Debt Questions

Hi Guys,

I am so stressed about what to do, regarding my debts, it's untrue.

Last night, I told my Girlfriend everything, after getting back from the CAB. She's been a star, but I lay awake most of last night, struggling with some very dark thoughts.

Having been to discuss things with a very helpful lady, at the CAB yesterday, I'm still considering a DRO, however I am worried it'll get me into other criminal trouble.

I really don't want to go down the DRO route, however I don't really have a choice.

My huge worry though, is the possibility of being 'done' for fraud :-/

2 weeks ago, I stupidly wrote 5 cheques out, at 'The Money Shop', totalling £500 (one of those 'cash 'til payday' loans)..

I lied at the time, and said I was still working in my old job (which I lost last November '09 / been on ESA since), when I wrote the cheques at 'The Money Shop', giving them my old works address / bank account / Visa debit card and cheque guarantee card details.

Stupid, I realise.

I'm a recovering alcoholic, and have been going through severe depression and anxiety, and fell off the wagon when I did this 2 weeks back, having since got help and climbed back on.

So, my worry now, is that I'm in such a pickle with my debts, I just can not think straight.

The Money Shop are going to present the cheques (£500 worth) to my bank (Alliance & Leicester), on the 8th July, and the money is not going to be there in the account.

I wasn't sure, if the cheques would bounce, or if they would be 'guaranteed' with the card, and so the CAB lady called the A & L bank on behalf of an anonymous client.

The A & L said, that the cheques would indeed be 'honoured', and so my account will go overdrawn, to the tune of £500 + bank charges (probably £25 I think for each cheque + £5 per day for being o / d)

It is worrying though, that if the A&L bank 'bounce' the cheques, the MoneyShop will then hound me for the money + charges, and could 'do' me for fraud (for fibbing, when I applied for the loan, saying I was working in my old job) This is making me ill with worry :-/

My Girlfriend was going to lend me the £500 - deposit it into my A & L account, making sure that The Money Shop get their £500 back, and that my A & L account is safe / not overdrawn / no charges incurred.

However, having spoken to the CAB, it appears I'm now in even more of a quandry.

If I pay off The Money Shop / A&L, and then subsequently, have to go for a Debt Relief Order, the Official Receiver will then see that I have 'shown preferential treatment toward one creditor over another'.. The DRO would then apparently, be revoked.

Any of you with any experience / knowledge of this on here please - Is this true?

My debts amount to about £11,000 (all unsecured - no assets - rent flat - no car - out of work and on ESA), and so I was told by the CAB yesterday, that yes, I am eligible for the DRO.

We went through all the figures, and the angel of a Woman said that the worst case scenario regarding The Money Shop / A&L bank, will be that The Money Shop get repaid their £500 loan, and the bank overdraft / charges will then be treated as a seperate debt - which can then be included in my DRO, and written off after 12 months.

I am so worried though, that the A&L bank will then come after me for Fraud. Surely they will see, that I obviously wrote the cheques, knowing the funds would not be in my account to cover them. Will I then be looking at criminal proceedings / a jail sentence? I could not sleep last night, because of all this.

Even if the bank 'bounce' the cheques, The Money Shop will still chase me for the money back, and they too (more likely them, as apparently The Money Shop, are quite aggressive when it comes to their collection practices by all accounts) will come after me for fraud.

Either the bank or the Money Shop, are going to wonder, why I could afford the loan 2 weeks ago, and then a month later why I'm going to a Debt Relief Order. Surely this is going to arouse suspicion?

How on earth do I sort this out?

My other 'Priority Debts' are - Severn Trent Water (I called them last Friday, before the CCJ was due to go through this week - they agreed a plan with me - CCJ suspended, pending £45 a month / first payment due in 10 days time - I can't afford this) = £225.00

Also - NPower Electric Arrears = £635 - I called NPower last week also, explaining that I am trying to sort this out, and would discuss it with the CAB. NPower are asking for direct payments, from my ESA each fortnight, of £15.30 - again, I will not be able to afford this, until I'm back into work, so no formal agreement has been made as yet.

TV License Arrears = approx £118 owing - again, I can not afford to repay this at present. I have not been in touch with TV License yet.

DWP Crisis Loans = £710 owing - the DWP are deducting £7.72 from my ESA already - yet more deductions I can not afford.

Council Tax arrears = £459 (Liability Order already been granted) - the Council are not making deductions yet - they are wanting documents back from the CAB, to agree to £3.25 a week - more deductions from my ESA. The CAB lady advised not to return agreement for deductions, to the Council, and to instead include the debt in DRO asap.

I also owe £2,333.24 to the Council, for a Housing Benefit Overpayment - this was 'coded fraud', and so will not be allowed to be included in the DRO - I will continue repaying this at £5 a week.

On top of these debts, I owe £20,784.99 in unsecured debts to my Creditors (Girlfriend / Credit Cards / Catalogues / old mobile contracts) - This also included £13,938.00 of Student Loans though, so it would be £6,846.99 included in the DRO..

Plus the £4,483.88 owing to the Priority Debts

= a Total Owed / to be included in the DRO = £11,330.87

So, obviously I am below the £15,000 limit for a DRO.

This is so tough to face, however I realise I can not repay all of this debt, given that my income is only £57.73 per week (after deducting £7.72 weekly towards repaying the Social Fund Loans to the DWP).

I just can't believe I've been so stupid :-/

Also, if I do go for a DRO (am thinking about going for it in the next couple of weeks), won't this then attract attention to the fraud I committed, regarding The Money Shop / Alliance & Leicester bank.

I really don't want to lose my A&L bank account either - this is the first 'proper' bank account I have had in years..

I am aware though, that this account will probably be close anyway, once / if it goes £600 / 700 into the red..

I do have another seperate basic bank account with the Co - op - I've had this 6 years, and have treated the account well.

Am just so worried I'm going to end up in the Magistrates Court for my wrongdoing at The Money Shop, once they either don't get their money, or the bank lose their money..

Sorry to witter on here, but it's all making me feel quite ill, and I'm trying to get better, so I can return to work and make a fresh start.

At the moment though, I'm so scared that there's no way out of this.

Any pointers would be most appreciated.

Many Thanks,

Sim.

Those cheques you wrote, were they all dated differently.

If the A&L told the CAB rep the cheques would be honoured there would be no case for fraud. If the cheques were to bounce, it will be up to the payee to sue you.

Hi Simon,

Thanks for your reply.

The cheques were undated - the chap at The Money Shop, asked me to leave them blank.

However, each seperate cheque (5 cheques at £100 each) is due to be dated on the 8th, 9th, 12th, 13th and 14th of July.

The A&L advisor, did indeed tell the CAB rep that the cheques will be honoured.

So, do you think I should just let this happen - let the cheques go through, and wait until my A&L account is overdrawn + charges?

The CAB lady advised, that I should do this, and then just treat it as a seperate debt, to be included in the DRO.

I'm just worried what could happen, if the cheques end up 'bouncing', and I end up owing The Money Shop money, and they then find out I was dishonest when I took out the loan

Then, obviously I'm scared that The Money Shop could press charges against me, if they find out that I wasn't actually working when I borrowed the money, even though I'd told them I had

Many Thanks.

From the figures you are stating your total debts look more than £15k which would mean a DRO will not solve your problem.

To cap it you are gripped by the immediate A&L problem which you can't solve.

BUT please be assured that all the folks on this forum are likely to have been in the same place as you and it can get fixed.

In my own case knowing that I really could not afford it I applied for a credit card online and was very economical with the truth - I got a line of credit of £15k and transferred that amount from another credit card. Two months later I called the CCCS as my debts now totalled £93k and one creditor jacked up the interest - the whole pack of cards crashed and I lay awake at night frit-rigid that I would be done for fraud. I even called the CCCS to see if I should transfer the money back and the answer was no because I would do so knowing I could not pay it back and that WOULD be fraud.

So I continued to eat myself silly all day and lay awake at night in a cold sweat dreading what the postman would bring on the morrow. I rehearsed what I would say to the judge and what I would do when I lost my job.

IT DIDN'T HAPPEN - and as I was able to pay over £100 a month my Debt management plan was underway. I got a ton of 'pay up or else letters' and the phone was red hot with creditors yowling for cash.

A&L are not going to be best pleased but you are one of many - I owe A&L and they are not the worse of my creditors. When you don't have it £500 is a lot of money but in the pot of bad debt they have this is diddly-squat.

If you have not already done so and it sounds like not....firstly brew up a nice pot of tea and get the biscuits out. Then get all your statements together and create a spreadsheet that details out all your debts - you know Creditor, account no, balance owing, minimum payment and tot up the total - drink more tea (lots of sugar for the shock) and eat more biscuits.

It is truly horrendous - the world dropped out of my bottom when I did mine - first time I'd ever seen the total picture of my debt in all its gore - but I guarantee that it will be cathartic - the order of the spreadsheet will start to put you back in charge.

It is now time to stop the tail wagging the dog - the A&L matter is just part of a bigger pile of crap that needs dealing with.

Back to your figures - if they total more than £15k then DRO is not for you - you can't just do some of the debts its sh*t or bust.

You've already been to the CAB but if you didn't give them the whole picture then the advice you were given might not be the most appropriate.

I strongly urge you to call the Consumer Credit Counselling Service tomorrow - they've seen it all before and you will get immediate and good advice - doesn't matter that you have been to the CAB, they are so busy that they are unlikely to be able to see you tomorrow.

You've actually made the first important and most difficult step - acknowledged you have a debt problem and have sought help. It could be that bankruptcy is your best bet - but do that spreadsheet and call the CCCS

http://www.cccs.co.uk/

(the A&L co-operate with them and they are free, you don't even pay for the phone call) and THEY ARE NOT GOING TO DO YOU FOR FRAUD.

Keep reading this forum - the folks here provide good solid support, advice, and yes a few laughs.

Look up Chandjay's posts - you will see a debt meister in action - he is paying his debts back on his terms and has them all by the 'orchestras' - I think he is currently enjoying a relaxing break in Spain! Guaranteed to make you feel a whole lot better and set you up for a good nights kip.

It isn't strictly right to take a bunch of undated cheques of someone. The guarantee card says £100 a transaction, the Money Shop did a £500 transaction. That is they allowed you to use five cheques which is out of order, so they aren't likely to be accusing you of fraud.

Hi there I'm sorry to hear about your situation and quite understand why you are so concerned. The one thing you cant do here to stand any chance of obtaining a DRO is make a preferencial payment to the bank involved as that’s almost 100% certain to be picked up and cause you not to get one or have it revoked soon after its made so pretty pointless. I appreciate that your girlfriend may want to help but that’s not going to be of any help here.



The legislation only covers your actions not anyone else’s so if your girlfriend or anyone else decides to pay the company that you wrote the cheques to instead of them cashing the cheques then that’s nothing to do with you as such at all and you haven’t treated anyone in a preferential manor. The difference being that the 3rd party is paying the money to the company concerned not you and in return they either hand back the cheques or rip them up. End of problem.



The alternative of course is to consider your frame of mind at the time you wrote the cheques I'm sure that at the time you beloved that you would get full time employment again and by the time the cheques came to be cashed you would have earned enough to cover them or would be getting a gift to cover them. Either way when you wrote them you believed you could cover them at the appropriate date for them to be cashed.



The other issue is that it any intermediary has to deal with the situation as explained to them so the one you dealt however nice will know all of the above and about the fact that when you visited you owed the payday loan company money so may have to report this as additional info even if its cleared by a 3rd party before you go ahead which may cause a problem as the Or will look into it anyway. I suggest that once your girlfriend or 3rd party has paid off the company mentioned that then and only then do you consider going ahead but not via the agency you visited initially. I will e-mail you some info re this.



I hope this covers your concerns and good luck


PS: Your non excluded debst are sub 15K so as you have already been told by the local intermediary you do qualify on dbet level grounds for a DRO as a huge proportion are excluded from the 15K total for a DRO (Page 8 & 9 IG V6)