Help & Advice Required

I_Know_I'm_Not_Alone

I'll try and keep this as brief as possible, but have only just discovered this web site and need some advice please.

Firstly, I've got myself into terrible trouble and my personal (unsecured) debts amount to £66K, spread over loans and credit cards. Although I earn a good salary (£40Kpa) I have been continuously living off credit since I left school (I am now 36). Unfortunately, I have a passion for cars and I can attribute most of the debts to the depreciation each time I've bought one.
I am married and have a wonderful 2 year old son, but my wife didn't know (up until now) about my problems. Having realised I cannot stay afloat anymore (I was constantly robbing peter to pay paul so to speak) I decided to face the facts and deal with it. My wife was absolutely heartbroken but for the time being, she is still with me.

I contacted the CCCS, who I spoke at length with and they helped me work out a financial statement for onward transmission to my creditors basically offering them reduced payments, circa £350 a month (it turns out I was actually paying in excess of £1000 a month). They then gave me the choice of contacting my creditors for me or allowing me the chance to do it. As I wanted to address the issue myself (as my way of showing my creditors that I was dealing with the issue personally) I contacted all of them, showed them my financial statement and offered them a reduced payment. Everyone single one of them turned me down and said they would commence proceedings against me, starting with default notices. It's perhaps worth noting at this point that I had never missed a payment before and advised them all ahead of actually missing payments.

Anyway, feeling excpetionally dejected, I spoke with a collegue who had recently been in the same situation and recommended a company called Spectrum Financial Protection. Having felt so dejected, and I guess without thinking properly, I arranged to see them and they spent the best part of 2 hours telling me how they can get my reduced monthly payments accepted AND how they could get approx 50% of my debt written off after 5 years. I was obviously deleted and signed up on the spot. I understood that I would be paying them a fee for 3 months (£545p/m) and then my reduced payments (of £310 they got me down to) would start. I was advised not to talk to any of my creditors in the meantime and not to pay them anything either.

I paid £545 at the end of September and the second £545 went out of my bank today. However, I've become suspicious that they're actually not doing anything as I'm still receiving lots of calls from my creditors (almost to the point of harrassment) saying that they haven't heard from Spectrum. Everytime I ring Spectrum personally, the person on the other end of the phone really doesn't seem interested and tells me to ignore them.

Having subsequently done a search on the internet, I note there is some bad comments on this company on this site. I have also now heard of PayPlan and think I might be better of with them as there's no cost to me.

So, down to the advice/questions.

1. Am I wasting my time and money with Spectrum, and is it true that I am more likely to get proper help with PayPlan because they are industry recognised (and industry paid for I believe).
2. On the basis that Spectrum have (possibly) on written to my creditors to inform that they are working on my behalf, can I cancel my contract with them and in turn go to PayPlan for help? If so, do you think there is any chance that I could get this months money back (I can accept losing the first months fee).

All comments welcome, and apologies for the long post.

lynzpower

hi there

You may be wasting your time with Spectrum. I really dont know, having never intervened with them. However, I DO know that they take a cut out of the payments that they take from you, ie they are a profit making company, not a charity, like CCCS and Payplan.

I suggest you do a SOA ( incomings, outgoings & APRS)_ read southern scousers sticky, "first time posters" and use MArtins budget planner at top of the page.

Until then we cant give advice, but you are right in the fact you are not alone, all of us have found ou5rselves living with debt we cant abide or afford, and you are in good company here, well done for finding us

Stick up an SOA and lets see what we can do
Welcome :wave:

all_hours

Did Spectrum mention IVA? It sounds as though that's what they are planning if they are going to write off 50% of the debt but at the moment there hasn't been a creditors meeting? I wouldn't pay them any more until you've clarified exactly what the situation is. Could you contact your bank and ask them to reverse todays payment?

Contact payplan - the link is at the top of this forum. They don't charge you fees but if you did do an IVA the IP they put you in touch with does take their fees out of your payments. But payplan could advise that a DMP is more suitable for you.

I_Know_I'm_Not_Alone

An IVA was dismissed by CCCS originally and subsequently dismissed also by Spectrum - I think the reason is because there is an amount of equity in my house (which is 50/50 with my wife).

A DMP is without quesiton the one for me apparently.

What about writing off monies after a period of time? The CCCS originally told me that sometimes it is possible, say 5 or 8 years down the line to offer a one-off payment in full and final settlement. Is this realistic?

fast_track

It is never going to be a good idea to pay for what should be a free service. It does sound like they were trying to sell an IVA to you. However if a company takes up front fees for an IVA they are not likely to be motivated to do all the work involved in setting one up.

For you to be able to take on an IVA with your level of debt then you will need about £550 disposable income each month. If you cannot manage this then you should consider bankruptcy. If you want to go down the IVA route then you should contact Payplan or Baines and Ernst. Payplan will refer you to Shaws who specialise in IVAs.

Good luck

livinginhope

fast_track wrote:

If you want to go down the IVA route then you should contact Payplan or Baines and Ernst.
Good luck

No,no,Baines and Ernst are also in it for the money like Spectrum.Stick to CCCS,Payplan,National Debtline or sometimes the CAB.

all_hours

I_Know_I'm_Not_Alone wrote:

An IVA was dismissed by CCCS originally and subsequently dismissed also by Spectrum - I think the reason is because there is an amount of equity in my house (which is 50/50 with my wife).

A DMP is without quesiton the one for me apparently.

What about writing off monies after a period of time? The CCCS originally told me that sometimes it is possible, say 5 or 8 years down the line to offer a one-off payment in full and final settlement. Is this realistic?

I don't think you can guarantee writing off any of the debt of with a DMP. If they said they could then I think you've been mislead. You don't have to pay fees to do a DMP - contact payplan they'll organise it for free.

I_Know_I'm_Not_Alone

Sounds like I need to get rid of Spectrum doesn't it.
If I've signed a contract with them, wha's the likelihood of being able to get out of it? Anyone with experience of them?

fast_track

Payplan do a free DMP but you will pay them, via Shaws, for for an IVA.

If you have equity then anything you do is dangerous as your creditors can go to the county court for a CCJ against you then, when you cannot pay in full, apply to put a charge on your house then force a sale.

If you really want to keep your house then you could secure your debt against your home or accept a voluntary charge on condition that your creditors don't force a sale.

I_Know_I'm_Not_Alone

I do want to keep my house and don't want anything attached to it because firstly it's not all mine (my wife would need to agree to an attachment order which she wouldn't) and secondly because it effectively means that if I default (which I wouldn't intend to) then they can force a sale and a young family is potentially out on the streets.

I've left a message for my case worker at the CCCS to contact me as I'd like to discuss it with her - it's too late to stop payment to Spectrum for this month, so that's the 2nd month in a row I can't afford to pay anything to my creditors.

chevalier

As far as Spectrum are concerned, you would have to check the agreement you signed to see what would happen if you terminated the agreement. You may have to pay a fee to leave if you see what I mean. I gather from other posters that even if you do a DMP via CCCS or Payplan, you still get a lot of phone calls from creditors, whilst the DMP is being set up. But after a couple of months they stop calling. Providing you keep up the payments as per your DMP then all should be fine.

What you have to remember is that if Spectrum are taking money off the money you pay to them, then you debt free date will be further into the future due to this. Doing a DMP via CCCS or Payplan would mean that your Debt Free Date would be sooner, because part of your payment was not being eaten up with fees. So say Spectrum say it will take 15 years to pay off the debt, CCCS or Payplan may say it will only take 12 years because there are no fees going to them.

In the meantime you have to think about how you spend money and why you do. If you post a Statement of Affairs as has already been suggested, then it will give you an insite into where your money is going each month. Which may mean you can spot some obvious savings, which in turn will give you more money to pay off your debt.

You are right you are not alone. There are things you can do. You can get out of this. It will be hard work, and you will need the support of your wife to do it.

The very best of luck
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