DMP - HSBC Nightmare

Living_in_hope_4

Hi there everyone,

I am brand new to the site and dont really know what I am doing but I have a big problem.

Basically I recently entered into a debt management plan after very careful consideration. Previous to entering the DMP I had never missed any payments, which led me to paying my debts and increasing them along the way.

All of the debts were in the form of loans and credit cards. All of my creditors have agreed to freeze interest charges and have been superb in the way they have dealt with me. All of these except for the HSBC.

I have banked with the HSBC for over 20 years and I have a loan and a credit card with them. Prior to entering the DMP I had never missed payments and had kept my accounts in working order, I had only 2 years left to go on my loan and was paying off the capital. They have been sent a DMP financial statement however they are refusing to accept it and have said that I must take out a management loan instead over a 7 year period. I have refused so far to do this however they are hounding me on the telephone, and today have called me on my work phone even though I spoke to them yesterday for over 30 mins!

The lady today said that they will continue to call me everyday unless I agree to this managment loan, failing which they will issue a final demand and issue baliffs to recover the money, and that they will take me for all legal costs associated with this.

I am so terribly upset about the whole thing and I really do not know what to do. Should I take the management loan (even though I will be tied into more credit and more interest)? They say that they will continue to charge me so the debt rises by the day. I just think that they are being really harsh and I dont know what to do..

Can anyone out there advise me?

Thanks,

L I Hope

Tixy

Hi LIH.

I'm sorry I can't offer you advice on what to do - but I do know that what you should not do is take an HSBC managed loan. They are bad news - nobody on here has anything good to say about them.

Have you set up a new basic bank account away from HSBC? It needs to be an account with a provider that you don't have any debts with. This will keep you safe from the possibility of HSBC off-setting any income you have.

Also have you sent them the telephone harrassment letter to try to stop the calls?

Jesthar

Living_in_hope wrote: »

Should I take the management loan (even though I will be tied into more credit and more interest)? They say that they will continue to charge me so the debt rises by the day. I just think that they are being really harsh and I dont know what to do..

No, no, no, no and NO! Don't touch any such loan with a bargepole! :eek:

This isn't my specialist subject, but you need to talk to your DMP providers (you didn't mention who they are? ) straight away, as I think HSBC may be breaking the law here... :mad:

There was a thread last week by someone else being bullied like this, hang on and I'll see if I can find it and post a link...

~Jes

Edit: found the (short) thread: http://forums.moneysavingexpert.com/showthread.html?t=1645143

Living_in_hope_4

Hi,

Thanks for your response...

I have moved my banking away from them as I learned that they have the right to offset. I have a basic bank account and for the moment my salary gets paid into my partners account.

I am going to write a letter of complaint to the HSBC documenting all of the calls received, I just wish there was somewhere I could write to to expose them for what they are doing in a time where they should be helping us not to generate any further debts. I dont want to not pay my debts, and I am furious that they see this as an opportunity to make further money out of me. I told the lady who phoned me today that if I took out an IVA they would have to agree to which she replied 'well are you going to take one out?' I told her I wasnt and so she said that 'IVA's are dealt with differently'.

I am really at my wits end and I thought such an organisation wouldnt act in this way. Considering I went firstly to the HSBC to ask for their help. They said they couldnt do anything to help and so I found payplan (my DMP) on the HSBC website. SO they actually recommend Payplan, but yet they wont deal with them. I am so stressed out by it all. I just dont know how to deal with it.

Jesthar

Hey LiH,

First of all, relax a little - I know it's hard, but a cup of tea helps a lot!

HSBC seem to be making a habit of bullying people down the managed loan route at the moment, mainly because it makes them even more money! Remember - they only do what is best for them, not you! Don't stress out about their threats, they can't send in baliffs without a court order, and there is precious little chance of them ever getting one of those providing you keep up with your DMP payments.

I'm not 100% sure (as I say, this is not my specialist subject), but if you are on a DMP I think one of the things you have to agree to is not to take out any form of new credit for the life of the DMP? If so, they HSBC are in effectively demanding you breach the terms of your DMP, which in turn probably breaches regulations somewhere...

Regarding the harrassing phone calls, tell them that you will only deal with them in writing via PayPlan, and that any further calls from them will be recorded and deemed as harrassment. If they still call, then there is a template letter you can send them basically saying the same thing, after which you report them to the OFT.

*hugs*

~Jes

boo80

Hey LiH, Lloyds tried a similar thing with me, I phoned National Debtline to talk it through and they said that they are breaking the banking code by doing this as they are not allowed to offer more credit to get you out of debt, or something along those lines anyway! Hopefully someone will be along soon with advice on what to do, if not give NDL a call and ask them for some advice on handling the situation. In the mean time try not to worry about it, if the loan is unsecured they they can't force you to pay it back if you don't have it, if it does go to court it will work in your favour as you're trying to offer reasonal payments and the court will see this. B.x

Living_in_hope_4

Thanks Jes,

The DMP does state that so I will have alook into it. I just am so cross but I will have a cuppa, and maybe a dippy biscuit to help calm my nerves!

x

cyru24

Tixy wrote: »

Hi LIH.

I'm sorry I can't offer you advice on what to do - but I do know that what you should not do is take an HSBC managed loan. They are bad news - nobody on here has anything good to say about them.

Have you set up a new basic bank account away from HSBC? It needs to be an account with a provider that you don't have any debts with. This will keep you safe from the possibility of HSBC off-setting any income you have.

Also have you sent them the telephone harrassment letter to try to stop the calls?

The only reason people on here don't like Managed loans is because there don't understand how its works.

Its simple the MLA ( Mangaged Loan Agreement) work by combaining all debts you owe to HSBC e.g overdraft, credit card and personal loan (not mortages) at 7% above bank of england base so at the mintue its 7.5% APR, the typical credit card is 16.9% APR, Personal loan 9.9% APR, overdraft within limits 19.9% APR overdraft outside limit 29.3% APR so by combaining all the bebts on to a lower rate will save you money.

The bank is not breaking the code because there are not offering you new debt there just reschulding what debt you have with them and 99% of the time it will you be paying out less each month witch will help you get out of financial difficulities faster.

you will only be offered an MLA if you can not afford your normal monthly repayment but do have affordibility to pay sum thing back over within reasons you will need to go though an income and experence form with HSBC to find this out.

It works out a lot better to take out an MLA then to go to a DMC ( debt mangagment company) in most case these will rip you of by take a fee and change you to make the payments to your creditors each month, money tailor is the worst they take £115 for the first 9 months, what DMC won't tell you is if one of there offers are rejected you could end up been in final dement and having your debt passed on to a debt collections company its great for the DMC because there can poket more of your hard earn money but bad for your credit rating, the only reason why DMC's dont like MLA's is because its not seen as new credit your not breaking the agreement with and you can make over payments on the MLA any time you like with out getting charged so you can pay it of quicker so the DMC get less money

10past6

cyru24 wrote: »

The only reason people on here don't like Managed loans is because there don't understand how its works.

Errrm cough, 99.9% of the members on here DO understand how a ML works.

worried_jim

If your HSBC debt is passed to a dmc- good, they will be able to take a lower payment and interest will have been frozen, which may better than 7.5% on a managed loan. No one will ever turn up at your house, this is just the script that the HSBC staff are telling you. Court action would only be taken if you were refusing to pay and you are not- you have acknowledged your problem, spoken and entered into a dmp and your creditors are all currently receiving payments thru the dmp- what court would approve further action. In fact when HSBC call again tell them these facts, request that they remove your work tel number and just contact you at home on your landline, unless they physically remove your number from the database you will continue to received calls no matter what they say otherwise and any letters you send regarding harresment, well lets say they wont be to concerned , and regarding the banking code- its voluntary. Sorry i've ranted a bit but don't be pushed around you are doing all you can and please don't take any more credit. Good luck. Jim.

Cleosmum

Run away from the managed loan as fast as you can! Bad news! I didnt know any better years ago so felt I had no options, am still paying mine off 6 years later....:( Wasnt even my debt, my ex used my credit card but they werent interested.