Capital One scary letter - can anyone help please?

Carmencita_2

Back in 2003, my mum was finding she couldn't cope on her income and her debts were spiralling out of control amongs all sorts of nasty letters from Capital One. She went to the CAB, where a fab adviser helped her draw up an SOA and hekped her make offers of payment to Barclaycard, Capital One and M&S Credit card. All were accepted and the interest was frozen.

2003 Balance
Capital One £4191.28 (payment accepted of £3.39)
Barclaycard £5274.07 (payment accepted of £4.27)
M & S Card £905.87 (payment accepted of 73p)

fast forward five years...

2008 Balance
Capital One - £2070.80 (paying £49 a month)
Barclaycard -£3651 (paying £35 a month)
M & S Card - £547 (paying £5 a month)

She has been happily chipping away at the debt on very limited means since then. Every 6 months, Capital One have written to her requesting updated SOA, every 6 months in response she has tried to offer them a little more. In August, they wrote to her telling her that her reduced payment plan was coming to an end and to supply a new SOA on their form, with a box at the end for calculating how much she should be paying each creditor.

I did all that for her and we sent this off with the payment slips and bank statements requested,(I personally didn't think they had a right to see them but a year ago they refused her offered increase of £1 because she didn't send them so cue nasty letter.) showing that she had £93 a month left over to pay debt - the irony being that when I got to the end and calculated the distribution of her payments unsing their methods, we worked out she should be paying Capital One only £29, (she pays £49), Barclaycard £53 (she pays £35, they never give her any grief), and M & S card £8 (she pays £5, again they seem happy enough).

This morning she rang me in tears- Capital One has sent a letter dated 7th Oct, stating the following:
" Notice of default served under section 87(1) of the Consumer Credit Act

You have broken your Capital One credit card agreement because by entering into a long term payment plan with Capital One, you have made an arrangement with your creditors for a compromise about how much you pay them. This is a breach of your agreement as described in the section headed default. If you wish to cancel your long term plan, please contact us by letter or telephone within 28 days. If you cancel the long term payment plan then we will cancel this default notice and the action lsted below will not be taken. If you chose to cancel your long term payment plan, you will be required to make at least minimum payments required under your credit card agreement. You will also need to make arrangements to pay the overdue amount on your account.

If the action required by this notice is taken before the date shown, no further enfocement action will be taken in respect of the breach. If you do NOT take action required by this notice etc etc then the further action then the further action set out below will be taken against you."

It then lists terminating account, losing spending privelages and card(which she cut up and returned on request in 2003), you'll have to pay whole balance immediately, they will notify credit reference agencies etc etc. And then on the back there is all the scary stuff about taking her to court.

She is in a right state, very frightened that she will have to go to court and that her other creditors will also now demand full payment. She rang the number given and was put through to an adviser in India - they say the office she needs to deal with isn't open until Monday. I then got her to ring National Debtline but she then called me back in an even worse panic - the helpline guy told her to open another bank account immediately, indicated that her bank Barclays may now withdraw her £250 overdraft and also asked how much the house was worth and how much equity she had in it. Now she is frightened she is going to lose her home. (She owns it outright)

Can anyone give her some advice of what to do next?
National Debtline have said do NOT call Capital One on Monday-just start paying them £29. She doesn't want to do this and is scared they will send bailiffs round. I told her to go to the CAB again but it is 6 weeks for an appointment where she lives and Capital One want an answer within 28 days-should she just keep paying the £49 and wait for the CAB appointment or speak to Capitl One on Monday?

I'm very worried about her - she lives 250 miles away from me and is very distressed, worrying that she will have to go to court now or that her account will be frozen etc. TIA for any advice

scaredy_cat

hi, she should listen to National Debt Line, they know what they are saying.

There is a link somewhere about bailiffs... i'll find it and post it.

Here is it : www.bailiffadviceonline.co.uk

Someone with more advise should be along soon. If she gets any calls she should just put the phone down. These are bully tactics used to scare people like your mum into paying!!

I think she's a long way from being issued a court summons and losing her home. Opening another bank account which is not affiliated with Barclays is a good thing to do. If nothing comes from Barclays stppong her od, she can use it for saving!

If you want to get a second opinon on what NDL told her, call CCCS who are also a non profit organisation.

Carmencita_2

Thanks Scaredy-Cat - National Debtline didn't mention bailiffs at all, its just her mind working in overdrive now and of course, it being Saturday, she can't speak to anyone in Capital one - although I'm of the opinion that no-one can help in a call centre anyway and she should just do it all in writing. Why do these letters always turn up on a Saturday and wreck people's weekends?:mad:

She has brought her Barclays overdraft down from £750 to £250 but is maxed out on it every month and really, really doesn't want to open another account (she's banked with them for 30 odd years) but I guess it can't do any harm. The only other ones local to her village are Natwest and HSBC.

scaredy_cat

if she opens a basic account you only need £1. It's a fallback account really.

GeorgeUK

She is being advised to open a new bank account so that any money such as wages being paid in to that account cannot just be seized by Cap1 to pay off the debt. If she has no income being paid into that account right now, then she is okay.

She cannot pay more money than she has. It sounds like Cap1 are no longer going to accept a payment plan and are intending to put a default on her credit file. Has she checked her credit file to see if there is currently a default already on there? These sound like automated letters and i'm sure alot of the threats are saying they "may" do this or that.

As they are saying she is in breach of her creditcard agreement, i would send a request for the agreement - you may have seen CCA requests being mentioned on the board before. She has a legal right to request a copy of the customer credit agreement (CCA) at any time (with £1 fee) and they have 12+2 working days to supply this before the debt is deemed unenforcable. After this time, she can write and inform them that under the Data Protection Act, she is denying them the authority to pass on her personal details - this should hopefully stop them putting a default on her account if they cannot produce an enforcable CCA (with the prescribed terms).

If they don't have an enforcable agreement, then court action will be difficult for them as at court they will be required to produce the original CCA.

Details: http://forums.moneysavingexpert.com/showthread.html?t=578486
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Carmencita_2

Thanks George-her salary, pit pension (from my late dad) and widows benefit are paid into Barclays so we'll need to make arranegements to put them into another account. She gets v upset when I mention an extra account but I'll do me best.

As I understand it, defaults are on her credit file for all 3 of the cards because she is in a voluntary payment plan with them and so has defaulted on the original agreement? Will write and get a copy though-ta for that tip.

Should she ring Capital one on Monday or just deal with them in writing now?

shinyhead

Hi,
The letter she received was a fairly standard default notice. In fact 'm surprised she hasn't received one before. This is the first step in the process a creditor should take if the 'debtor' is on a reduced payment scheme, and is usually dished out soon after any reduced payment schem starts.

It doesn't mean that C1 are about to start legal proceedings.

Before bailiffs are allowed to come round a CCJ must be granted and then only if you default on the payments. If your Mum owns a house they would probably go for a charging oredr that secures the debt on her property. That's a long time down the road yet.

How long ago was the account opened? Obviously before 2003 but how long before that?


If she has an account with Barclays and a Barclaycard I do suggest she open another one not connected with them. There is such a thing as right of offset that means they can suck any money in that account to pay off the Bcard. Use the new account as the working account and get DD's, SO's and income assigned to it.

I also suggest she get in touch with CCCS for advice and possibly ask for their help in setting up a DMP. CAB are great but overloaded usually. CCCS is quite probably overloaded but they are usually quite easy to get in touch with.

Your mum's had these accounts for a long time so there is also another route that can be gone down by requesting a copy of the original Consumer Credit Agreement (CCA) from the creditors. If she can't get online then have a look yourself about doing this by looking through the threads here.

Hi George!

scaredy_cat

bump.... shamless

Leixlip1

I've had the same letter from Cap One. I've been paying them under a self-managed dmp for 18 months and as this will be long-term they have now issued a default.As long as payments are made as agreed there will/should be no problems.
I've found Cap One one of the most helpful of my creditors but appreciate the worries caused.

Carmencita_2

Thanks so much for all your replies, I've read them out and she's a bit calmer. She won't read the thread at the moment because the thought of bailiffs is stressing her out so much.

Shinyhead-my mum thinks that the account was opened in 1999/2000.

worndown&desperate

Hi
As a a bit of an old hand now of this process - (13+ creditors) - tell your mum not to panic - this is just the first letter in what can be a lengthy process. Unfortunately, financial institions do all they can to scare & bully.

As others have said, bailiffs can only come if you are in breach of a court order. Even if your mum does end up in court, they will only make her pay what she can afford.

If she gets in touch with the CCCS, they are incredibly helpful.

Unfortunately being in debt forces us all to toughen up, but everyone here is always full of good advice.