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Consumer Debts? Look to the Experts.

If you've read our previous blogs or seen some of our recent success stories, you will know that we specialize in helping people and families who have been caught up in the negative equity trap. It's in our name, after all! But what if you find yourself in financial trouble but don't have negative equity? What if your financial worries are caused by unsecured debts such as credit cards or overdrafts?

Some advisors may tell you that formal insolvency (i.e. bankruptcy or debt management plan/IVA) is the only way to clear up these debts if you can't afford to pay them back, however that may not be your only option. Here at GDP Equity Experts, we advocate for mediation whenever possible and over the years we have had great successes with mediating for borrowers in negative equity, but we also have experience in resolving other forms of debt, including unsecured debts.

Just this month, we negotiated a £65,000 debt write-off for a client with credit card debts. Tom* was well and truly on the edge when he came to see us. He owed £70,000 on various credit cards and the debt was taking its toll on his health, happiness and overall wellbeing. GDP proposed a payment of £5,000 to serve as a full and final payment to Tom's creditors. The creditors accepted our proposal, allowing Tom to free himself from his credit card debts and avoid having to undergo formal insolvency (i.e. bankruptcy/IVA) proceedings.

This was a fantastic result for Tom. He was able to pay £5,000 to settle his debt instead of trying to pay off £70,000 in debt that he could not afford to repay.

The mediation process also allowed him to avoid formal insolvency proceedings. Mediation differs from formal insolvency in that it is a completely private process; no one will know about the agreement other than you, your creditors, and your mediators. Mediation is an informal arrangement reached between you and your lenders. Formal insolvency, however, is a public process; details of your insolvency will be published on a register and if you go bankrupt, your bankruptcy can be published in local newspapers.

Tom's mediation settlement is only one example of the many informal arrangements we have put in place for our clients. If you are struggling to repay credit cards or other debts and don't want to proceed with formal insolvency, it's worth exploring your options in full and finding out if mediation could work for you. If you have any questions about your debts, please get in touch with us today.

*All names have been changed to protect the identity of the bank and the borrower

NB: A client's personal circumstances dictate the level of mediated full and final settlement achievable. Please note that your Credit Rating may or may not be affected.