Help please - owing money to childcare and being charged interest

kangy

I hope I have posted this is the most appropriate forum - I have been through them all and think this is the best one!

I started my teacher training in Sept 2009. Unfortunately due to needing surgery and therefore being absent for too long during the training I had to withdraw in the middle of January 2010.

I am a single mum of three children who went to a local after school club five nights a week. Because I left after the school term had started I was liable for the fees to the end of the term as this is the agreement they have. Obviously my tax credits stopped and I ended up owing them just over £800.

During this time my ex, the childrens father, was arrested on very serious charges and he lost his job and my children and myself were all interviewed regarding these charges. This is relevant because I lost all maintainence payments and, more importantly at the time had to deal with the emotional worry and fallout of this incident with my children and all thoughts of the money I owed went out of the window.

By the time I went back to them, around about 2 months had passed - but this included three first of the months. I went in with some money to put towards what I owed them and wishing to discuss repayments. It turned out that they had started charging 10% a month interest on any money owing them so my bill was now over £1000. I was very shocked about this as I had owed them money the previous year but they hadn't charged me - it turned out they had changed their agreement in the summer of 2009 and I had signed this agreeing to these charges.

I came away upset but worked out a repayment plan with the intention of getting it paid as quickly as possible. However I was pregnant by my new partner by this time and became very ill with high blood pressure and bleeding and this was a worrying time with me barely able to function and so much got abandoned including, unfortunaltely this bill which was increasing by over £100 a month.

At the beginning of May I handed in my two months notice on the house I was living in as it was too expensive to stay. In the middle o May I lost the baby at 4 months pregnant. So all in all it was a difficult time!

I saw the owner of the after school club in the June and they agreed to freeze the interest for two months but said it cost them money to have my debt so that was the longest they could do this. I was unable to get any money to them in the two months. Since the end of summer 2010 I have tried to get some money to them. In November the owners wife told me they had decided when I was able to commit to paying a regular amount a month they would freeze the interest again. I said I could afford £100 a month (I can't but I want it gone and will go without to do so) and she agreed to this so I thought interest would be frozen.

When I went in on Thursday 30th December to pay the £100 I saw they had charged my £104 interest on the £1140 I owed them at the end of November so my £100 I paid in November has been completely wiped out. Neither of the owners were there so I was unable to discuss this with them but when I do see them on Tuesday it seems that by then I will have been charged another £104 and my December payment will have been wiped out too.

I don't know what to do any more. All in all from my original £800 I have ended up owing them around £1600 - though money I have paid means it's the balance remains around the £1050 but it isn't even covering the interest.

I know I signed the agreement but I have no recollection of them pointing out to me the new charge - but that will be my word against there's and I should have read it. I do know it wasn't made clear that it had changed and even if I had read it I thought it was the same as before - and they hadn't charged me before.

Also in those first few months of charging me no one contacted me to see if I was aware I was being charged. I have received no statements.

I am going to see them on Tuesday but I don't see that anything will change. If I keep trying to pay the £100 a month I won't even cover the interest and I will get no where. I have debts that I am trying to clear off and while things are tight I can manage. BUt this I can't. If I get no where on Tuesday with them I intend to go to Citizens Advice but I didn't sleep last night for worrying and I hope someone here can help me in someway. I feel like I am tied into a loan shark and there's no way out and I didn't even know that is what I was signing up for!

I know I buried my head in the sand a little with this but I never ran away from them it was just the first six months of last year were incredibly difficult and with so much else to deal with something went I suppose and it was this.

Thank you very much for reading this far and I hope someone might have some words of advice for me to help me through to Tuesday!

Thank you.

PNPSUKNET

I think if you have other debts a dro is worth looking at.

kangy

Hi - thanks for your reply. I don't think a DRO is the right option for me - I have looked into it! But certainly it could have been had my circumstances been different. Thank you

BAILEYS6904

I think you need to wait to see what happens on Tuesday. It may just be that there has been an error in freezing the interest or whatever. However, please bear in mind that, although by the sounds of it you've had a hell of a tough ride, youve made anumber of agreements with these people, and not followed through until now. I would imagine their patience must be running a tad thin. Whatever you agree, make sure you keep to it. Would it maybe be an idea to do an SOA (Statement of Affairs) so that you can be armed with it for Tuesday, and show the incomings/outgoings you have, and make sure it is a reasonable offer for both parties?

kangy

Hi - thank you for your reply. I will take in an SOF - and yes you are right everything could be fine on Tuesday - but I am incredibly worried about this and just wanted some advice from here if anyone had any!

I would like to add - this repayment of £100 a month is the first one I have arranged with them in any form - and I have stuck with it. The initial repayment I worked out I didn't go to them with as I lost the baby before I had a chance to get to them. I have never avoided their calls and have kept them informed about my financial situation. I think the problem arises from the fact that I have had no formal letters or documents from them no statemnets or calls letting me know how it was building up - so it became very easy to allow time to pass. Yes I fully agree with the fact that I buried my head in the sand regarding this debt - but I didn't set up a repayment scheme with them and then not pay - I paid what I could when I could and only agreed the £100 a month in November. In total I have paid them back around £600. So while I know I'm at fault here for not getting things sorted sooner - I wasn't aware of the situation for three months - I don't want people to think I've made agreements I haven't stuck to because I haven't made those agreements.

jen_br

Hi, Firstly put things into writing everything from now on.. no more phone calls, no more meeting unless things are documented and signed by BOTH parties.

Secondly, Go to Citizens advice, have other kids filled the spots of your kids? (out of curiosity?)

I would be seeking some advice on this sometimes a letter from the CAB can go a far way!

kangy

jen_br wrote: »

Hi, Firstly put things into writing everything from now on.. no more phone calls, no more meeting unless things are documented and signed by BOTH parties.

Yes I will do that - thank you. I intend to get a copy of my repayment sheet from them so I have a complete breakdown of what I have paid and what they have charged. Because I am on friendly terms with the owners it has worked on a kind of trust level but really it hasn't .

jen_br wrote: »

Secondly, Go to Citizens advice, have other kids filled the spots of your kids? (out of curiosity?)

Yes! They had kids waiting so when mine left they filled the spaces straight away - so in effect they were being paid twice for those places. I suppose that's business!

Thank you.

geoffky

Can i just wish you a better new year than the one you have just had....things do get better but it takes hard work and things do not happen unless you make them happen....good luck

dippy

Hi Kangy,

Sorry to hear about your troubles. Am I reading this right? Are they charging you 10% interest a month, so that turns out to 314% APR (yes three hundred fourteen percent per annum)?

This is more than a loan shark. Get the CAB involved straight away, especially when you have other debt problems.

kangy

geoffky wrote: »

Can i just wish you a better new year than the one you have just had....things do get better but it takes hard work and things do not happen unless you make them happen....good luck

Thank you very much! I can't say I was overly sorry to see the back of 2010 . I am taking so much inspiration from reading around these boards.

kangy

dippy wrote: »

Hi Kangy,

Sorry to hear about your troubles. Am I reading this right? Are they charging you 10% interest a month, so that turns out to 314% APR (yes three hundred fourteen percent per annum)?

This is more than a loan shark. Get the CAB involved straight away, especially when you have other debt problems.

:eek: 314%!!!!! I had no idea it was that much as an APR!!!! I knew it was a lot but not that high - yes you are reading it right they are charging 10% a month. Thank you for your response - I will go to the CAB tomorrow first thing. Thank you.