£11k to settle £19k outstanding debt

Pepzofio

Mikeone wrote: »

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.

A DCA's prime motivation is to get as much money out of you as possible.

So they are unlikely to freeze interest if you are still making payments as there is no incentive for them to do so.

By the same token, court action is just a waste of time if you are paying anything, as judge is unlikely to order increased payments or award them costs.

A partial settlement is good for them as it is a large sum up front, and even though they might recover more in the long run continuing with monthly payments (esp if they are charging interest!) there is always the possibility you may default on payments, so it's a case of 'a bird in the hand'.

If you are just servicing the interest, try asking them to freeze interest, but if they won't it might be worth telling them that you have been advised to go bankrupt and are seriously considering it as you're paying all this money and don't seem to be reducing the debt at all... Hopefully they'll panic and agree to freeze the interest rather than have you stop paying.

And yes, good on you for not taking the easy way out. The one consolation I have about my OH's experience is at least he learnt some financial responsibility (albeit the hard way!) It just really winds me up when I see the banks throwing credit at people then passing them over to ruthless DCAs when they inevitably default. The fact that you were already making regular monthly payments (and not just token amounts, either) and they still screwed you out of more money by threatening court action has got me really cross on your behalf! :mad:

Good luck sorting it out.