Writing off debt?

[mnkiboy]

Asking this purely out of interest, as I keep receiving text messages stating something along the lines of "Due to recently legislation, those with over 5K of undecured debt can apply to have 70% of it written off. Reply for more details..."

How does that work then? Presume you have to prove you can't afford to pay it. How do these companies make money and what is the service they offer?

[Eric Mc]

Nonsense.

It's a scam.

Debts can always be written off - it depends on how you feel about being declared insolvent or not.

[Sarnie]

mnkiboy said:

Asking this purely out of interest, as I keep receiving text messages stating something along the lines of "Due to recently legislation, those with over 5K of undecured debt can apply to have 70% of it written off. Reply for more details..."

How does that work then? Presume you have to prove you can't afford to pay it. How do these companies make money and what is the service they offer?

You have to enter into an IVA. All debts will be defaulted and you can pretty much forget about getting any credit for the next 6 years. The company basically tell the companies that you're destitute and that if they don't accept circa 40% as a settlement they'll get nothing at all. Once they have agreements in place they add on the fee's of a few grand to the total balances payable now and divide into 60 monthly payments. You will now be paying a lot less than previously but with a destroyed credit file, and if you default on the IVA you will be bankrupted.

[mnkiboy]

Not quite as straightforward as the text messages make out then! You'd have to be in a very bad position to consider going down that route. Or fail to look more than a couple of months ahead.

[Eric Mc]

I wonder what "new legislation" they are referring to?

[P-Jay]

There isn't any, but there's also no set timeframe for what "new" means ether.

If it seems to good to be true....

Credit rules in the UK by-and-large are fair for both parties, there are procedures in place so people aren't hounded to death if they cannot pay and there is is also fixed time penalties if it all goes wrong. But you don't need to pay some agency who spam you via SMS to help you, if you're completely clueless speak to the CAB they're a brilliant source and should be the first port of call for anyone.

[mnkiboy]

Agreed, there's plenty more avenues to go down before you enter in to an IVA. SMS messages like these make it sound so simple to perhaps wipe off £10k of debt, with seemingly no consequence. The reality is quite different.