Due to a debilitating spinal problem it looks like I will soon need to go on long-term sick leave from work, or register as disabled. I am in approximately 30K of debt (largely from having paid for private medical treatment). Is there another option than going bankrupt if I have to leave work?
February 9th, 2010 at 9:15 am
It’s possible to negotiate with your creditors, for
a, very small regular repayments
or
b. To write the debt off totally.
Most creditors will realise the futility of chasing you through the courts, if, when presented with all the facts, it’s obvious you cannot pay.
I’ve done this for a friend in similar circumstances. You’d be amazed how lenient, if your case is genuine, these companies can be.
February 9th, 2010 at 9:15 am
Debt management is an option
This is where a management company will negotiate with your creditors on your behave to agree to a lower payment due to your circumstances
Or an IVA
Contact CAB for more advice
February 9th, 2010 at 9:15 am
You will need to set up an IVA,citizens advice would help you with it,basically they contact all your debtors and get some of the debts written off,then arrange a small payment whereby you only pay the debt and not the interest.
IVA’s were set up by the government to help people in debt to get out of it,you wont be able to get any more until your IVA is paid off.
February 9th, 2010 at 9:15 am
If you go on social security disability you are usually considered "judgment proof". The credit card companies cannot sue you. If you go on short term disability, you can talk to the credit card compaies and perhaps make a deal with them. Some will accept lower payments or stop interest. Working with consumer credit counseling is not recommended. The CCCS agencies sell your accounts between them, they do not have your best interest at heart and in addition, it goes on your credit and gives you as bad of a black mark as bankruptcy. Also, if for some reason you stop working with CCCS at any time, the credit card companies usually will not work with another CCCS agency on your behalf for 7 years.
I recommend if you go on SSDI to write to them and tell them the situation. There is little they can do. If you go on short term, then write to them and explain the situtation and make token payments until can pay it in full and if you think you will never be able to, the file bankruptcy. A bankruptcy due to medical bills is seen as a little differently since it is medical.
If you do file bankruptcy, keep your paperwork so you can show people that most of the creditors listed were medical facilities. This will usually help anyone that might be interested in your credit.
I hope this helps.
February 9th, 2010 at 9:15 am
When I had to be off work through a spinal injury, I had to wait three months I think it was to be able to claim through the credit card insurance to pay off my credit card. During this time I only repaid the minimum repayment allowed so as not to breach the card agreements. You could try this route for any credit cards. Other debts may have an insurance to cover illness etc. so it would be worth checking this out. check with your local C.A.B. office for advise for debt management. What ever you do try not to go down the bankruptcy route as you will have greater problems in the future due to the nil credit rating that you will get. Best of luck as I know how worrying this can be.
February 9th, 2010 at 9:15 am
Hi
For an IVA you need to have regular income and a disposable income so if you do leave work it would be a problem. Your best options would be either debt management or bankrupcy. What dont you like about bankrupcy, any of these options will damage your credit rating . If you own property then understandably bankrupcy could lose you your home so be very careful. If you dont it may be a an option. Dmp is to make reduced payments and possibly with creditor agreement interest frozen, but you would still pay all of the debt back, it will just take longer.
All the best
February 9th, 2010 at 9:15 am
You don’t say if the debt is due to a loan which you took out to pay for your treatment, if it is then check your agreement. Very often you may find that there will be an insurance level (if you were asked) at the time of taking the loan. If you have such an agreement then in the event of being off work and not able to make repayments the insurance will cover this……If you don’t have the insurance then speak to the loan company and explain the situation. They should be able to offer you a solution. But remember,,,they can’t get blood out of a stone……………..As a last resort, let them threaten court proceedings. The court will look at your income and make a judgement on that basis. Try not to go bankrupt that process will mess you up for years BIG TIME and it aint worth it and you won’t be able to use any bank until your bankruptcy is discharged (usually not less than three years) It will also go against you on credit rating good luck ONE last thought what is your spinal injury due to ? if it is following an accident then you would be eligible for compensation for ALL of your losses