Scared - Help

wanttosavemorespendless

Hi
I have been really stupid and wondered if you can provide me with any advice. My story as is follows :
I have debts of around £27000 and started an informal agreement with Spectrum Financial Protection based in Keighley Yorks 5 years ago. I have been paying a nominal sum to each of my creditors for that time. I was advised at the time of entering into this arrangement that I had to pay the company £233 for a period of three months to enable them to set up the arrangement which I duly paid. I was advised at the time to save as much as I could each month and that I would be able to cash in my endowment at the end of the period of five years and with my savings and cashing in of my endowment policy I would be able to use this to make a Full and Final Settlement payment. I have had minimal contact from this company.

Unfortunately I have not been able to save a lot each month but have managed to save around £5,000 and I have contacted my endowment policy company who have told me that instead of having around £11k to cash in that I would only receive around £8K due to the economic crisis.
I know that this will not be enough to pay off all of the debts.

I am scared to call the company in question as I do not know what will happen, yes I am a bit of a coward and I havent told anyone about this. I know I am not helping myself.
Any advice would be gratefully received as I am going out of my mind with worry (all my own fault).
Thanks

dancingfairy

Hi - I'm not sure who advised you to save up and cash in your endowment policy? was it the company you owe money to? a financial adviser? a debt charity?
Basically you have 2 problems:
1) that you have a debt that needs to be dealt with and
2) that you endowment has fallen short - you may be able to claim misselling or you may have been missinformed along the way. You may be able to get compensation if you were missold the endowment.

Oh - I'm sure people on here can help with the full and final settlement - 13k seems like a large settlement especially if you have been paying them for 5 years.
You may also want to investigate the validity of the original credit agreement you signed - as it was so long ago you may have to request it from the company themselves (via a specific letter) as it may well have more holes in it that a piece of swiss cheese which would give you more power when negotiating a final settlement with them as if the legal agreement is not watertight then technically they dont' have a leg to stand on , as far as I know.
df

NorthernLas

Spectrum Financial Protection seem to be a debt management company who pay your creditors and ask you to save at the same time so that F&F can be made. They have been on watchdog and are not open to new business.

See CAG thread (initially from 2006 but has recent posts on it as well) http://www.consumeractiongroup.co.uk/forum/showthread.php?42962

OP: I would advise you to speak with CCCS or NDL or CAB (see the sticky at the top of the forum).

Spectrum will be charging you a management fee for the work they are doing. You can do this yourself with the help of an organisation or people on this forum.

You need to know how much you still owe to your creditors. Then work out what to do next with advice from people on here or organisations who will not charge you.

wanttosavemorespendless

Thanks Dancingfairy and Northernlas

I have done some calculations tonight and I feel alot better, I will call Spectrum tomorrow regarding my F&F payments. If the creditors settle at 50% then I will be fine, if not then I will be stuffed. Do you know if the creditors will accept 50% or if not could they extend the payment period?

I just dont want to pay anything else to Spectrum as I have calculated that I have paid them more than I have actually paid my creditors (at the time of taking this informal agreement out I didnt know any better but thanks to this board I certainly do now).

I actually received a letter from Spectrum regarding one of my creditors and they are offering me up to 75% of the debt if I pay soon. Unfortunately it is the smallest debt I have !!

Thanks again

sofababe

If u have a list of all your creditors write and ask them for a statement which u are legally entitled to on an annual basis. This will tell u what the current balance is and once u have all the info u will be able to work out how much to offer. For instance if u owe £20k in total, one of the creditors is owed £4k then that is 20% of the total debt so u offer them 20% of the £13k u have available. BUT as dancingfairy says, ask for the original agreements as that will possibly give u more bargaining power. U can't really decide what to offer until u know what u owe. Post back when u have the figures

wanttosavemorespendless

Thanks Sofababe
Is there some sort of template letter that I could use or am I just asking for a statement !
Spectrum are supposed to be dealing with that side of things, i wonder if when I call them they would be able to give me a current list of balances owed ?
Thanks again

sofababe

If Spectrum can't help, though they certainly should be able to, I would compose a letter something along the lines of

Dear Sirs

Account no.XXXXXX

I request that you send me a copy of the latest statement with regard the above account which you are legally obliged to send me annually as stated in the Consumer Credit Act 1974, by return of post.

Yours sincerely

XXXXX


Nothing fancy, just straight to the point. They have no reason to be difficult so u should receive it pretty quickly


ETA: I would be inclined to do the F&Fs myself as its likely that Spectrum would skim their share off first and u've paid them enough already.

wanttosavemorespendless

Thanks again Sofababe, will ask Spectrum first as they should have the balances. If not I will get straight on to the letter.

wanttosavemorespendless

I dont buy the latest things, my debts go back a while when I was very silly. I enjoy being thrifty too. I have not been able to save more as I have had to pay for my dads funeral and help my mum out if she needs me. I cant not help her out. I havent told my mum about my debts as I dont want to worry her.
I cant even remember that last time I was out socially as my friends dont go out either !!
I have enjoyed saving the money that I have got and when I get out of this hell then I will enjoy saving the money even more !

sofababe

Once your settlements are done and u are DEBT FREE:j:j:j you'll have learned how to live frugally and to save. Continue to do this and you'll be fine. I think I'd have 2 savings pots, 1 would be a proper savings account (ISA?) where u could perhaps put the equivalent of what u were paying to Spectrum, and the other would be a "treats" pot so that u could either feel OK about going out for lunch/drinks with friends or save for something u want but previously couldn't afford (ipod/GHDs/kindle/whatever).
I've just got one large monthly payment off my back:j and when my mate asked if I was coming out this weekend I said yes straight away instead of thinking "can I afford it?". I'll only spend £20 or so but its so nice to be social again. But I have learned to scrimp and save and will continue to do so and get the rest of my debts paid off asap.