Payday mess and solution maybe

Super_Ram

Hi All,

I was not sure where to post this so thought I would post it here.

I have been reading a few topics around sorting out payday messes and have kind of formulated a plan of what I am going to do to sort mine which doesn't involve not paying them.

Firstly my sitaution is I have 4 paydays(don't ask) and have got to the point where I am just paying them off and then having to get them out again to survive. On top of this the interest is killing me and its just a vicious circle I need to get out of.

My Loans are

Company: PTPD
Borrowed: 485
Interest: 145.41
Paying back: 630.41

Company: WD
Borrowed: 485
Interest: 140
Paying back: 625

Company: Wonga
Borrowed: 550
Interest: 213.70
Paying back: 763.70

Company: OML
Borrowed: 300
Interest: 90
Paying back: 390

So in total I am paying 589.11 in interst each month to them which ultimately is down to my fault but I cant go on paying this.

So my plan is to

Step 1 - Transfer my wages to go into another bank account they cannot touch

Step 2 - Cancel all my DD on original bank account so Loans cannot be taken and re-setup bills on another account

Step 3 - Ring and advise bank not to authorise any setup of any direct debits on account for paydays.

Step 4 - Ring Paydays and advise I cannot afford to pay them and need to arrange a monthly payment instead.

So after doing this I will have saved 589.11 in interest.

From here my 2 options are to either split the 589.1 into 4 parts and pay what I can to paydays and then do a similar thing each month till all paid off. Or what i could do is pay off the OML of 390 to get rid of that payday and that leaves me with 199.11 which I can split 3 ways to the other paydays as the 1st payment in monthly installments.

Now there are a few questions I have which I am unsure of which are:

1. What rights do the paydays have in terms of what action to take. I mean is there next step to pass to a debt management team which I am not too fussed about as can setup monthly payments with the fine.

2. What sort of effect will it hav on my credit rating which is bad anyway but just wanted to know?

3. If I ask my bank not to set any direct debits on my account from requests by these companies am I covered from any unauthorised charges if the companies do this and try and take the money and the bank dont stop it?

4. Also is there anything else I should be worried about apart from harrasment form these companies which I can handle

5. Most imporatantly what happens with interest in terms of will they still charge me the same interest every month i dont pay or should it freeze?

Thanks for any help or advice

millionaire_in_training

ouch. Shameful what these companies charge. I can't answer any of this but I am sure if you check the terms and conditions of your loans then they will answer all of the above. WIsh I could help you and good luck

TheBex

Jeeeeeeeeeez! Those rates make me feel a little bit sick...

This is pretty desperate, but not paying them is not going to help.

I very rarely say this because they are a limited resource but your best bet, in my mind, is to call a debt charity - see the sticky at the top of this board - tomorrow and see what they say. In this position I would cut work to do it because this situation needs to be brought under control ASAP.

One other thing to try is visit your bank, show them you have a steady income (they can see this obv) and that you have these huge outgoings, see if they can get you sorted with a loan at a sensible rate or even an OD to pay it all back with. The problem of course with consolidating is that it won't stop you doing it again.

Your plan of action sounds v bad, but in answer to one of your questions, the PD loan peeps can't just set up a direct debit, they would need your permission.

Good luck Mr, keep us up to date.

mrs_skint

Hi there SuperRam I am in exactly the same position as you. I owe just under £3k to these people and cannot afford to rollover any more (no pun intended!). I have been in touch with a company called "payplan" (google them, you can input your details online and they will get back to you). They have all the tools and advice to enable you to self administer and debt management plan. However, the PDs will probably try to threaten, bully and harrass you into paying. Tell them you will only make contact in writing and not to call you. They might try and call you at work, in which case write a letter of harrassement and tell them you will report them. (All these letters are on any of the debt charity websites - national debt helpline has template letters as well).

As far as your bank is concerned - I am closing my old one and opening a new one. The PDs can only set up direct debits on your old account, and if you have any money in there at any time, they can and will take it. If you need to use your old account then report your debit card lost and get a new one. Keep a close eye on any direct debits that may have been set up - they are very sly and will try and take money at funny hours! One of mine had a payment go through at 1 a.m. in the morning! However, if you open a new account then your money will be safe. Just remember that when setting up a payment plan do not give them your new bank account details, tell them you will pay via standing order or to send you a payment book.

As for your credit score I'm afraid that this will show on your file for 6 years, however, it will also show that you have been making payments.

Not sure about your other questions - sorry, but I'm sure someone will be along soon with some more info. However, if you really want to self administer your DMP then please have a word with one of the free debt advisories - CCCS; Payplan and National Debtline as I am sure that they will have answers to most of your questions.

Good Luck! Let us know how you get on x

Super_Ram

Cheers for the replies.

I know this is not an ideal solution but the other alternative was to keep going until I cannot pay any of them anything which is no good to anyone.

So far I have changed my wages to another bank
I have cancelled all DD from my original account
I have setup my bills on another account
There will be no money in original account so not going to cancel debit card

Next step is to ring bank and advise I do not want any DD setup from these companies

I need now to contact these companies and advise of my situation and to see if can come to some sort of arrangement

mrs_skint

Good Luck SuperRam. Let us know how you get on. I still have to set up payment plans, have written all the letters but haven't spoken to them yet! (kinda scared to tbh). Still, what can they do eh? They can't get what I haven't got up front, but like you I'm willing to set up a payment plan. Let me know if they freeze the interest for you and I will post on here what happens as well.

saltnvinegar

Super_Ram wrote: »

Hi All,
Now there are a few questions I have which I am unsure of which are:

1. What rights do the paydays have in terms of what action to take. I mean is there next step to pass to a debt management team which I am not too fussed about as can setup monthly payments with the fine.

2. What sort of effect will it hav on my credit rating which is bad anyway but just wanted to know?

3. If I ask my bank not to set any direct debits on my account from requests by these companies am I covered from any unauthorised charges if the companies do this and try and take the money and the bank dont stop it?

4. Also is there anything else I should be worried about apart from harrasment form these companies which I can handle

5. Most imporatantly what happens with interest in terms of will they still charge me the same interest every month i dont pay or should it freeze?

Thanks for any help or advice

Hi Super_Ram

First of all a big well done for dealing with your payday loans and your debt.

:T

From my own experience I'll try to answer your questions above:

1) They have no more rights than any other creditor and what further actions they take will depend on company to company. Some may pass your account to a collections department, others will sell your debt to a DCA, some will do nothing, and others may take you to court. It depends entirely on the company and their own policies. Wonga as an example claim to freeze interest after 3 days after defaulting and you can then set up a payment plan (According to their t&c's that is. In reality it is a little more difficult than this!).

2) Credit rating is interesting and gives an insight into how legit the credit agreements of these companies are. I had no credit searches on the two main credit reference agencies (Experian and Equifax) when I took out these loans nor do I have any adverse credit marks from these companies after I have defaulted on them. I understand they use some smaller CRA's so there may be a record with them but the big ones nothing. They still could make an adverse mark on your credit file though.

3) This is where some of the trouble starts. PDL companies are notorious for re-setting up DD's that have been cancelled and banks generally wash their hands. The other problem is that you are likely to have given them your debit card details which allows them a continous payment authority to take what they like when they like from this card. You may want to read a thread I started on this here which gives you more info on this topic:

Dealing with Payday Loan Companies

4) In my experience no. Other than the fact that the threats and the BS were worse than 'normal' creditors - threats of reporting me to the police, doorstep visits, making my bankrupt (which they could not as the debts were all under the minimum amount required) etc.

5) Again depends on the policy of the company. However I had 4 payday loans and none of them continued to change interest or apply charges after I defaulted.

Good luck and let us know how you get on!

SnV

Super_Ram

Ok I have sent three of the lenders an email stating my financial difficulty to see what they say.

I have only had one reply form Pounds Till Payday but it was to say they have forwarded on my email to the collections department. It states this department cannot contact me by email and I should phone them. Should I ring them or wait a day or 2 to see what happens.

saltnvinegar

Super_Ram wrote: »

It states this department cannot contact me by email and I should phone them.

Complete Horse Manure they can if you inform them that email is an acceptable method of contact and you provide them with an email address. Alternatively they can write to you via post.

They want you to call them for the following reasons:

1) They can browbeat/bully/harrass you

2) They can say things on the phone they would not dare put in writing.

3) Sending letters costs them money

You can write to them and inform them that to ensure there are no misunderstandings you want all communication in writing and that refusal to agree to your request is unreasonable.

If you want to turn the screw also inform them that unless they write to you no further communication will be entered into.

Calling creditors does work for some people, but in the main it is a futile, upsetting and achieves nothing.

Best

SnV

Super_Ram

Nice one,

I will send another email to them stating the above and see where i go form here

My only worrying thing is by sending these emails before the payments are due have i made a mistake and given them a heads up of what I am about to do come payday dates

saltnvinegar

Super_Ram wrote: »

Nice one,
My only worrying thing is by sending these emails before the payments are due have i made a mistake and given them a heads up of what I am about to do come payday dates

Personally I don't think so. My arguement for this would be that I was being responsible by informing them I would not be able to make repayments in sufficient time to make an arrangement.

You will find though that many creditors will not play ball though until you actually default (simply because until this point you have not actually breached the agreement).

SnV