What would you do?

earthmother

I do my own DMP, and have had a letter today from one of the creditors who haven't been very helpful so far, offering a 'restructuring' of my debt, with 3 years at 0%.

At the moment, although the account is non-interest bearing, they are adding between £12 and £24 a month in admin fees, and have basically said there is no way they'll stop doing that, unless I go through a third party, which I am unwilling to do (tried it once before, didn't work out for me), or get the CAB to sign off on my SOA, which I can't do as it's literally impossible to get hold of them (been trying for some time now), so the debt some months is growing rather than shrinking.

The debt over 36 payments, (to avoid the 39.9% that would kick in on payment 37), equates to less than £3 a month more than my current SOA allows for this creditor, but obviously I'll have the issues that the other creditors may not appreciate it as I'll effectively be taking them off the DMP, and it'll be a fixed payment, so if our income drops, we'll be stuck again.

3-3.5 years is about what it would take to pay off our debts if everyone stopped their charges - unfortunately, whilst we're still getting some charges applied, it keeps extending the period, so in some respects it would be a benefit to all.

I'm trying to decide if stopping the admin charges makes up for possibly annoying my other creditors, and loosing the flexibility the DMP allows.


So - as the title says - what would you do?

GeorgeUK

Have you reclaimed any charges for this debt?
Is the debt actually enforcable?

I have seen this type of offer given before when the creditor doesn't have an enforcable credit agreement and they are then getting a new agreement signed which would make the debt enforcable.

Have you requested a CCA for this debt?

Tixy

It does sound tempting to go with their offer. Maybe you could effectively take the £3 out of your expenses (maybe groceries) without it showing on your SOA (thereby not telling the other creditors that is what you are doing.

Do you have to sign a new agreement with this creditor? Have you asked what happens if you do have a reduction in your income? You don't want them to start charging 39% interest if you have to break the agreement.

One other thought (and sorry if you've considered this) could you ask CCCS to sign off your SOA instead of CAB? I would think your creditor would accept this and I would imagine CCCS would be happy to help, even if you don't want to do your DMP with them.

earthmother

George - I hadn't thought of that. As far as I recall, I never signed anything originally, but at the same time, I ran up the debt, and so I should pay it. I've not reclaimed charges as I didn't think that applied to catalogue debts, but only to banks and cards.

Tixy - when I spoke to them, they didn't mention signing anything, described it more as a rearrangement of the old agreement than as a new one. Apparently if I do break the agreement, it'll just get handed back to the in-house DCA that are dealing with it at the moment.

I never thought about asking CCCS if they'd sign off - thought they only did the full DMPs - it was them I left a few months ago though, as they weren't passing payments etc on and I was getting more charges with them than without, so I'm not sure how useful they'd be. I'll give them a call though in case.

Tixy

Catalogue debts often don't have a CCA. Definatley worth doing a CCA request as George suggests.
If they don't have it they should be much more likely to accept your DMP and stop charging interest & charges.

Daffykjs

If you don't want to ask CCCS what about asking Payplan or even National Debtline?

less than £3 is very tempting tho! do you think the other's would even notice it didn't quite equate?

just because you get your CCA doesn't mean you don't pay it back! but it does often make the creditor more reasonable to deal with coz they know they don't have a leg to stand on if you did decide to stop!

worth getting anyway i'd say!

dancingfairy

I'm sure someone kept paying all they could as per their self admin dmp but kept getting charges added on - in the end they wrote a letter saying that the bank/creditor encouraged people in financial difficulty to seek help and had even recommended contacting CCCS (I think? ) who had advised them to do a dmp so why were they not being helpful. I think they put in a bit about the fact that banks/financial conmpanies had to treat people fairly and how on earth were they supposed to pay it all back if they company wouldn't even stop charges and how was it fair to keep piling on the charges?
I can't recall the exact circumstances but I think the above is the gist of what happened - I think they got the charges knocked off in the end as well after the stern letter but I'm not sure.
Perhaps a strongly worded letter would be good - enclosing your SOA and requesting 1) they stop the charges and 2) they knock them off the debt to give you half a chance?
df

GeorgeUK

If there is no CCA, then the debt is not enforcable. This means they can't enforce any part of the debt including adding interest, charges, putting a default on your credit file and, oh yes, requesting payment.

As the catalogue debt falls under the CCA74, and charges they make for admin etc are not allowed to be for profit and can only be to reclaim the amount they incurred in the cost of whatever the charge was for. Exactly the same as the bank situation.

dancingfairy

can I just clarify - do you mean that the charges have to be fair and the OP can claim them back?
df

GeorgeUK

Charges must reflect actual costs incurred and not exceed damages the bank suffered due to breach of contract. This means the banks (or any contract that falls under the CCA74) can't enforce these charges as this would breach the "unfair terms" legislation. It doesn't cost the banks £39 to send an automated letter stating that you are overdrawn.

It has been a very long time since i've looked into this - i stopped when the court proceeding started against the banks in 2007. There should be more detail on the bank charges board or the consumeractiongroup forum though.