Debt help needed please

Gillw123

Hello,

Im trying to help a friend that has debts totalling £21,400.00 with several companys. He is working a 17 hour a day to try and meet the costs and they have also sold him ppl so trying to get that back as well.
The interest is a lot and by the time he has paid the minimum amount, by the time they have added the ppl charges and interest he is owes more each month!!

Spoken to Debt Free Direct and they are going to look into IVA or a debt management plan, but not sure if this is a wise move or not?
They also want him to open a new bank account with Chelt and Glouc or secure trust bank and have mentioned something about an "interest only mortgage"?
He has already remortaged so thats not an option.

Thanks in advance with any advice, we are not 100% sure if we are going the right way about this?

Gill

niccatw

Have a look at this thread for info on the free companies out there that can help https://forums.moneysavingexpert.com/discussion/2077631

Also, if you post a statement of affairs (SOA) with all the incomings, outgoing, debts with totals and APRs, the good people on this site will be able to suggest areas your friend may be able to cut back on or other options that may be helpful. You can fill it in here and copy it to a new thread on the forum.

Good luck

RAS

Gill

Please stop talking to Debt free Direct immediately. They take very large fees to do exactly the same as the debt charities who do not charge for DMPs and rarely advise an IVA (which is a form of insolvency that has to be declared for the rest of your friend's life).

Please get him to speak to one of the debt charities listed here http://www.moneysavingexpert.com/loans/debt-help-plan#help

He will need longer term help re consumere credit agrements, CCJS and possibly charging orders. There is a LOT of help and advice here that the debt charities (and the fee=charging companies) will not provide, so get him on-line.

he does need a new basic bank account with any company with which he does not have a debt. There are loads - Co-op and Barclays even accept people who are currently bankrupt

complimentschemistry

RAS is totally right, I started using a DM company who took £400 in fees from me and didn't even contact all of my creditors!

I would personally get in touch with Payplan, who I use and are very very helpful people. They will send your friend a pack via post or email and will guide you through writing down your I&E, etc. They also remind you that creditors by law have to accept your offer, so long as it's over £1.00 per month.

Hope this helps a little, good luck.

Happytogetdebtfree

Hi and welcome to the boards all the best to you and your friend :-)

3Dogs

complimentschemistry wrote: »

I would personally get in touch with Payplan, who I use and are very very helpful people. They will send your friend a pack via post or email and will guide you through writing down your I&E, etc. They also remind you that creditors by law have to accept your offer, so long as it's over £1.00 per month.

I would query this statement as I believe that a DMP is an informal agreement and creditors do not have to accept any offer. Someone may confirm this for me ..................... or otherwise of course .............

However, your debt management company will assess your income and expenditure to come up with a fair balance available for debt repayment. You will then pay this amount each month to the company and they will pass it on to your creditors, on a pro-rata basis, the higher amount going to the largest debt, etc. Any queries from creditors you just refer them to the debt management company and they will negotiate with the creditors. You just quote your DMP reference number.

Any free debt management company will organise a DMP for you but no-oe can guarantee that interest/charges can stopped, although fee-paying ones often claim that they do. Under no circumstance use a fee-paying company as they will take a monthly fee from the money you pay them meaning that less money goes to paying your debts. With a free debt management company, all your money will go towards clearing your debts.

Check out CCCS on freephone 0800 138 1111 or www.cccs.co.uk
or put your details in online for advice and recommendations by using their Debt Remedy service -you can click onto this from their home page. If you want a DMP there is an option to be sent a pack with sample letters, advice, etc
National Debtline at www.nationaldebtline.co.uk
or check PayPlan (DMP free but may try to sell you insurance, etc)
or visit Citizen Advice Bureau either online or your local office

Oh, and if you do contact Debt Free Direct, they may tell you things like 'but the free ones are funded by the banks so they are on the side of the banks' or 'wecan guarantee creditors stop charges/interest and free ones don't', don't be swayed by them. Remember what I said above about interest/charges and note that the banks are charged a levy which the government use to fund debt advice from CCS, National Debline, PayPlan and CAB only, so they are not obligated to the banks.

Whoops - that got more long winded than I had planned -I just got carried away - it's late and I am tired ............... sorry

3431Anna

I have an appointment for a phone call from Pay Plan this afternoon, they said that I need to have all my accounts ready, I wonereder what happens if they approach your creditors with a payment offer and the creditor doesn't want to accept this amount, could they decalre you bankrupt, i am worried about them contacting my creditors incase this might happen

never-in-doubt

3431Anna wrote: »

I have an appointment for a phone call from Pay Plan this afternoon, they said that I need to have all my accounts ready, I wonereder what happens if they approach your creditors with a payment offer and the creditor doesn't want to accept this amount, could they decalre you bankrupt, i am worried about them contacting my creditors incase this might happen

See how you get on with PP and then if you encounter issues, consider the unenforceable route - bit complex to go into on here but all info can be found on pages 1 & 2 here: Unenforceability & Template Letters III

Don't worry about the debt though, its not worth stressing over and the creditors have little to act on other than to default/ccj you which we can easily fight if necessary..... Just ask, if you need help - lots of useful and helpful folks on this forum....

Thanks 3Dogs -
Regards to the poster that said "legally a creditor must accept an offer" - this is not accurate and should be ignored. A court may not issue judgement if you offer the basic minimum due to affordability, which is subsequently declined by a lender - but that is a whole different story to say earning £30k per annum and offering £12 per annum repayments.....

3431Anna

thanks for your help, I will see what pay plan say this afternoon and will post again then, I know these debts are mine and I am responsible for them an do want to pay them back but the interest rates are adding on as much each month as i am paying as i can only afford to pay the minimum payment thanks again

never-in-doubt

3431Anna wrote: »

thanks for your help, I will see what pay plan say this afternoon and will post again then, I know these debts are mine and I am responsible for them an do want to pay them back but the interest rates are adding on as much each month as i am paying as i can only afford to pay the minimum payment thanks again

Thus unenforceability could be an option, sod morals they mean nothing in court

See how you get on, if it all gets too much then come speak to me.

dinky1923

Hi,

I have a letter from Hamptons Legal regarding a debt of £7.00. They are threatening Bailiffs and a possible charging order. I have called my local Court and asked what the minimum amount of debt that could be taken to court. They have said that there is no minimum but whether the company would want to pay the court £30.00 to take the balance through the court. Do you really think that this will make it to court?
thanks