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Below is a simplified TRUE story.
In recent weeks, I have been instructed or involved in 3 cases that have gone way beyond a statutory demand. For many reasons the 'debtor' failed to get the stat demand set aside. But in one of the cases I'm tackling, she didn't find out until the Land Registry contacted her.
I am genuinely shocked to discover that the REAL danger is not only your petitioning creditor like Lowell.....but very often, the real nasty guy is the Insolvency Practitioner instructed by the Official Receiver after you are bankrupted. Even for a simple bankruptcy, their fees run into tens of thousands of pounds.
"Alex" takes out a Capital One credit card. Alex then loses his job and is unable to pay the £1600 outstanding balance beyond token £1 payments.
Capital One decide they don't want £1 token payments, so they default Alex and sell his debt to a debt purchaser called Lowell Portfolio 1 Ltd. The sale price is confidential but insider leaks suggest it is anything from £16 to £80.
Capital One then write that debt off against tax and gain tax relief on their other gargantuan profits.
Lowell Portfolio start hassling Alex who is unable to pay.
Lowell Portfolio then issue a bankruptcy petition against Alex because they know he owns a small property from checking his credit file.
Because Alex is not legally minded, has no money and can't get legal support, he is bankrupted for only £1600.
THEN…....................it gets really bad
As Alex is bankrupt, the Official Receiver appoints a Trustee. This Trustee is a professional insolvency practitioner and 'takes over' Alex's financial affairs.
Six months later, Alex's meagre property is disposed of in a forced sale, he had equity of about £50,000.
The receivers fees for handling his affairs now top £30,000 and Lowells fees are over £7000.
So for a small debt of £1600, a man can be bankrupted, be asset stripped, lose his home and consequently become dependent on the State; whereas previously, he was in secure accommodation and likely to become re-employed.
So us tax payers pick up the bill at Capital One's end and then at Lowell & the Insolvency Practitioners end once they've finished asset stripping him.
I would like to gauge support for a petition and a concerted campaign against the use of the Insolvency process by debt purchasers pursuing consumer credit type debt. I would also like to protest at the use of 'rolling up' multiple small debts into one stat demand.
A debt like the one described above could very easily be dealt with via a Charging Order if the debt was enforceable, yet because of blatant abuse of the insolvency process by debt purchasers, a small debt can demolish someones life, just when they are at their most vulnerable.
And the worst bit...........the Judges willingly assist them along the way :incourt:
In recent weeks, I have been instructed or involved in 3 cases that have gone way beyond a statutory demand. For many reasons the 'debtor' failed to get the stat demand set aside. But in one of the cases I'm tackling, she didn't find out until the Land Registry contacted her.
I am genuinely shocked to discover that the REAL danger is not only your petitioning creditor like Lowell.....but very often, the real nasty guy is the Insolvency Practitioner instructed by the Official Receiver after you are bankrupted. Even for a simple bankruptcy, their fees run into tens of thousands of pounds.
"Alex" takes out a Capital One credit card. Alex then loses his job and is unable to pay the £1600 outstanding balance beyond token £1 payments.
Capital One decide they don't want £1 token payments, so they default Alex and sell his debt to a debt purchaser called Lowell Portfolio 1 Ltd. The sale price is confidential but insider leaks suggest it is anything from £16 to £80.
Capital One then write that debt off against tax and gain tax relief on their other gargantuan profits.
Lowell Portfolio start hassling Alex who is unable to pay.
Lowell Portfolio then issue a bankruptcy petition against Alex because they know he owns a small property from checking his credit file.
Because Alex is not legally minded, has no money and can't get legal support, he is bankrupted for only £1600.
THEN…....................it gets really bad
As Alex is bankrupt, the Official Receiver appoints a Trustee. This Trustee is a professional insolvency practitioner and 'takes over' Alex's financial affairs.
Six months later, Alex's meagre property is disposed of in a forced sale, he had equity of about £50,000.
The receivers fees for handling his affairs now top £30,000 and Lowells fees are over £7000.
So for a small debt of £1600, a man can be bankrupted, be asset stripped, lose his home and consequently become dependent on the State; whereas previously, he was in secure accommodation and likely to become re-employed.
So us tax payers pick up the bill at Capital One's end and then at Lowell & the Insolvency Practitioners end once they've finished asset stripping him.
I would like to gauge support for a petition and a concerted campaign against the use of the Insolvency process by debt purchasers pursuing consumer credit type debt. I would also like to protest at the use of 'rolling up' multiple small debts into one stat demand.
A debt like the one described above could very easily be dealt with via a Charging Order if the debt was enforceable, yet because of blatant abuse of the insolvency process by debt purchasers, a small debt can demolish someones life, just when they are at their most vulnerable.
And the worst bit...........the Judges willingly assist them along the way :incourt:
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