Need to Stop Paying my Credit Cards in the UK - Will I get away with it ?

[Guest ScotinOz]

Ok guys - might start a big debate here I'm sure !

 

Here's our situation

 

• We've been in oZ for 2 years with my wife and family of 3
  
• Expect to get PR in the next few months.
  
• Looks like we will be staying and not going back to the UK for at least 5/6 years (if at all) as my kids finish their education. ( I want to stay ... wife mixed atm)
  
• Since leaving we have been paying minimum payments to our Credit card Debts (GBP 30k)
  
• We've kept up with payments (just) but have added to the debt whilst over here by paying for School Fees whilst on a 457 for the 1st 2 years
  
• We now have 4 UK Cards with almost GBP 40k
  
• We own a house in England with about 60k GBP Equity and we don't want to sell and want to keep the house as an investment.
  

Going to be honest here

 

Would like to simply stop paying the debt as I understand it will be written off in 5 years and the card companies can't touch us over here.

 

Question is can they make us sell our house ? Bearing in mind the individual debt is quite small with each card co - eg < GBP 40k.

 

I know it's wrong / stealing etc etc but I have no concious to the global banking industry TBH.

 

Would love peoples views !!

 

Scot

[Guest Andy]

Ok guys - might start a big debate here I'm sure !

 

Here's our situation

 

• We've been in oZ for 2 years with my wife and family of 3

• Expect to get PR in the next few months.

• Looks like we will be staying and not going back to the UK for at least 5/6 years (if at all) as my kids finish their education. ( I want to stay ... wife mixed atm)

• Since leaving we have been paying minimum payments to our Credit card Debts (GBP 30k)

• We've kept up with payments (just) but have added to the debt whilst over here by paying for School Fees whilst on a 457 for the 1st 2 years

• We now have 4 UK Cards with almost GBP 40k

• We own a house in England with about 60k GBP Equity and we don't want to sell and want to keep the house as an investment.

Going to be honest here

 

Would like to simply stop paying the debt as I understand it will be written off in 5 years and the card companies can't touch us over here.

 

Question is can they make us sell our house ? Bearing in mind the individual debt is quite small with each card co - eg < GBP 40k.

 

I know it's wrong / stealing etc etc but I have no concious to the global banking industry TBH.

 

Would love peoples views !!

 

Scot

Hi,

 

I think you should pay the debt off especially as you have been borrowing since you have moved over there, why pay for school fees if you cannot afford to send private in the first place? You have a house you can sell to pay off the debt you built up and still have £20k left so i think you should do that, to be honest saying you have no conscious i reckon is just an easy way out and blaming someone else, as you have already said you know its wrong and it's stealing, it's not as if it's £50 it's £40k

[yorkiegirl]

I could give you my view but I would probably get banned from the forum :frown:

There's no wonder the UK is in the state it is in, and who do you really think ends up paying your debts for you.

I'm going to stop now before :mad: turns into :realmad:

[Guest littlesarah]

Hi Scot

 

I'm not sure what the legal situation would be, given that you still have an asset in the UK. Given that credit cards are usually unsecured debts, you might be fine. But I don't know whether you could be forced into bankruptcy, or whether you can only be declared bankrupt in your country of residence.

 

All I know, having lived for some of my teens with the bailiffs calling, is that the consequences were so distressing as to make me quite apprehensive about taking on debt of any sort, for any purpose. Which makes me very much unqualified to comment with any experience or authority.

 

I should like to point out that people who default on their loans end up costing savers and other borrowers (including my retired parents, who lost most of their pension when my father's employers went broke & who currently enjoy almost no interest on their savings; and my sister who works hard to provide for her young family in very challenging times). It is not the banks who 'lose' when borrowers default, the costs are passed on to all the other customers.

 

I find it interesting that those who would criticise the banking industry are happy to behave in a similar manner to the institutions they are disparaging about.

Edited March 17, 2012 by littlesarah

[Guest The Pom Queen]

Afaik. Yes they can force you to go bankrupt and take the house, if you had no assets in the UK it could have been different, also what concerns me is the fact you have used them over here, if you stop paying now they may say when you last used them you had no inclination to pay them back, if this is the case it could be classed as fraud.

[Guest Andy]

Hi Scot

 

I'm not sure what the legal situation would be, given that you still have an asset in the UK. Given that credit cards are usually unsecured debts, you might be fine. But I don't know whether you could be forced into bankruptcy, or whether you can only be declared bankrupt in your country of residence.

 

All I know, having lived for some of my teens with the bailiffs calling, is that the consequences were so distressing as to make me quite apprehensive about taking on debt of any sort, for any purpose. Which makes me very much unqualified to comment with any experience or authority.

 

I am not going to post my opinion on the ethics of borrowing money without intending to pay it back, because I don't know your circumstances, and a long time ago I resolved to concern myself with my own conscience first and foremost.

 

Not being funny Sarah but he has given his situation and asked for people's opinions so should expect honest views

[Guest ScotinOz]

Thanks for the views folks.... and I did expect some 'reaction' to the thinking.

 

Everyone's situation is different and to be honest we have tried to pay back but paying min payments is getting us nowhere. The school fees we paid over here were for public schooling as we had to pay these as we were on a 457 visa.

 

I'm sure there are many people who'd like to get on their moral high horse and tell me it's wrong and 'it's people like me' etc etc. But I'm looking for people that have experienced similar challenges and advice on how they approached it - In particular whether I can be forced to sell my house.

 

Thanks

Scot

[Guest The Pom Queen]

As I've already stated, yes you can be made bankrupt even if you do not reside in the UK as long as your debts are based in the UK.

If you are made bankrupt you do not need to return to the UK for the proceedings, however the Official Receiver will be in contact with you to have you complete the forms they need completed.

Being inside the UK or outside the UK the bankruptcy process is still the same, after 12 months you can receive a discharge and the bankruptcy is over. Therefore YES your UK assets WILL come in to play

[welsh in oz]

I am a little bit in disbelief that you would even comtemplate this, it's not wonder that the UK is in such trouble. You have a house with equity? can you consolidate the debt into the house? If you dont pay them back you risk getting into big trouble if you ever decide to go home do you really want to run that risk? Plus it's not like they dont know where you are since you've used them here and all.

 

Seek some sensible financial advice, not from a forum, be sensible yourself and take responsibility for your spending. If you could not have afforded to come here you should have waited. Speak to the bank who may be able to reduce the interest or help you somehow. Please do not just stop paying. I have $28k debt here from various reasons and sometimes feel like we are drowning in debt but we will get there paying off bit by bit it will just take a while. You may have to make sacrifices, downgrade the car, stop holidays, cook at home not eat out, live below your means not above but you will get there.

[Quoll]

Why not just do the right thing, sell the house, pay the debt and have a bit of a buffer in the bank. Alternatively get a personal loan in Australia and consolidate your debts and pay off your UK credit card. If your plan is to stay in Australia then you wont need the worry of a house in UK anyway and if you do return you wont want to do it with a credit black mark on your records.

 

You might want to try a financial counselling service for advice - they are all over the place. Usually they can help you negotiate with credit card companies for reduced payments but whether they will do that for a foreign company I have no idea.

[Peach]

As a home owner, there aint no way you can walk away from the credit card debt and keep the equity in your house. Even if they don't bankrupt you the card company can and will register a charge over the property:

 

If you are a property owner and you have defaulted on your credit card or personal loan repayments, your credit card or loan company can secure this debt against your property.

 

What is a charging order?

A charging order is one of the more frightening enforcement methods available to creditors seeking to reclaim outstanding debt once a Judgment has been obtained.

 

A charging order is a court order that places a ‘charge’ on a debtor’s property, turning unpaid, unsecured Judgment debts, such as credit card and personal loans (although not exhaustive), into secured debts. This means that once any prior-ranking charges on the property have been settled, the debt must be paid back out of the available proceeds of sale when the debtor sells the property.

 

A creditor who has obtained a charging order can also apply to the court for an order requiring the property to be sold sooner, although this only happens in a minority of cases.

 

Why would a creditor apply for a charging order?

Financial companies can apply to a court for a charging order when a consumer has failed to keep up payments on their credit card or other form of unsecured debt.

 

The Office of Fair Trading (OFT) warns financial services of this form of enforcement action

The number of charging orders granted by UK courts has risen from 45,000 to 164,000 over the last five years. The investigation by the OFT found a numbers of problems relating to the use charging orders by major creditors. The OFT singled out four lenders ordered to make changes to the way they operate. The problems uncovered by the OFT’S investigation were specific to each business, but across the sector they included:

 

- A failure to consider the customer’s circumstances or proportionality before asking the court to put a charging order in place;

- Not building adequate checks in to the lender’s decision-making process;

- Applying substantial charges for referring cases to a debt collection agency; and

- In a minority of case, sending oppressive and/or misleading correspondence.

 

The OFT’s Director of Consumer Credit, Ray Watson, said:

 

“Our investigation uncovered instances of charging orders being used to secure debts of less than £600. Lenders are entitled to use charging orders but must do so proportionately. Where we consider the use of charging orders to be unfair or oppressive we will take action to protect consumers”.

 

Before seeking a charging order, creditors will now need to demonstratively take account of the personal and financial circumstance of the customer, the amount that is owed and whether it can be obtained by less drastic measures.

 

‘Which?’ borrowing and debt expert Martyn Saville commented:

 

“The OFT’S findings are worrying and are a timely reminder that even unsecured debt can put your home at risk if you fail to keep up repayments. Anybody who receives a letter from their lender threatening a charging order should seek professional debt advice as soon as possible”.

 

If you are being harassed by your creditor, threatened with a charging order, or have received a County Court Judgment (CCJ) against you, contact Duncan Lewis’ experienced debt team for further advice.

 

http://www.duncanlewis.co.uk/debt_news/Making_an_unsecured_debt_secure_by_virtue_of_a_charging_order_%289_May_2011%29.html

[Guest littlesarah]

Hi Scot

 

If you need legal advice, you really should contact a British lawyer. No-one else is truly qualified to comment, as everyone's situation is different.

 

I suspect that people get a bit upset because a lot of us have had to make significant sacrifices due to the world economic situation, and a number of people who use this forum have delayed migrating because they can't afford it at the moment. There's a feeling that we all suffer when people don't pay their bills, because of course the cost of that commodity increases to compensate. In the case of banking, interest rates and charges alter to ensure that the banks continue to make a profit, so ultimately the cost of default is shared among all customers. So, naturally, customers who pay off their debts (or don't borrow in the first place) feel aggrieved that other people think it's a good idea to use their bank as a means of obtaining 'free' money.

 

I'm a bit confused that you initially welcomed our 'thoughts' and that you 'expected some reaction', but then go on to say that you only really want to hear from anyone else who'd 'experienced similar challenges'. You surely must realise that the majority of people would view the deliberate and calculated default on debt in a dim light? Why put your head over the parapet and invite comment, and then respond by saying you only wanted comment from people who agree with your view? Unless I've missed something here...

[k8bug79]

I think this is a difficult one for me. We have at the moment £9K of debt including a loan that has 17 more month to go on it. We are tying in the move so that will be clear and we are trying to clear as much of the other outstanding stuff before we go. We think we will still have about £2-3K on credit cards when we actually go. Now I have every intention of paying this back from over there , but it will be the last priority if things get tight. However I think there are two points that make me go hmmm in your situation. First as the above says you have used them whilst over there and secondly the amount of money. £40K is a large amount of debt I am afraid. In fact I can't comprehend how credit cards have allowed you to borrow that much, but that's not for me to know. I do think given you have equity that the best thing both for you and the banks is to sell and pay it off. I had to do it when I had a lot of debts. It wasn't what I wanted to do, as I am still in rented accommodation and desperate to own but it taught me a lot about money and what is the best way to do things. (Not getting all high and mighty as I still have debt)

[Guest guest36187]

We had debt when we left. Sold our house, paid it off. Meant we came here with less, but so be it!

 

Leaving the debt behind is bad enough, posting and admitting that you have no intention to pay.....argh! No posting either, id be banned for comment too.

[Guest Andy]

I think the op wants to have his cake and eat it to be honest, building up a huge debt that you cannot afford to service and then keeping the equity in a house that you own because it is an investment, i would hazard a guess that the op probably had a mortgage on the property which was borrowed from a bank and then the equity has again probably come from the rise in house prices so if the bank had not lent the money in the first place then the equity would not be there, so the bank is ok on the one hand but not on the other. I am just assuming that there is a mortgage on the house if not then i apologise for assuming this.

[AJ]

Im glad I dont know you! You liked the benefits you gained from this money, dont try and say it was all just so you could live, bet you got all the latest tellys and phones on credit, not just your kids education. Just think what if you dont get PR and have to go back - I hope you do!!

[Guest ScotinOz]

Thanks Peach - This is insightful and helpful

 

Littlesarah - not only looking for views from people that agree with me and I did expect the majority of comments to slate my approach. I'm ok with this and looking for facts as well as comments from people that have done the same. Whilst the majority of people will do the right thing, there's got to be people out there who have simply 'disappeared'.... this is a fact of life.

 

I havn't done anything yet and not in arrears in any way ! Simply reviewing my options and seeking insights to other peoples experiences.

 

Scot

[Guest littlesarah]

Right, now that I'm taking a break from my work, I've re-read the original post, and frankly I'm shocked!

 

With Scot's logic, I could go and steal $60,000 from my local bank, and should not be prosecuted because they haven't passed on the interest rate cut!

 

It's an interesting example for a parent to set...

[Guest guest36187]

I wasn't going to post but to the OP.....

 

While I get you are "examining your options...." (who am I kidding? It's wrong to even think of what you are considering!), what example are you showing to your family. I agree with the "have your cake and eat it" poster. You want all without any of the consequence.

 

This is why so many places are going down the pan now......people with no morals! Families of these people will grow up after witnessing this and think this is the way things are done.......talk about pass the message to the next generation!

 

We live (in our house) by the theory....if you don't have the money to buy it, you don't have it! Our kids knew that no meant no and they respected that.

[Tea4two]

I'd just like to add a few things...a lot of people have debt in the Uk now, it's almost a part of life...but i've watched friends scrimp and save and pay it off before starting a family, watched my brother and his family lose his house and so I know how stressful it can be. If this were any of my friends or husband or family members speaking this way and even thinking this was an option...I would have very little respect for them. 40K is a huge amount of debt but I imagine you racked it up almost thinking it's okay as you had equity in your house....so use your equity, do the right thing and walk with your head held high. I belive in Karma and treating others the way you would like to be treated. It's the UK people you are taking this from, not the bank and if we all decided to do this, where would we be then?!?

 

I think you only wanted people who have had similar experiences to comment because you want to know whether it's possible and you want someone to say 'aye go ahead, they can't touch you...happy days 60K in the bank'. I truly hope it's not possible because you don't deserve it. Not because I don't think it's hard paying the min payment as I do, you will never get anywhere that way...but because YOU spent it. You emigrated when clearly you didn't have the money. I'm ranting now so i'm going to stop but this is a forum and you did expect bad reactions i'm sure

[winter1]

Are you sure you would get PR or have your PR revoked if you tried this, particulary if it is deemed fraud?

 

Several cases of PRs being sent back lately for committing crimes some have been here since childhood!

[Guest The Pom Queen]

Please everyone can I remind you NOT to get personal, yes, you can discuss the right and wrongs but less of the insults please. Remember debate the subject not the member.

[Guest dmcevilly]

As a bank manager, I can probably give you the advice you need. Sell your property and pay off the debts YOU have accrued over the years. Otherwise the credit card companies will proceed with legal action. By the time they apply for court judgments your property is deemed an asset and all equity in it will be applied for to cover the £40K of debt plus all the legal cost, charges, interest and fee's which will probably amount to to a further £10K. And to be honest banking is becoming a worldwide game and banks all over the world are merging for a better platform to do business. Who's to say in 10 years time when you find the house of your dreams you cant get a mortgage because the debt you obtained in the UK affects your application. It's happening in Europe now its only a matter of time....... Oh and as for this 6 years written off idea... absolutely not! I know customers are still being hunted for debts over 10 years due!!

[Guest The Pom Queen]

---

.... Oh and as for this 6 years written off idea... absolutely not! I know customers are still being hunted for debts over 10 years due!!

They may be hunted but they can't be forced to pay, unless it's a government debt

[Guest ScotinOz]

Lots of these comments are views on morality rather than the 'facts' and contradict what I've found on the net.

 

Ie CC co's wouldn't bother chasing debt overseas. Also legal action is a last resort. Plus debt would be written off in 6 years and become statute barred.

 

Scot