Newbie seeking advice

Shinysprite

Hello all,

Firstly, apologies if this has been covered (am sure it has, somewhere) - have done searches and found some posts sort of relating to my question, but am just looking for some more advice...

Bit of a long story but here goes...

After a *major* change in circumstances, I found myself facing a huge debt problem in 2001. After sticking my head in the sand and trying to muddle through for a while, in 2002 I entered negotiations with my creditors, sought advice from CCCS and ended up in reduced payment agreements with all my creditors (but not with a DMP from CCCS, just paying them myself, through regular direct debits/standing orders). I did end up with one CCJ but managed to satisfy this in early 2007, and have settled all of the smaller debts - paying off larger amounts whenever I was able to (usually when I received my annual bonuses from work). I should also say that, over the years, I have kept all of my creditors up to date with my situation and have re-sent income and expenditure statements whenever required, so I've always been paying them whatever I could afford at any given point in time.

Early last year, I was made redundant but shortly afterwards had a huge stroke of luck and came into a large amount of money. I began to make settlement offers to my creditors but managed to settle with only one of them, the other three large creditors being unwilling to negotiate, despite my history of regular (albeit reduced) payments. I could have paid them off in full but decided not to, and continued to pay them at the usual reduced rate (rather stupid decision, in hindsight, but I was annoyed at their unwillingness to negotiate and the fact that my good history seemed to count for nothing, so I just thought they could carry on taking what I was willing to pay).

I now find myself in yet another new situation. I am unemployed, have been for over two months, and am now unable to keep up my regular payments. I do still have some savings and have taken further advice from the CCCS on what to do next. Their advice is that I realise my savings and pay them all off. If I don't do this, I have nothing to offer them other than a token payment and I don't want my situation to get any worse.

Although I will have to pay a penalty for taking my savings out, I have no problem in doing this, as it will result in my being debt-free and happier in the long term, and able to start saving again when I do get a job, rather than forking out money to creditors every month - in fact, I know I would be stupid not to take this option! My savings will more than cover what I owe, BUT, here is where my question arises:

I don't want to use my whole savings amount (as I may need something to live off if I can't find work - the JobCentre has told me I can only receive JSA for six months) and would like to be able to settle with my creditors for smaller figures and still have some savings left over. CCCS have told me that what they will settle for will vary from company to company (my creditors are: CL Finance (DCA - account passed to them from First Direct/Metropolitan - overdrawn account/loan/credit card, total owed £7000), HFC Bank (loan, total owed £2700) and Egg (credit card, total owed £4450)), and that I should try to start my negotiations low and work up.

I've heard stories of people settling for as little as 20% of their outstanding debt but am sure I would never be that lucky! I'd just like to know what others have experienced when negotiating (and in particular, if anyone has experience with these companies), and what I can expect. Given that I have tried to settle before and they weren't interested, I'm wondering how I can now get them to change their minds - or do you think that the fact that the alternative to settlement is a token payment for goodness knows how long (til I find a job), will make them more amenable? Can I use goodwill (from my years of regular payments) as a bargaining tool? And how much should I tell them? I was thinking of saying that a relative has offered me the money to help me out and that it's a limited amount and available for a limited time. Presumably they don't have any right to know how much cash I do have available?

I realise I've asked a lot of questions here, and I kind of know what I really need to do but any reassurance/advice/words of wisdom from anyone that's experienced something similiar will be very, very welcome!

Thanks!

Shinysprite

Merlinexcalibur wrote: »

And did they also tell you you can move onto Income Based JSA? BTW, I don't claim it I went to Google it for you.

No, they didn't tell me that, and I've not come across it anywhere, either - thanks! I assume what will happen is that after six months, they will review my situation and tell me what other options I have (if any) - but I am praying to everything I believe in that I won't need to be on JSA for that long and that I will find work long before we reach that point!! As nice as it is to have some time off when the weather is lovely, I would rather be earning!!!

Shinysprite

Merlinexcalibur wrote: »

And did they also tell you you can move onto Income Based JSA? BTW, I don't claim it I went to Google it for you.

But ...


Not if your savings are over a certain amount. So if you DO have savings (can be easily looked up online on the relevant places) over that amount you may need to bring them down anyway or it will affect your entitelement to the income based part. Unless you are already claiming income based, of course.

The JobCentre does know how much I have in savings, which is why I'm on contribution-based JSA rather than income-based. If I use my savings to wipe out my debt, then yes, they will be lower and it may affect what JSA I could get (another issue entirely), but as I say, I hope it won't come to that. Anyone need a PA?!

Merlinexcalibur

Sorry, zapped my post whilst editing. You'd need to check with the DWP website but I did see a lot of forums in the few minutes I spent looking for you that said you can move onto income based JSA if your contributions one runs out.

I would rather be earning!!!

So would a lot of other people; but we have to prepare for all eventualities, adapt etc. How things are nowadays. Sadly.

There is a lot more you could be doing BTW with your debt situation but some of the others can suggest those. To 'negotiate with' etc.

There may be some useful hints in this thread here on some of the things you asked about eg !!!!!!, negotiating:

http://forums.moneysavingexpert.com/showthread.html?t=767025

Tixy

Have you checked with these companies that they hold a valid copy of the CCA? Particularly the one with the DCA. If you ask them for this first (standard template letter and £1 postal order) and they cannot provide you with it they are likely to accept a much lower percentage settlement.

Shinysprite

No, I haven't requested copies of the CCAs, is this my best first step? What difference will it make to my situation if I have this information? Apologies if I sound ignorant, I'm not completely au fait with all the various stages/legal positions, etc.!

Merlinexcalibur

Yes. The information is in that thread I gave the link for.

Tixy

As Merlin said it is all in that link but essentially if they do not have a valid CCA you have a lot more 'bargaining' power, and they will know that you are aware they don't have the correct documents. Therefore you could/should make you opening full & final settlement offer at a much lower percentage (say maybe the 20% you mentioned).

Shinysprite

Hi all, thanks for the advice so far. Just another question on this, though: reading through some of the posts relating to CCAs, I get the impression that once you request them, the account goes into dispute, is that right? I don't dispute any of the amounts I owe and would like to just get settlement amounts sorted out and paid off as quickly as possible, and with the minimum of hassle. If I request CCAs, do they automatically put the account into dispute? At the moment, all my creditors are aware of my situation and the fact that I've taken advice from CCCS, and they all seem happy enough with this and have put my accounts on hold pending my next step. Don't want to antagonise any of them...!

Thx!

stealeruk

What kind of money have you got? Is it enough to pay them all off in full?

Shinysprite

It is, but as mentioned in my original post, I would prefer not to use up all of my savings as I am on JSA and would like to keep some money back in case I need something to live off. All the money I have is tied up in a bond which doesn't mature for another five years so I will be heavily penalised for taking it out now as it is, although, as also mentioned in my original post, I'm not too bothered about this as it will be the best solution in the long term. I'd just rather not use all of it now if I can settle with my creditors for smaller sums.