£11k to settle £19k outstanding debt

Mikeone

Hi everyone, I’m trying to clear my debts, and have been made an offer for the biggest of them. I was hoping that some people here might be able to offer some insight or opinions to help me deal with it.Apologies if this is the wrong forum, I wasn’t sure if it belongs here or in DFW.I currently owe Natwest Bank £19,459. Bit of a long story, but essentially I had a student overdraft back in 2001, which I was unable to pay off (working for Natwest as it happens!). I was given a staff account while working there (plus overdraft), and was sold their Advantage Gold account (plus overdraft). It was difficult to settle the overdrafts and I was offered a loan to pay them off. I couldn’t keep up with the payments, fell into arrears, and was offered a loan to clear the arrears. This happened a few times over a couple of years, the whole thing snowballed, and I racked up over £20k in debt. I’m currently paying £250 month in an agreement that was negotiated about 18mths-2yrs ago. The agreement has been renewed every six months (December and June) since then, with the exception of December 2008, when the company didn’t contact me and the agreement simply continued. I was recently contacted by Triton Credit Management, who I understand to be owned by RBS Group anyway. The debt has been passed to them. I was asked for a one-off payment of £250 in addition to the £250 regular payment. I was told that if I made the payment, the monthly payments could continue. If I didn’t make the payment, legal action would follow. I was able to find the money, and the payment schedule has continued. I asked if I would be required to make another “one-off payment” when the time comes to renew the agreement again. The agent said that she didn’t know.While dealing with this, the agent from Triton said that they would accept a payment of £11k to clear the debt. It sounds like a great offer –it would finish off my dealings with the RBS Group (which would be great), prevent any future “one-off payments” and shave £8k from my debt. The only way for me to get £11k to make an immediate payment would be to take out a loan. Although I’d like to be debt free, if the offer is genuine, it would save me money and help me to pay the debt off more quickly, especially if I can get a loan for less than the “about 17%” (Triton’s words) than I am currently paying in interest. The difficulty is, my history with Natwest means that I have several default notices on my credit file (with both Experian and Equifax). It therefore may be difficult for me to obtain a loan. I’d like to maximise my chances, and was thinking of writing to Natwest to ask them to remove the default notices, or at least reduce them to one (representing the debt). What I’d like to ask is:• Is the reduced payment offer from Triton/RBS genuine? Has anybody been made a similar offer?• Is there anything else I can do to maximise my chances of securing a loan?• Are Natwest likely to adjust the default notices, and is there a specific angle I could take when making my case to them?Any help, comments or suggestions anyone could offer would be greatly appreciated.

CLAPTON

maybe rephrase with 5-6 bullet points?

manumadmel

I payed of a £4500 credit card dept for £1600 they offerd this to me after I was made redundent and couldn't pay min payments. but my credit as been affected

Mikeone

Apologies, was using an old laptop with an old browser and the formatting was all squashed up. Here goes again:

• I currently owe Natwest Bank £19,459. The debt has built up over a number of years when the bank kept offering me loans to pay off arrears on loans I had already taken out.
• I’m currently paying £250 month in an agreement that was negotiated about 18mths-2yrs ago. The agreement has been renewed every six months (December and June) since then.
• I was recently contacted by Triton Credit Management. They said that they would accept a payment of £11k to clear the debt. It sounds like a great offer –it would finish off my dealings with the RBS Group (which would be great), prevent any future “one-off payments” and shave £8k from my debt.
• The only way for me to get £11k to make an immediate payment would be to take out a loan. Although I’d like to be debt free, if the offer is genuine, it would save me money and help me to pay the debt off more quickly, especially if I can get a loan for less than the “about 17%” (Triton’s words) than I am currently paying in interest.
• The difficulty is, my history with Natwest means that I have several default notices on my credit file (with both Experian and Equifax). It therefore may be difficult for me to obtain a loan. I’d like to maximise my chances, and was thinking of writing to Natwest to ask them to remove the default notices, or at least reduce them to one (representing the debt). What I’d like to ask is:
• Is the reduced payment offer from Triton/RBS genuine? Has anybody been made a similar offer?
• Is there anything else I can do to maximise my chances of securing a loan?
• Are Natwest likely to adjust the default notices, and is there a specific angle I could take when making my case to them?

CLAPTON

It's quite common for DCAs to accept lower amounts to clear debt (Full and Final Offers).
Ensure however you have it in writing that this is a F&F and the debt is now settled.
It will probably show on your credit file as partially settled although you can negotiate about this.. must be in writing of course.
It would be worth making your own offer ... say you can only raise xyz (maybe start at 8K).

However, if you credit file shows defaults you are unlikely to get a loan... Unlikely that Natwest will remove the default as it was properly applied.

However, you have nothing to lose by applying for a loan.

aimingforadebtfreelife

Hi Mikeone,

The full and final settlement offered by Triton is genuine. Its been passed by RBS onto a debt collection agency as its not cost effective for them to collect and for tax reasons as well if they sell on your debt it is off their "bad debt" books.

Now Triton is actually owned by RBS- its their in house debt collection company so they have transferred the debt to another part of the business. So you are speaking to a RBS employee - basically they need to get some money in quick so they have offered you quite a large discount.

Now here is the snag. Under the Consumer Credit Act they have to report your conduct of the loan to the credit reference agencies to provide other lenders a true picture of how you conducted the repayments. Unfortunately unless they have made an error they will not remove the defaults. Therefore the chances of a £11k loan are non existent.

Unless you were remortgaging or could secure funds from parents/relatives its not going to happen.

There is one route you could go down - if you have not heard about it already. The loans you had some have be drawn up with the correct papaerwork. Many haven't and can be used as a tool to get a better settlement. By writing to Trition you can request a breakdown of what the balance is made up of (ie 1, 2 3 or more loans) and request a copy of the Consumer Credit Agreement you signed when taking them out. You have to enclose a £1 postal order payable to Triton as thats the standard fee.

*** Reason for postal order is that some companies have been known to copy your signature from a cheque onto some unsigned documents!!****

They have a set timeframe to respond to you. When you get the forms check out www.consumeractiongroup.co.uk - they have a debt section and also a RBS Natwest section where if scanned they can look at any failings on the paperwork. It will make the debt unenforceable but it means you can make an offer of say £4k to clear a £19k debt.

Sorry if put a downer on settlement - the only loan you may get will be crippling interest rates.

Pepzofio

They're not going to take you to court if you're paying £250pcm. As not only are they unlikely to be awarded higher repayments by the judge, but I doubt they'd be able to continue charging you 17% interest.

Have you checked whether you are actually reducing your debt with these £250 payments, or just servicing the interest? As it may actually be in your best interests to stop paying unless they freeze the interest. You may end up with a CCJ, but to be honest, if your credit rating is already stuffed, this is unlikely to make a lot of difference, and if you go for the partial settlement this will also damage your credit rating further anyway.

Pepzofio

Mikeone wrote: »

It was difficult to settle the overdrafts and I was offered a loan to pay them off. I couldn’t keep up with the payments, fell into arrears, and was offered a loan to clear the arrears. This happened a few times over a couple of years, the whole thing snowballed, and I racked up over £20k in debt.

This makes me so angry. I know everybody has a choice whether or not to take credit out, but chucking more debt at someone who is clearly struggling to manage their finances is completely irresponsible. If I were you I'd be tempted to look at whether bankruptcy is a viable option (if circumstances allow it) and s0d 'em.

I'm all for taking responsibility for your actions, but when a large part of the debt has accrued due to loans being taken out to repay interest/arrears on other loans/just to keep your head above water I think the banks have got it coming.

My OH went down the partial settlement route (I had to clear the debts on 0% interest CCs and he paid me back) but rescheduled the biggest loan to try and rebuild his credit (luckily Halifax were really good and gave him a low interest rate with the option to overpay & reduce interest charges) and frankly, I wish he hadn't bothered. He still can't get a mobile phone contract in his name nearly 5 years after the event, having kept up perfect loan payments in all that time.

Mikeone

Thanks everyone for your comments. It looks like taking a new loan out might not be an available option then. I’ll set the grey matter to work on coming up with an alternative method of coming up with the funds, but in the meantime, I’ll review my options.

• Claiming the CCA was incorrectly completed. I have heard of other people doing this, but I understand it’s controversial to do so. It seems like something of a drawn out process, but I’ll keep it in mind. Now I’m out of the naïve years that got me into this mess, I’m making the effort to understand my finances in detail. Obtaining the full paperwork would help with this anyway, so I’ll do that and consider claiming against the CCA.
• Bankruptcy. I really don’t want to do this. My current default notices will be removed from my credit file in 2014, and this is one of my targets that I’m working too. I’m trying to do things ‘right’ from now on and to make each step a positive one. Besides, I’m fortunate enough to be able to comfortably make the current payment arrangements.
• Stopping the interest. This is something which I thought I’d asked for before. (The £250 per month was organised with the help of a debt counselling charity, and they suggested this). I’ll check if the payments are just servicing the interest, but do I have to go down the CCJ to get this? Is it possible to say to Triton, “we would end up in court, but neither of us want this, so can we just stop the interest to let me pay off what I owe?”

Can I also ask if anyone knows –what is a DCA’s prime motivation? Is it to recover all the funds, to recover at least a partial amount (in the knowledge that few people will be able to make full payment), to earn interest etc? It might sound like a facile question, but it’s an honest one. I know that, for example, banks are motivated by profit, so I understand what they are looking for when they deal with customers and potential customers, but what about DCAs (even in-house ones). If I understand what they are most keen to get, it will help me in my negotiations with them.

Also, Pepzofio, the situation made me angry too. I feel that I was exploited for my naivety and desperation, and having worked for a bank, can see on reflection how the entire retail banking system is set up to do this. However, I’m in this situation now and I can spend my energies getting angry, or I can spend them getting out of the situation. I’m firmly fixed on the latter. At the very least, I’ve had a very good (albeit painful!) financial education through this, and I’ll never be so exploited again. Nor will I let it happen to my friends or family.

ILW

Mikeone wrote: »

Also, Pepzofio, the situation made me angry too. I feel that I was exploited for my naivety and desperation, and having worked for a bank, can see on reflection how the entire retail banking system is set up to do this. However, I’m in this situation now and I can spend my energies getting angry, or I can spend them getting out of the situation. I’m firmly fixed on the latter. At the very least, I’ve had a very good (albeit painful!) financial education through this, and I’ll never be so exploited again. Nor will I let it happen to my friends or family.

You have just renewed my faith in human nature.
I truly wish you the best of luck.

CLAPTON

as triton have already made an offer, clearly they are willing to accept less than the full amount.... exactly how much will only become apparent after you make an offer.