Debt management and claiming charges back

sminty_2 · 6 November 2006 at 10:18PM

Hi
I am currently repaying my debts through a debt management company. They have agreed lower repayments to my creditors and I pay them a set amount each month which they distribiute to my creditors and save the rest for making full and final payments at a lower amount.

I wanted to claim back the bank charges on my (now closed) current account so thought I would call my debt management co to make sure I could do this.

They say they will do this for me as part of the full and final settlement that they offer my creditors to enable them to reduce the figure I owe.

Does this sound right? I am assuming that if I owe say £1000 to my bank, and I pay £100 off at £1 a week, and of the remaining £900, £500 of this is charges then my debt management company will pay £400 to clear the debt?

So there is no need for me to do it is there?

Debt_Free_Chick · 7 November 2006 at 11:00AM

Who is your debt management company, please?

expertwannabe · 7 November 2006 at 1:59PM

A full and final settlement is an offer made to creditors which is a proportion of the debt owed. The idea is that if the creditors accept the offer (in writing) and the payment is made, the rest of the debt is written off. But it is more like a gentlemen's agreement; it isn't legally binding. This is why it is important to have the offer accepted in writing (and to be executed properly the payment has to be made by a third party which I guess is why your debt management co. have asked you to set up the savings account in this way.)

If your debt is reduced by you claiming back your bank charges, then not as much money is needed to make the full and final offer when the time comes.

It is always a good idea to try and reduce your original debt- therefore the amount of money you have available to make full and fiinal settlement offers with, will go further.:T

hope this helps.

sminty_2 · 7 November 2006 at 2:22PM

Thanks, so does this mean I should leave it to the debt management company as they said they'll do this?

My debt management company is Compass Debt Counsellors in Nottingham.

sminty_2 · 7 November 2006 at 2:23PM

Hey expertwannabe I am in Newark too!!!

expertwannabe · 7 November 2006 at 2:54PM

I don't think your debt management company have a legal basis for reclaiming your bank charges as they have no contract with the bank (like you have because you took out the account in the first place). so it is only something you can do.
it may be that by making the full and final offer on your behalf the net effect is like reclaiming the bank charges because they are hoping to get a proportion of the debt written off for you.

Debt_Free_Chick · 7 November 2006 at 3:00PM

sminty wrote:

My debt management company is Compass Debt Counsellors in Nottingham.

What are they charging for managing your DMP? Look carefully at your copy of the agreement as I'm sure they're charging you! If so, then they will probably take a share of whatever they claim back in bank charges :mad:

You could have a completely FREE DMP with Payplan or CCCS

sgx.saint · 7 November 2006 at 4:04PM

What are they charging for managing your DMP? Look carefully at your copy of the agreement as I'm sure they're charging you! If so, then they will probably take a share of whatever they claim back in bank charges

You could have a completely FREE DMP with Payplan or CCCS

Or alternatively manage your own DMP like myself and many others do. Free, effective and you stay in complete control of your finances. It also allows you to feel like your tackling your problems and facing them head on.

dlb · 14 November 2006 at 3:30PM

I also am on a dmp, and natwest are one of my biggest creditors, loan+overdraft.
Can i claim the bank charges back myself , and if i did and won would they knock it of the money i owe them? Which i would prefer as it would lower my debt.
Or would i be better asking the dmp about this.?

makingendsmeet_2 · 14 November 2006 at 9:29PM

Im on a DMP with Payplan and Natwest are also one of my biggest creditors and they said im am well with in my rights to recalm my charges as they are UNLAWFUL. They did advise we to work out how much Natwest owe me though as if its just a couple of hundred quid then not to bother as this is the same company i am asking to freeze intrest charges and although the chances of the department that deal with the repayment of charges and the one that deals with DMP's communicating with each other is slim for a couple of hundred quid is it worth the risk. Anything above that however the said go ahead and get the charges back.

Lucycat · 15 November 2006 at 5:48PM

Work out how much of the debt was made up of unlawful charges applied by the original creditor - you can send them a Subject Access Request under the Data Protection Act along with a cheque/PO for £10 and obtain all the info they hold on you if you don't have the paperwork to hand.

You then pursue the charges through the original creditor - when they pay up, you (or your DMC - and I have to say here that I'm in complete agreement with everyone who has recommended PayPlan or CCCS) can negotiate a hopefully much reduced full & final settlement with whoever currently owns the debt.

Lucy.

Debt management and claiming charges back

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