Write off unsecured debt

[golfillini]

Hello all

Can anyone advise me as to the chances that my unsecured creditors would write off my debt to them due to financial hardship.

I have in place an informal arrangement with all my unsecured creditors. This has been in place since 2009. I have kept up with my agreed monthly payments, but my circumstances are about to change for the worse.

I thought i read somewhere that if you could prove financial hardship then there is a chance your debt could be written off.

Any advice would be appreciated

[labman]

Re: Write off unsecured debt

How much is the debt for? Who is it owed to? Do you have supporting medical evidence for your financial hardship? Is your DMP self managed or through a registered debt organisation?

These and other things will have a bearing on the answer to your question. You are, however, right in stating that the Lending Code (Section 9) talks about debts being written off in cases of financial hardship.

In reality, it does happen, and there's certainly no harm in asking, but it is not something they do lightly.

[golfillini]

Re: Write off unsecured debt

Hello Labman

My arrangement is a self managing one. I have no telephone contact with my creditors. All contact is via correspondance.

My wife has a documented long term Chronic illness which is steadily worsening. The stress and the worry of her illness and job problems with regards no pay rises for nearly 4 years, the huge increases in fuel ( i commute 125 miles round trip to work daily ) have left us with no surplus income to either increase our monthly payments or carry on paying them.

One glimmer of hope is a third party has offered us a lump sum to settle these debts, but this lump sum equates to only 20% of total debt owed. So not sure it is worth taking this money as the creditors might not take such a loww settlement.

As you see i am a little in the dark with regards how all this works.

[labman]

Re: Write off unsecured debt

Forgive me probing a bit, but I am trying to help. Is her illness a physical illness or a mental illness?

[CleverClogs]

Re: Write off unsecured debt

Forgive me probing a bit, but I am trying to help. Is her illness a physical illness or a mental illness?

Why does that matter?

[labman]

Re: Write off unsecured debt

Why does that matter?

Because there are a set of forms produced by MALG which, if you can arrange through a DMP provider, can be completed by your medics as supporting evidence to help debt negotiations for people with Mental Health issues.

I used them recently to have a £12000 debt written off for a client, though I have to admit every other time I've used them has been less than productive. Nevertheless - we must use all the tools in our armoury.

[golfillini]

Re: Write off unsecured debt

She has Chronic Fatigue Syndrome( ME ) which was originally diagnosed over 10 years ago. Since being diagnosed she has had to give up her career and is now receiving medical insurance.

[labman]

Re: Write off unsecured debt

Hi,

I would say write a carefully worded letter pointing out their obligations to at least consider writing the debt off. If you don't ask, you certainly won't get.

A common response is that the Lending Code is not legislation, so they are under no obligation to write off your debt. I always follow this response with an official complaint to the CEO asking why they are subscribed to it if they have no intention of abiding by it, and politely accusing them of just paying lip service to it in order to look good in their advertising.

Also look at the OFT Debt Collection Guidelines and see what you can draw from there.

I know CFS often has mental health issues in terms of depression etc... as one of its symptoms. If your wife has these, it would be worth getting the MALG forms completed:

http://www.malg.org.uk/DMHEF-FORM-for%20advisers.pdf

[CleverClogs]

Re: Write off unsecured debt

I know CFS often has mental health issues in terms of depression etc... as one of its symptoms. If your wife has these, it would be worth getting the MALG forms completed

If she doesn't have depression after 10 years of CFS, I'd like to know how! :tinysmile_grin_t:

[golfillini]

Re: Write off unsecured debt

Likewise, but she tries to hide her low moods as best as possible. Not sure what MALG forms are can you enlighten me

[labman]

Re: Write off unsecured debt

There was a link to them in my last post. They're forms which can be completed by a medic to confirm a mental health condition when negotiating with creditors. Have a look at them and you'll get a feel for them. :beagle: