writing a letter to loan co

rabb

Hi all. This is a bit of a long story so please bear with me.

I took a loan out for I don't know, around 8k, in 2003. I'll hold my hands up I was being incredibly economical with the truth. At the time I was a uni student and only worked during the sumer hols, at a bank funnily enough, I never defaulted and paid 180 a month. Anyway around 2006 the company called me offering me further lending, presumably because I always paid and thus had a great credit score. I was by this time working fulltime. I took a further 3k I believe and cleared a credit card bill. Again all payments were on time - now paying 220 a month. October 2008 I had since retrained as a school teacher but was working as a supply teacher and the work was unpredictable and sporadic. I again successfully took on further borrowing with same company - now paying 353 a month. I was now finding my finances increasingly difficult to manange with rent, cc, personal loan etc. As I had zero income during last summers 6 week hol I again succesfully took on more borrowing. I'm presently paying 377 a month over 48 months. The problem, however, is that I'm now at breaking point. I also owe 3k on credit cards and have invariably withdrew credit card money to deposit in my bank merely to avoid defaulting on the loan (yes I know this is financial suicide!). AT PRESENT: TOTAL LOAN 13,700 TOTAL AMOUNT TO BE PAID 18,500

Well I've simply decided something has to give. I'm writing to the loan company telling them I simply cannot meet the payments. I'm certainly not going to renegotiate the loan over further years as that will just be costing me and more in the long run. I'm going to propose paying them 165 a month over 7 years. That will completely repay the loan EXCLUDING the interest, their take, of course. Should they not agree I will close the bank acc down that the money is deposited from. If 377 is going out of there very month it will be continually overdrawn and therefore I will be paying bank charges every month. I only use the acc to pay this loan. So if they don't agree to this I'll have little option but to close it down to try to stem the tide, for want of a more apt description. I will also have credit card bills to clear, one of which ive secured a balance transfer but the other one ive been refused. I propose to just pay these off as best I can.

ANY advice on what you think there reaction will be and the consequences for me will be much appreciated. From 2003 to Dec 2009 I've been the perfect customer in terms of making payments. But now, in part due to my own excesses combined with my current unpredictable employment as a supply teacher I can no longer make these payments. I will add finally that my credit rating is not something I'm particularly concerned about in all this, solving this immediate problem is my immediate goal.

tlc123_2

Hi there

Ultimately, you took the loan and credit card and therefore it is your responsiblity to repay it. I think that to tell them to effectively stop the interest and extend the term of the loan won't go down particularly well!
My advice would be to consider a second job, or something with better pay so that you can afford your repayments. Or maybe see a debt counselling charity ike Payplan or CCCS.

Also, post a Statement of Affairs (SOA) on here and the clever people may be able to save you some money which will in turn give you more money to free up.

I really would not advise stopping your payments or stopping the direct debits if they don't take up the offer of the reduced payments.

Sorry if its not what you want to hear

T x

rabb

thank you for the reply. No I don't for one minute believe that my proposal will go down too well. A (SOA) is difficult in that my income week to week is a lottery. Some weeks working 3 or 4 days, other working 1 or 0 days. Obviously next 2 weeks will be 0 days. Basically, on a Sunday night I have no idea what the next week will bring.

As I have no dependants and no assets as such their is little that the company can take from me. There other options would be to (A) sell the debt for a lesser value or (B) take me to court? Is that correct? It is not as if I'm refusing to pay what I have borrowed. I don't for one minute claim to be acting particularly morally, I simply cannot cope with the stress any longer. Yes they will not be getting any further interest off me but nonetheless they stand to come out of it better than pursuing option (A) or (B) surely? Ive been paying the loans for 6 years continuosly so I'd summise that they've made a 4 figure profit on me already. Clearly they won't see it like that, I'm just stating a fact.

rabb

Just forgot to add I do know of an instance where somebody I know wrote to a credit card company with whom he owed 3k. He told them he may be forced to approach a credit company to help him with his debts. The credit card company wrote agreeing to scrap his interest on the 3k, he obviously could no longer use the credit card, he's still paying it off monthly and it's down to 1.5k I believe.

rabb

can nobody offer their opinion on what the likely outcome would be? Ending up with a terrible credit rating isn't something I'm concerned about.

Emmzi

rabb,

either they agree to a plan or you get a CCJ and they try to sell your possessions.

I suggest a plan through CCCS or similar. It's more likely to be accepted.

But I also suggest SOA on the DFW board. They have amazing ways to cut down. Which will be useful even if you go to a payment plan.