Struggling with debt? Ask a debt advisor a questi...

[StepChange_James]

Originally Posted by kaydizz

Thanks James, Sorry just another question. Are all high street banks ok with a direct debit for a DMP being set up on their account. I have a basic current account with HSBC and no debts with them.

No need to apologise, it's what we're here for!

Yep, your HSBC account will be fine for a direct debit.

[I will win]

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???

[cooliegirl]

Hi

Please see my thread:

http://forums.moneysavingexpert.com/...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

[StepChange_Rachel]

Originally Posted by I will win

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

[StepChange_Rachel]

Originally Posted by cooliegirl

Hi

Please see my thread:

http://forums.moneysavingexpert.com/...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]

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]

Originally Posted by DaveK1971

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]

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]

Originally Posted by Benefit Cuts

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]

Originally Posted by Frida

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]

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]

Originally Posted by Benefit Cuts

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.

[Blindhat123]

In a bit of a dilemma with a debt collection company. Wonder if anyone can give me a bit of advise.
I recently asked for an early settlement figure on an unstanding debt which company agrred to. They sent out letter of confirmation stating that upon receipt of payment account will be closed and my credit file updated to show yhe account as "partially satisfied".
I have been advised that this is not acceptable as wording is very misleading, as it doesn't say anything about not be pursued in the future for the outstanding balance.
I have wrote 2x letters to the company (BLS Collections) requesteing that neither they or any associate company will further pursue this debt in anyway whatsoever and that i will be released from any liablilty.
They seem very adamant about not re-wording their letter so I don't know what to do.
Do I pay the early settlement not knowing if i will be pursued further down the line for outstanding amount, or should I forget early settlement and enter a DAS instead.

[Frida]

Hi James,

First I would like to thank you for taking the time to look into that and let you know that I appreciate the help.

So the question now is how should I proceed? I have a few things I would like to do and would be grateful if anyone can offer advice on how I go about doing them.

1. I would like to ask them to prove that I owe this debt and was wondering if anyone has a template I could use when writing to them for this purpose.
2. Is the local law center free and if so do you have contact details for them.
3. Finally I was wondering what powers they have to enforce this debt if I continue to not acknowledge it.

Cheers

[kaydizz]

Hello,

Do creditors require proof of rent/mortgage payments and copies of utility bills.

Thanks

[Alice in Welfareland]

Originally Posted by StepChange_James

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

Originally Posted by StepChange_James

Hi Stuffthemattress,

Thanks for posting, that’s a good suggestion. We always make it clear to our DMP clients that their creditors don’t have to stop interest and charges on a DMP. We regularly speak to people who’ve taken advice from elsewhere and have been given the impression that a DMP guarantees their interest will be frozen, which can lead to them being very disappointed if it doesn’t happen.

I’d say that we find the majority of the time creditors are willing to stop or reduce interest. The biggest factor tends to be if they can see that there is a genuine debt problem and the payment being offered is reasonable. This doesn’t guarantee a payment will be accepted but it certainly improves the chances.

Kind regards

James

None of this makes sense to me and these two posts seem contradictory.

If someone is just starting out on a DMP, their creditors will not believe they are in financial difficulty if suddenly they are offered more than the minimum payment when we have entered the DMP because we can not afford to make the minimum payments.

I believe this is due to Stepchange's method of allocating out payments to creditors based on the minimum payment due rather than the total debt. I honestly consider that this is beneficial to the banks but not us but if you are funded by the financial industry, you will want to look after them ahead of us perhaps?

Alice

[Alice in Welfareland]

Originally Posted by StepChange_Rachel

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 do not think this is correct but perhaps someone can clarify.

I have a debt which has been paid on a DMP for 2 years, the banks marks it on my credit record as AP or arrangement to pay, this is classed as a black mark and lowers my credit score considerably.

After 1 year then 2 years I can not increase my payments on my DMP, the bank keeps marking AP for another 6 months, then I lose my job and get a new job with less pay and have to lower my DMP payment. The bank gets angry and wants more money but I do not have it. After 3 more months they send me a default which then appears on my credit record.

This default then takes 6 years to clear so now my credit record is damaged for the 2 years plus the 9 months plus the 6 years. In theory the default can happen at any time in the DMP, even the last few months.

So in reality things can last on your credit record for much longer than 6 years. Correct?

[ChocolateTree]

Just wondered if someone can help with a couple of questions please. I've just received my pack from Stepchange (temporary payment arrangements). The debts are all in my name only, but the Income & Expenditure form and the list of creditors form have both mine and my husbands names on it. I've had to do it jointly as I have no income of my own. I've been advised to send a copy of each off to each creditor with £1 (monthly amount for each creditor) but I don't want to send it with my husbands name on. Can I cross it out?
Also, one of the debts is with an ex partner but it says "joint" giving the impression it's myself and my husbands debt when it isn't. Do I just write a note next to it explaining? And do I have to send the list of creditors anyway?
Don't know what to do and wanted to get them sent off asap. Thanks in advance.

[debtfreedreams]

Hi

I would be grateful for some advice regarding full and final settlements. I apologise in advance for the lengthy post.

I am currently on a debt management plan with Gregory Pennington. I currently owe £12,000 and ideally would like to strike a full and final settlement deal. I was planning to go through Step Change or Pay Plan. When I advised Gregory Pennington of this they planted ideas that they were not independent as they are funded by the banks and credit card companies. I realise that this is a sales tactic but it did get me questioning things more.


I live with my boyfriend and he luckily pays for the limited socialising we can afford. Anyway, the house (in my boyfriend’s name, as I couldn’t obviously get on the mortgage) has gone up in value by about £20,000 due to basic renovations, etc, and the fact that the area has risen in popularity. My boyfriend has kindly agreed to pay off my debt by re-mortgaging. I appreciate that a lot of people would advise against this. However, as a couple of the lenders have not frozen the interest, I am likely to be on the plan for another 10 years at least by my calculations and we both would prefer for me to be out of debt before 38!

Essentially, I would appreciate some advice regarding whether to make settlement offers myself or whether to go through Step Change or Pay Plan.


My main issues are:

1. Step Change have asked for a breakdown of my outgoings as part of the registration process that I am required to do in order that they can make full and final settlement offers on my behalf. I effectively maximised the amount as allowed during the process with Gregory Pennington (i.e. some parts where I overspent/were not allowed such as limited socialising or help towards house renovations would be put into other budget parts as long as those parts came within the recommended allowances).

I am therefore concerned as to whether if there are some indiscrepancies (Gregory Pennington will not give me a copy of the amounts offered) this information will get passed to my creditors who will get difficult.

Would I therefore be better making the settlement offers myself?

Do Pay Plan require this information before undertaking settlement offers on your behalf?



2. I have met all my monthly DMP payments since I started (although Halifax have kept changing the payment date and so I’ve effectively defaulted a few times). I’m therefore concerned that they will not see me as a liability. As far as I am aware the debts have not been passed on.

The only risk I could argue for is potential redundancy. I work in personal injury for a law firm and due to legislation cutting costs paid to law firms, many people will be out of jobs (there’s petitions on this basis).

I hope to be able to get out before then anyway as I am not suited to the work and would like to get into PR/marketing. However, this would require qualification costs and taking an entry-level job. I am confident I will succeed and ultimately earn more in the long-term as I will be more likely to succeed in something I am suited to and enjoy.

However, is it worth mentioning this? If so, how? And would I be better placed than Step Change or Pay Plan to make these arguments for a reduced settlement on the basis of this risk?

3. Lastly, should I advise Step Change or Pay Plan that my boyfriend could re-mortgage for the whole funds but would prefer to strike a good deal or shall I advise them I only have half the amount owed? I am obviously concerned that if I advise them of the truth that they will simply tell the creditors, who will then demand the full amount. Whilst I appreciate that I am responsible for my debt, a lot of my debt has been made up of interest and charges and I was young and irresponsible then. I’m also wary of using all of the equity in our house.

I apologise again for the lengthy post and thank you in advance for any help!


Thanks

[angelnn66]

Hello

This is my first time here and, probably like others here, I am in a constant state of panic over my debts. My husband and I have good jobs, but we have ammassed debts of around £30,000 on top of our mortgage. We have remortgaged as much as we can and are not coping at all.

Our wages last a week or two and then all of our food, petrol, etc. has to be bought on credit cards, as our money all goes quickly on cards and loan payments.

We've lived like that for years, but now we cannot get any more credit and our cards are all up to the maximum, so we can't get hold of any more money.

We haven't missed any payments yet, but we are going to this month for the first time. We have always had to pay minimum payments bu drawign money out from other cards. Christmas has sent us over the edge.

Neither of us can sleep, we are so worried, but we dont know what to do. Are we in debt crisis? I'm not sure whether we are, as we haven't actually missed any payments yet.

Any advice would be gratefully accepted, thank you