Struggling with debt? Ask a debt advisor a question

cooliegirl · 6 December 2012 at 12:36PM

Hi

Please see my thread:

http://forums.moneysavingexpert.com/showthread.php?p=57734347

I am wanting to know that if I were to approach my business bank regarding my inability to keep up the repayments on my loan, overdraft and credit card, would they enter into some kind of agreement with me and will this show on my credit file? I am trying to dissolve my business without any blemish to my personal credit file however I am actually personally liable for the majority of the bank debt.

If I have posted this is the wrong place, sorry, please point me in the right direction.

Thnaks
Sam

Former_StepChange_Rachel · 6 December 2012 at 2:59PM

I_will_win wrote: »

I have went to the clydesdale bank this morning to set up a new current account for my salary to be paid into, 1 hour later no further forward,still dont have an account. Getting a call at half 11 to talk mortages to help get pre approved!!!
I didnt realise it was hard to get an account!!! Have payplan foning me at 11 to ask if i want to go ahead with a DMP, really dont know what to do???

Hi there I will win,

I really can’t say why it’s taking a while for Clydesdale to open your account. If you’re having trouble you can always try another bank.

I would be weary if they call to talk about mortgages. They could be referring to secured loans and may look to consolidating your debts as a solution. If this does come up in conversation, I strongly advise you don’t go down this path. Secured loans are the same as mortgages in terms of the consequences of not paying. You DMP with PayPlan will be flexible and will always come secondary to your living expenses.

Hope that helps and please write again if you have any further questions.

Regards

Rachel

Former_StepChange_Rachel · 6 December 2012 at 5:52PM

cooliegirl wrote: »

Hi

Please see my thread:

http://forums.moneysavingexpert.com/showthread.php?p=57734347

I am wanting to know that if I were to approach my business bank regarding my inability to keep up the repayments on my loan, overdraft and credit card, would they enter into some kind of agreement with me and will this show on my credit file? I am trying to dissolve my business without any blemish to my personal credit file however I am actually personally liable for the majority of the bank debt.

If I have posted this is the wrong place, sorry, please point me in the right direction.

Thnaks
Sam

Hi there Sam

If you are personally liable for these debts and you have to reduce the payments for the time being, your credit rating will unfortunately take a bit of a knock. It won’t stay that way forever. Nothing lasts on your credit file for longer than 6 years.

I suggest you give our Helpline a call. We can give you long term advice and options on these debts and your overall situation. Our number is 0800 138 1111 and we’re open Mon – Fri 8am to 8pm and Sat 9am to 3pm,

Best regards,

Rachel

DaveK1971 · 7 December 2012 at 1:16AM

Hi,

I entered a DMP with StepChange in November and have a few queries about the process and how best to react to creditor emails / letters.

When I signed up for the DMP I wrote to all of my creditors, provided authorisation for them to speak to StepChange and advised of my financial difficulties.

A few of my creditors have acknowledged this and put my account on hold pending receipt of documentation and plan details from SC.

So far one creditor has advised me that they have accepted the plan and SC have advised me that another three creditors have rejected the plan. This must mean that SC have issued details of my situation and payment proposal to my creditors but the vast majority of my creditors are saying that they have yet to be contacted by SC.

At first I put this down to my creditors not being too organised and maybe not having any trace of SC on their systems but today I have received an email from SC stating that proposals have been issued to my creditors on 30/11.

Just wondered how it works as I'm confused because some creditors must have been contacted way before 30/11 to reject my offer but some are saying they have heard nothing which ties in with SC saying that my proposals were issued on 30/11.

I've had a couple of default notices and have had a few email and telephone exchanges which have generally been just to tell my creditors that SC will be in touch and try to buy time before they commence recovery action.

Wonga is a strange one as although I heard nothing I checked my online account a few days ago and it said a payment plan had been agreed, interest frozen and the amounts tied in with SC's plan. Today however they sent me an email asking me to complete an income and expenditure spreadsheet and the repayment plan that was on my online account has disappeared. I have emailed them back attaching a copy of the payment plan agreement that was displayed on their website a few days ago and informed them that SC must have already supplied my budget details as they have agreed to the payments. Am I correct in not completing their own income and expenditure sheet?

I am intending to ring all of my creditors in the next day or so and just try to ascertain where things are up to, if they have heard from SC and if I need to do anything. Presumably I am ok to keep in touch with them in this manner or could I be in any way hampering SC?

First Direct is another strange one as they have rejected my payment plan because the payments are too high (about £60 a month above what I was paying). The way my payments have been allocated seems odd in that a few creditors are going to be getting more than they were but I'm thinking that SC must know what they are doing so there is no need to question it.

Sorry for the long winded post, probably could have been worded better and half the length!!

Thanks in advance.

StepChange_James · 7 December 2012 at 10:51AM

DaveK1971 wrote: »

Hi,

I entered a DMP with StepChange in November and have a few queries about the process and how best to react to creditor emails / letters.

When I signed up for the DMP I wrote to all of my creditors, provided authorisation for them to speak to StepChange and advised of my financial difficulties.

A few of my creditors have acknowledged this and put my account on hold pending receipt of documentation and plan details from SC.

So far one creditor has advised me that they have accepted the plan and SC have advised me that another three creditors have rejected the plan. This must mean that SC have issued details of my situation and payment proposal to my creditors but the vast majority of my creditors are saying that they have yet to be contacted by SC.

At first I put this down to my creditors not being too organised and maybe not having any trace of SC on their systems but today I have received an email from SC stating that proposals have been issued to my creditors on 30/11.

Just wondered how it works as I'm confused because some creditors must have been contacted way before 30/11 to reject my offer but some are saying they have heard nothing which ties in with SC saying that my proposals were issued on 30/11.

I've had a couple of default notices and have had a few email and telephone exchanges which have generally been just to tell my creditors that SC will be in touch and try to buy time before they commence recovery action.

Wonga is a strange one as although I heard nothing I checked my online account a few days ago and it said a payment plan had been agreed, interest frozen and the amounts tied in with SC's plan. Today however they sent me an email asking me to complete an income and expenditure spreadsheet and the repayment plan that was on my online account has disappeared. I have emailed them back attaching a copy of the payment plan agreement that was displayed on their website a few days ago and informed them that SC must have already supplied my budget details as they have agreed to the payments. Am I correct in not completing their own income and expenditure sheet?

I am intending to ring all of my creditors in the next day or so and just try to ascertain where things are up to, if they have heard from SC and if I need to do anything. Presumably I am ok to keep in touch with them in this manner or could I be in any way hampering SC?

First Direct is another strange one as they have rejected my payment plan because the payments are too high (about £60 a month above what I was paying). The way my payments have been allocated seems odd in that a few creditors are going to be getting more than they were but I'm thinking that SC must know what they are doing so there is no need to question it.

Sorry for the long winded post, probably could have been worded better and half the length!!

Thanks in advance.

Hi Dave,

Thanks for posting.

Creditors all react slightly differently to DMP offers and some can take a while to process the offers, things tend to settle down fairly quickly though. Any creditors that don't accept the offer may continue to contact you but you can just tell them to speak to us if they've got a problem.

You're spot on about the wonga request for income and expenditure, you don't need to fill it in as we've already sent them all that information as part of your payment proposal.

It can sometimes work out that payments on our DMPs are more than the contractual payment for a debt, which means interest is often not stopped. Because the payment is higher you should still be able to see the debt going down even when interest is being charged.

There's no harm at all in contacting your creditors to find out what's going on. You may find that it's hard to get a clear picture while you're in the early stages but after a while your creditors should all have had a look at the payment offers, made a decision and you'll know where you stand.

All the best with your plan.

James

Benefit_Cuts · 7 December 2012 at 12:58PM

Hi, I accessed my credit file today to try and find out when some of my debt would become statute barred. Worryingly the three accounts held by DCA Lowell/Red are being re-aged every 6 months when they apply a new default to the account. It is my understanding that they are not allowed to do this and would like to know how to proceed to get them to stop as it is having a detrimental effect on my current credit rating and will continue to effect it forever if they keep changing the date of last activity to delay it becoming statute barred. How should I proceed? Are there any form letters available to deal with this and how would I go about raising a complaint in relation to The Lowell Group? Thanks.

StepChange_James · 7 December 2012 at 4:57PM

Benefit_Cuts wrote: »

Hi, I accessed my credit file today to try and find out when some of my debt would become statute barred. Worryingly the three accounts held by DCA Lowell/Red are being re-aged every 6 months when they apply a new default to the account. It is my understanding that they are not allowed to do this and would like to know how to proceed to get them to stop as it is having a detrimental effect on my current credit rating and will continue to effect it forever if they keep changing the date of last activity to delay it becoming statute barred. How should I proceed? Are there any form letters available to deal with this and how would I go about raising a complaint in relation to The Lowell Group? Thanks.

Hello,

Welcome to the forum.

If you've made a payment or acknowledged the debt in writing in the last six years then these debts won't be statute barred.

The process for making a complaint is to complain directly to the company first (either by phone or writing a letter) and if you're not happy with their response you can refer it to the financial ombudsman.

I would suggest you get in touch with us for some advice on dealing with these debts rather than waiting for them to become statute barred. You can do this online using our advice tool Debt Remedy (http://www.stepchange.org/msehelp) or over the phone (http://www.stepchange.org/Contactus.aspx).

Regards

James

StepChange_James · 7 December 2012 at 5:19PM

Frida wrote: »

Hi,

Could someone provide a template or suggestion on how I should reply to this letter from DWP:
I am writing in response to your recent enquiry about the Prescription and Limitation (Scotland) Act 1973 and when recovery of debts owed to the Department may be time barred.

The Prescription and Limitation (Scotland) Act 1973 operates to extinguish a cause of action in Scotland 20 years after it arose or where 20 years has elapsed since it was last acknowledged or since effective recovery took place.

Provided the 20 year period has not expired, all avenues of recovery remain open to the Department. So if a benefit is is payment from which a deduction can be made, e.g. Income Support, Jobseeker's Allowance, State Pension, those deductions can continue. We can, as appropriate, also recover a debt from the estate of a deceased person.

The Act also does not prevent us from instructing any of our private sector partners to pursue repayment on our behalf.

What happens next

If benefit is in payment, deductions will continue to be taken until the debt is paid back.

If no benefit is in payment, recovery action will continue until a suitable repayment is in place.

If no payment is being made we:

-will write periodically as a reminder of the debt; the law allows us to do this
-may ask private debt collection agencies to recover the debt

Ti make arrangements to pay back the amount owed please contact us. Our telephone number is at the top of this letter.
My personal view on this matter [feel free to correct me if I am wrong] is that any alleged debt becomes barred after 5 years in Scotland [the alleged debt was a result of overpayment of benefits]. I do not believe they have the power to take this to court and they have no way to enforce this debt unless I'm in receipt of benefits or state pension.

So far I written to them to state that I do not acknowledge the debt and that I believe it is statute barred.

My intended next step is perhaps to write and ask them to provide proof that the debt actually exists. Would this be a wise move and if so does anyone have a template and some guidance on the matter.

Hi Frida,

Thanks for waiting for the response on this. My colleague in Glasgow has looked into this and their understanding is that benefit overpayments in Scotland have a limitation period of 20 years, like your letter suggests.

They did add the caveat that the law might have changed but it's unlikely this would have happened without them knowing about it.

They also said that your local Law Centre may be able to help you if you'd like some legal help to fight against this debt.

Kind regards

James

Benefit_Cuts · 7 December 2012 at 5:46PM

Thanks for the info James. Is there anything I can do to stop them adding erroneous information onto my credit report in the meantime? As far as I can tell from the correspondence and from looking at my credit report they transfer the debt between two of their companies Lowell and Red every 6 months and register a default each time?

StepChange_James · 7 December 2012 at 5:50PM

Benefit_Cuts wrote: »

Thanks for the info James. Is there anything I can do to stop them adding erroneous information onto my credit report in the meantime? As far as I can tell from the correspondence and from looking at my credit report they transfer the debt between two of their companies Lowell and Red every 6 months and register a default each time?

It's not unusual for debts to change hands from one debt collector to another and there isn't anything particularly wrong in them doing this if it's for genuine reasons. If they were deliberately doing this to harm your credit rating (and you can prove it - which is probably the hard bit) then I'm sure the Financial Ombudsman would take a very dim view of it if a complaint was escalated to them.

Complaining to the company first is probably the best bet.

Struggling with debt? Ask a debt advisor a question

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free