Struggling with debt? Ask a debt advisor a question

3431Anna

CCCS_Sue wrote: »

Hi 3431anna and thank you for your message

A creditor has the right to add charges and interest. All charges that can be added are stated upfront in the terms and conditions of the credit application which you are required to sign to take out credit.
In most cases, there is nothing you can do to stop interest and charges being added. However, if you make reduced payments over a long period of time, usually several months, most creditors will eventually stop charging interest and adding late payment charges.
Usually, a creditor will stop interest and charges either after they issue a default notice or they pass it onto a debt collection agency, although this does not always happen.

Regards
Sue

:T

Thanks for your help Sue, apparently the amount is at a reduced rate so i think that this is probably the best i can hope for at the minute once again many thanks for your help

nda1

I'm on a DMP with Payplan and have been approached by a company called Money Expert, who say they can write off 70% of my debt and finish the plan in half the time that Payplan can.

Is this right?
Neil

Bloodyelle

Hi, Wonder if you could clear up a question I have aboout CCJ's. I'm in the process of setting up a DMP. If one of my creditors will not accept the DMP and I end up with a CCJ can the creditor then add interest on the judgement made?

Thanks in advance!

CCCS_Sue

Janjel wrote: »

I was on a debt management plan about 4 years ago, one of the creditors was the credit union. The debt managment company i went through was so bad I ended up having to quit if 2 years ago and make settlement payments to creditors direct. I ended up in a lot of debt after being in a violent relationship and partner ripped me off - I got some money back from him eventually and paid creditors from it.

I assumed the DMP company were making payments to credit union as they listed they had - I did not hear from credit union whole time so assumed they were fine with agreement - about a year ago they contacted me to say they had not received any payments from me in over 2 years - i asked what was outstanding and they told me £500 - i paid this over 10 months as this was all i could afford and thought i had cleared this debt now they are saying that I owe an additonal £450 interest. If they had mentioned this at time I could have increased my payments a bit to allow for interest. I offered £225 to them as I feel interest accrued is partially their fault for not contacting me for 2 years and ignoring letters from DMP. DMP refusing to give back any money as I cancelled contract with them. This is such a mess now Credit union want me to their offices for meeting which I do not want to attend as feel they will intimidate me - cannot afford what they are asking and am borrowing £225.

Sorry for rant but really need advice.

Hi janjel and thank you for your message.

Credit Unions cannot charge more than 2% interest a month on the reducing balance of the loan,(equivalent to an APR of 26.8%).
This is quite high compared to high street banks or building societies, but usually lower than doorstep lenders or unlicensed lenders such as loan sharks.

I have attached a link to a booklet which gives you further information and also has advice on what to do if you wish to make a complaint. http://www.moneymadeclear.org.uk/pdfs/credit_unions.pdf

I would recommend that you attend the meeting first to see what they say and to see if you can negotiate a mutual settlement with them.

Try and make an arrangement to pay back the money at an amount you can realistically afford. I would not recommend taking out further loans to pay it off.
If you need more help, please call our free helpline on 0800 138 1111.

Regards
Sue

nda1

I'm on a DMP with Payplan. I've been approached by Money Expert, who cliam to be able to write off 70% of my debt and half the time of Payplan.

Sounds too good to be true. Is it?
Neil

lucasrose

Hi,can someone help please,i started my dmp this month and my first payment went out 1st sept but none of my creditors have been paid yet! Doe's this sound right i am worried as my next payment is due soon and i'm scared i'll be in trouble for not making payments.Thanks for your help.

movingonup_2

lucasrose wrote: »

Hi,can someone help please,i started my dmp this month and my first payment went out 1st sept but none of my creditors have been paid yet! Doe's this sound right i am worried as my next payment is due soon and i'm scared i'll be in trouble for not making payments.Thanks for your help.

While a payment is taken at the beginning of the month, the banks aren't paid until the end of the month. Some of mine went in today and some will go in Monday or Tuesday. Should be nothing to worry about

CCCS_Sue

movingonup wrote: »

Hi

I'm currently involved in a DMP with the CCCS, which I have been paying for the last 10 months. I have 12 different accounts involved in the DMP. Half of these are for low amounts (below £800). My wife (who is not financially linked to me), has offered to lend me the money to pay back some of the smaller amounts (about £2k worth).

Is it possible for me to write to these creditors offering a percentage of the total amount as a full and final payment. (If so, what is a suggested percentage? Creditors are Alliance and Leicester, Vanquis, Lloyds, Capital One and Barclays recoveries) If by doing this, does it effect the creditors to whom I have not offered final payments too? If they don't accept the percentage offer and we decide to pay the full amount, does that effect the other creditors to whom are still involved in the DMP but we have not made an offer too?

Thanks in advance. I obviously don't want to affect the DMP, but if I can reduce some of the debt in my name and save on interest in the future then that is obviously a positive step for me!

MOU

Hi MOU and thank you for your message

It’s great that you have a lump payment you can make to your DMP to clear some of your debt!

Before you contact your creditors, I would advise you speak to our client support team, so that they can explain in detail the best way to distribute the money fairly and advise you further.

Regards
Sue

CCCS_Sue

nda1 wrote: »

I'm on a DMP with Payplan and have been approached by a company called Money Expert, who say they can write off 70% of my debt and finish the plan in half the time that Payplan can.

Is this right?
Neil

Hi Neil,

There seems to be a lot of organisations offering “wipe-off debt” services for substantial fees. It’s worth noting that consumer credit debts will only be written off, if there is clear evidence that the creditor in question has breached the guidelines set within the Consumer Credit Act. The commercial companies offering to wipe off debts seem to be advertising this to the wider market, without prior knowledge to the individual’s financial situation.
The Manchester mercantile court has recently made a judgement in relation to the claims that such companies make. Their conclusions were:

The legal basis on which the unenforceability claims were based was misconceived
The lack of any specific evidence that no agreement existed or that, if it did it, was unenforceable was speculative and claims were an abuse of process
Even if agreements are unenforceable the money is still owed, can be pursued short of harassment and can be reported to CRAs
If you are in a position where you think your creditors have taken unnecessary action which breaches the CCA and have evidence that proves so, then you could consider going down the route of disputing the debt through County Court. I would be very careful of any organisation offering such services, especially when they are charging substantial fees with no guarantee of success, when it’s something that you could do for yourself.
My advice would be that if you do feel you have a case where you feel your creditors have breached the CCA, speak to someone who can offer free independent advice, such as the Consumer Direct.
More information can be found on the Office of Fair Trading website: http://www.oft.gov.uk/news/press/2008/consumeralert.
Regards,
Sue

CCCS_Sue

Bloodyelle wrote: »

Hi, Wonder if you could clear up a question I have aboout CCJ's. I'm in the process of setting up a DMP. If one of my creditors will not accept the DMP and I end up with a CCJ can the creditor then add interest on the judgement made?

Thanks in advance!

Hi bloodyelle and thank you for your message

It would depend.

A CCJ would include the balance owed and all the interest payable under the agreement. Once the full amount owing on the CCJ has been paid normally no further interest is payable.

Alternatively, the creditor may obtain a CCJ that includes court fees and interest up to the date of judgment. When the full amount owing on the judgment has been paid no further interest is payable, unless there is a clause in the original agreement allowing the creditor to claim interest after the completion of the CCJ.

Some credit agreements allow a creditor to add contractual interest to the amount of the CCJ. This has been confirmed as legally binding following a Court of Appeal case taken by the Office of Fair Trading against First National Bank.

While paying the CCJ, contractual interest may be charged on the amount that is owed on the judgment. This may not be made clear by the creditor.

If this is the case, when the original balance owed on the judgment has been paid, you could find an extra amount is still owed to the creditor, even though the judgment has been paid in full. To force you to pay this, the creditor would have to sue again.

Hope this helps to answer your question

Regards
Sue