Can I move one DMP debt to reduce interest charges?

barbiedoll · 28 May 2017 at 9:12AM

Hi all...not been on this board for a long time but need a bit of advice.

We're in a DMP (Stepchange) which has been rumbling along for a few years now.

3 creditors, two of which have stopped interest, so our debts have reduced nicely as we've gone along.

A Marbles CC debt has been taken over by Robinson Way. We pay just over £40/month, of which almost £20 is interest charges, which they will not drop, despite repeated requests.

So....couple of questions. I may be able to borrow the money from a family member to pay this off in full, hopefully at a reduced full and final sum. Would my DMP allow this (in light of the other two creditors?) The original default has dropped off my credit file, would this "reactivate" it in any way?

Also, on a debt of roughly £1700, has anyone any idea what sort of F&F I could/should offer?

It's so annoying, the other debts are more than halfway paid off, this one is like a noose around our neck. We've already had a complaint about Marbles upheld by the Ombudsman, after they charged us extra interest and our debt went up after we entered our DMP. We just want to get rid, even though we'll still be paying the debt, we will clear it a lot more quickly without paying so much interest (which is listed at 12.68%)

Any suggestions gratefully received!

sourcrates · 28 May 2017 at 1:25PM

Hi,

Robinson way will only be managing the debt for marbles, the reason they are still charging interest is because the account has not yet defaulted.

Stop paying it, and it will soon default, the debt will then usually be sold on after a while, and you would be able to settle with the new owner.

Its unlikely marbles will offer much discount at present.

The problem you will have is stepchange will not sanction the above policy, and may end your DMP, possibly time to think about self management ?

barbiedoll · 28 May 2017 at 5:13PM

Ah, that's interesting....I thought they'd sold the debt on, didn't realise it was just being "managed" by RW.

Not sure about self-managing our DMP yet, after the horrors of being in debt, the calls and letters etc, having someone else to shoulder the burden has been such a relief. It can be a bit inflexible though so I can see your point!

Hypothetically, if I did just stop the payments, would it mean any more credit file markers? The original default was over 6 years ago and I don't want to be blacklisted from, for instance, new bank accounts etc (am thinking of switching current accounts soon)

I could just leave it jogging along but it really bugs me at having to pay the huge interest charges every month!

sourcrates · 28 May 2017 at 5:37PM

Oh so it has defaulted already ?

Looks like they have bought it then.

What sort of debt was it ?

They can only charge interest on certain debts.

barbiedoll · 29 May 2017 at 8:17AM

I assume it has defaulted? We only paid token payments for a couple of months, then a reduced sum, which was/is less than the minimum monthly payment, after setting up the DMP (the debt is/was a Marbles CC in my husband's name, we have a joint DMP)

Our DMP started in 2010, so the debt is older than that and I have a letter from Marbles from 2016, stating that the debt has been moved to NewDay Ltd and (I quote) "The total balance sold was £2064.01"

We now receive a monthly statement from Hoist Portfolio Holdings, with a letter from RW enclosed. I daresay they paid a lot less than the balance to buy the debt, which is why I was thinking of offering F&F?

Apart from anything else, my husband will be retiring in a few months so our income (and our DMP payment) will most likely have to reduce. It's going to take forever to clear this one!

sourcrates · 29 May 2017 at 11:32AM

If the debt was a credit card, and it has been sold on, no further interest will be payable.

A debt collector/purchaser, cannot charge interest on a debt unless the original agreement allows them to do so, most running credit agreements covered by the consumer credit act do not allow for this.

You can make settlement offers by all means, start low, you can always increase your offer, always do this in writing, if you search the National debtline website under "sample letters" you will find the template letter to use.

barbiedoll · 29 May 2017 at 12:16PM

sourcrates wrote: »

If the debt was a credit card, and it has been sold on, no further interest will be payable.

A debt collector/purchaser, cannot charge interest on a debt unless the original agreement allows them to do so, most running credit agreements covered by the consumer credit act do not allow for this.

You can make settlement offers by all means, start low, you can always increase your offer, always do this in writing, if you search the National debtline website under "sample letters" you will find the template letter to use.

So they've been charging us interest since Aug 16 (when they purchased the debt) even though they're not allowed to? The cheeky beggers! :mad:

I can't believe that I let this one slip by me, that's almost £180 that could have gone towards paying the debt off.

I'm definitely going to make a (low) offer and will remind them on my letter, of their "error" in interest charges.

Thank you so much for this sourcrates, I'll give Stepchange a call later this week and ask if I can remove this debt from our DMP so that I can hopefully get shot of it.

What do you reckon....start off at £300? (Bearing in mind, that will include the erronously charged interest payments, so nearer £500, which I will definitely point out to them!)

sourcrates · 29 May 2017 at 12:54PM

As I said, you really need to check your agreement and see what it says on it.
You can request a copy at anytime, info here on CCA requests :

https://www.nationaldebtline.org/EW/sampleletters/Pages/Information-about-your-agreement-under-the-Consumer-Credit-Act-%28sole-name%29.aspx

barbiedoll · 24 June 2017 at 5:54PM

Just an update on this thread (and another query!)

I sent RW a letter, requesting that they immediately stop all interest charges on this account, along with a refund of the interest charges from Aug 2016, when they bought the debt.

I reminded them that they are not allowed to add to my original debt but, to be sure of this, I also requested a CCA.

I got a reply earlier this week, confirming that they have "noted the dispute/query on this account", and that they will be in touch in due course. In the meantime, they have stopped collection of the account. (They have cashed the £1 cheque)

So...2 questions.

What is likely to happen next from RW? If I get a CCA copy, which, I hope will mean that they can't charge any more interest, will things just carry on as before? I'm happy to carry on paying but I want my whole payment to go towards reducing the debt. Of course, they may not be able to produce a CCA, so what then? I know this means it may be technically unenforceable, so would a low F&F be feasible?

What do I tell Stepchange? Can they redistribute my payment to my other two creditors in the meantime? I don't want to upset the applecart, and I don't want any expectations of continued higher payments towards the other debts, as I may have to carry on paying RW anyway.

I wouldn't mind self-managing our DMP but our income will drop considerably in around 6 months time and I don't know if I can face dealing with creditors when I will possibly have to reduce payments. One is a Capital One CC debt, they have been great and it's for around £1200, so I'm not too worried about that. But the other is an old NR loan (now with Cabot) for £13,000 and I don't want court cases etc if I have to lower the payments.

Not sure where to go from here?

sourcrates · 24 June 2017 at 7:07PM

Have just re-read your post, if Hoist have bought your debt, then Robinson way will be managing if for them, but they should still not be able to charge you further interest.

For now continue making your regular stepchange payments, I am unsure which piece of legislation Hoist are relying on here, to be able to charge you interest, unless the account never defaulted.

Wait and see what they come back to you with before you do anything else.

barbiedoll · 28 July 2017 at 5:23PM

Sorry to drag up my old thread again, I know there's lots of people on here wanting help but.....

I sent a letter asking RW to stop interest and asked for a CCA too. They cashed the £1 cheque and I received a letter stating that they were handling my query and would reply to me in due course. In the meantime, they've still taken interest payments amounting to almost half of our monthly repayment amount.

I'm starting to get cross now so I've drafted a further letter. Can someone please take a look and let me know if it's ok to send?

I put in the "Complaint" header as I know you have to exhaust official complaints procedures before getting FO involved.

Dear Sir/Madam.

PLEASE CONSIDER THIS LETTER AS AN OFFICIAL COMPLAINT.

Further to my letter to you, dated 12th June, and regarding your reply to me dated 17th June, I am enquiring as to why I am still being charged interest on the repayments on the above account.

I understand that it may take some time to locate a copy of my original Consumer Credit Agreement as requested. However, unless this document states that you are permitted to charge interest on the original debt owed, bearing in mind that you are not the original creditor, I fail to see how you can continue to justify adding interest charges to this debt. These charges amount to almost half of my repayment sum each month, and are making it very difficult for me to repay this debt in a timely manner.

You are aware that I am repaying the amount owed via a Debt Management Plan with Stepchange. You are also therefore aware that I am in financial difficulty. You are obliged to consider debtors in difficulty, sympathetically. I would also add that you are the only creditor who has declined to freeze interest charges on my debt.

Therefore, if you are not willing or able to either provide a copy of my CCA, showing that you are entitled to charge interest on my outstanding sum owed, or to freeze the interest and refund to the account, the interest charges that you have taken since purchasing my debt in August 2016, I shall have no choice but to seek advice from the Financial Ombudsman about this matter.

Please note that if no copy of my CCA is forthcoming, legally, the debt shall become “unenforceable”. I have no intention of not repaying this debt but if you persist in charging unreasonable interest on the outstanding amount, I will reconsider my position.

Any comments gratefully received!

Can I move one DMP debt to reduce interest charges?

Comments

Categories

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