I was living in Dubai for 7 years. I took out a loan and was paying it off without issue. I was then made redundant so I returned to the UK in Jan 2016. When I returned to the UK i made a couple of payments using funds I had earned and borrowed from a friend.
I tried to negotiate with the UAE bank and received no support. Instead they called on numerous occasion who is disabled and threatened my mother and myself and sent nasty emails. They threatened my mother saying she and I were trying to defraud the bank and my mother was in on some sort of ridiculous conspiracy.
I received a letter from a law firm a year ago – 2017 and I contacted them. At the time I was working in the UK but had a very small salary and couldn’t afford the proposed agreement. The bank had requested me to pay over £2000 a month.
I was earning £1300 a month and had rent and bills to pay. I said I would try to pay a max of £40 a month but that was really all I could afford.
The firm contacted the bank and they refused to agree. Shortly after the la firm stopped contacting me. Then 2 months ago I started receiving letters from a debt collection agency saying they could serve me with a CCJ [County Court Judgment] or file bankruptcy. I am so scared I have no responded to any of their letters.
The amount I owe is large -Being in Dubai it was not such a big debt because of the salary I earned but being in the UK I am earning significantly less – over 3 times less salary.
The debt amounts to around £60k. There is no way I can pay this and especially not on the terms to satisfy the bank. I do not own any property or car so have zero assets. I am keen not to go through bankruptcy because I have just set up a non-profit organisation (CIC) and I am involved with charities dealing with youth and education. My credit is low because returning to the UK after 7 years meant i am building it up again from scratch.
What can happen to me? Can they seek bankruptcy? Can I be served with a CCJ?
Will a repayment plan further negatively affect my credit rating?
If I do not respond to the collections agency can they still take action against me?
Please can you advise me of my best option? I am scared and worried, and this is causing me sleepless nights and terror! Thank you in advance, I appreciate your support and advice.
I understand your concerns and also your questions, and will answer them the best I can. Unfortunately some of the answers may not be what you want to hear. However, fortunately, you do have some good options.
Even if you do not respond to the collection agency, they can still take further actions against you. That is why staying in contact with them, and keeping the lines of communication open is a good thing to do. If they are going to try to get a CCJ, or threaten bankruptcy, you will know.
If you have no assets or property, it is doubtful they will make you bankrupt. If they were to do this, they would then pay all the fees involved, and would only be just another creditor in the bankruptcy.
They may seek a CCJ against you, at which point if they get an Enforcement Order, then could look at wage attachment, Bailiffs, etc. But don’t panic.
Do you owe any other accounts or debts here in the UK, or anywhere in the world?
As the debt from Dubai is being collected here in the UK, it has to be collected in accord with our laws, and it also allows you the insolvency and debt management options we have here. Which includes a DRO/debt relief order if you owe £20,000 or less. This is similar to going bankrupt.
You could attempt to set-up a repayment plan, and the collection agency here in the UK must accept your payments, but they can still pursue you for more, however, if they were to take you to court to obtain a CCJ, you could show the court how much you can afford to pay, and while the court may grant the CCJ, they may also not allow any further action against you as long as you adhere to the outlined payments you can afford.
Regarding your credit, if this account is being reported to any UK credit bureaus, then your credit score and rating is not going to be too good to begin with, so a bankruptcy or DRO is not that damaging, but a way to get a fresh start.
A repayment plan won’t hurt your credit score any more than what may have already been done.
If you have any further questions, don’t hesitate to ask. More may come up as this progresses.
If you need face-to-face assistance, you can try your local CAB/Citizen’s Advice Bureau, or there also may be some other debt charities in your area.