk of any repayment agreement.
I'm very well versed in helping them to work out income and expenditure and in writing letters to the creditors, so that's fine. But I need to know what proportion of any net income after essential expenditure can be allocated to relatives before the rest is offered as an arrangement to the institutions?
What view would courts be likely to take?
