help please with loan interest

brit-dub

Hello all

We started tackling our debts some 12 months ago, and with the help of people on this forum and armed with a income and expenditure sheet we have managed to secure reduced payments and interest frozen, although that’s what we were told.

We have 2 loans and an overdraft with Lloyds TSB which over the phone we agreed a reduced payment and frozen interest, after 12 months we have not missed a payment, then last week I asked for a statement on these accounts, the overdraft was fine and is slowly being reduced, but it was a horror to find that on both loans of which of we have been paying £50 a month, they have been charging us £65 a month in interest on each loan, so now after 12 months we owe more than when we started !!!!


We have tried phoning but can’t get to speak to anyone that can help, all they now say is that they are trying to sell our debt to an agency.


We would really appreciate any help from you guys, we may be wrong but we thought that interest could not be added to a loan once it had been taken out, as interest had been added at the beginning.


We know we need to write to them but we are not sure of what to put in the letter.


we did try some time ago to reclaim bank charges from them but it never went through due to the court’s ruling in the banks favour, does anyone think it is worth us trying again now we have proof of reduced income which has caused us a major struggle.


Regards


the brits

bottleofred

Hi brit-dub,

Do you have a dmp with payplan or the cccs as they normally write to creditors asking them to freeze interest etc at the very start? However, creditors are under no obligation to freeze interest (although not sure how it works with a loan) and some do keep adding it on, even though it isn't helping. I would write to them and ask if they will freeze it, otherwise you will never clear the debt. Some people may also recommend you including a list of people you owe money to and the monthly incomings and outcomings etc, but I don't like to give these people too much information and would advise you to send a letter first asking for the interest to be stopped.

Good luck and I hope they see sense

Red

brit-dub

Hello Red
Thank you for your prompt reply, after I had to take a pay cut to keep my job it was clear from the beginning we could no longer pay all our debts, so we sent all our debtors an income and expenditure form and made them an offer on a monthly basis, all our debtors excepted this (egg Lombard ect) and although it’s been a big struggle we have meet all the payments and in turn they have all frozen the interest , apart from Lloyds TSB as we have now found out.

I think we need to address this situation asap as there interest alone has put us into even more debt, not to mention a severer demand to our 25 year marriage, sleepless nights ect ect

Maybe we need to look at a IVA and put it into a professionals hands, any thoughts ?

bottleofred

Hi brit,

As well as writing to them, I really think you should contact the consumer credit counselling service and see what they think. They have a website and a debt management plan set up through them is free, so all of your money goes toward the debts. I certainly wouldn't recommend an IVA as I don't think there are any free options of this and people just make money out of you trying to clear the debt. Always use a free debt service and don't ever pay for it as there is always free help and advice available.

Red

brit-dub

Ok red thank you once again, I’ve just been on cccs website and we are now waiting for a reply to their survey.

Its apparent to us now that we can’t tackle this debt problem on our own, Lloyds TSB had assured us that the interest would be frozen, and have really pulled the rug from under us.

barbiedoll

Unfortunately, Lloyds are notorious for not freezing interest for debtors who are having financial difficulties, they would rather see you sink deeper into the mire than recognise that you are trying to tackle your problem. :mad:

The "good" news is that they are trying to sell your debt on to a debt collection agency. The bad news is that if they do, you will then be bombarded with so-called "scary" letters that will threaten you with court action and so on. You will also get plenty of phone calls, so remember the golden rule and DO NOT speak to any debt collectors on the phone. They can be rude, threatening, intimidating and generally unhelpful. If you're feeling jittery about your situation, you don't need some goon telling you that you should sell your house/car/children in order to pay them. You may end up agreeing to a payment plan just to get them off your back and what ever you do agree to, they will just keep hassling you for more.

On the other hand, DCA's are usually more open to freezing interest and charges and you can normally get them to agree to a repayment plan that you can afford. Also, they buy these debts for a lower sum than they are actually worth so you can often negotiate low "Full and Final" settlements with them. But that is a little way down the line yet, we can help you with that stuff later on.

Contacting CCCS was a good move. They will be able to send you letters to send to your creditors to state that your income has fallen and that you are willing to carry on paying your debts albeit at a reduced rate. They basically act as a go-between and creditors usually abide by their instructions. When you get hassle from DCA's or banks etc, do come back on here and let us know. There are procedures that they have to follow, and knowing your legal rights can be a godsend when you are being besieged by post/phone. We can show you letters to send to get them off your back, you can legally stop them from phoning you, visiting you and from contacting you at all unless it is by post. You will get a lot of support from both CCCS and the lovely DFW's so please don't let this ruin your relationship and your family life. It is only money, they cannot have what you haven't got so stop stressing out too much, take a deep breath and relax a little. This won't go away BUT it can be managed. Many of us on here (myself included) have been in the same situation and we can sympathise. It's really not worth losing your marriage or your sanity over!