Help needed - Churchwood, Experian + more!

cheesychips123

What a mess.
My daughter and her boyfriend started to struggle with various debts (lots of really small debts) when they had a baby and turned to Church Financial in September 2009 which seemed a sensible thing to do until I realised she was paying them £38 a month :mad:

She contacted Churchwood to cancel the arrangement in November last year as Churchwood were not even making the payments to the various companies they agreed to pay, they are refusing to send a statement outlining who they have paid and when and they are refusing to send back all the relevent debt letters that were forwarded to them initially. Really helpful. Needless to say, the direct debit to them has been cancelled.

We have written to all of her creditors explaining the situation and asking for the date of the last payment received so that we have a clearer picture of what's going on and who is owed what.

In the meantime, I asked my daughter to get a copy of her credit file from Experian - it reads like a horror story. ALL of the debts that were being dealt with by Churchwood are now registered as defaulted - around the dates that Churchwood took over the payments - I am not sure if this is because she just gave up paying them knowing that Churchwood would sort it it out or because Churchwood didn't pay them quick enough. No CCJ's yet tho thankfully.

So, my questions are:-

Whats the best way to clear up a credit report? There is a note on the credit file to say that defaults are registered for 6 years whether they are paid off or not - which kind of makes paying them off in one go seem a bit pointless? Is there any benefit in getting them paid in full/settled if they remain a score of "8" (for a default) but then marked as satisfied? Or should she set up a more reasonable repayment programme that she can stick to to get the score looking healthier? (Does it work that way?) Help on this MUCH appreciated.

There are numerous errors on the report also (the same entry made in triplicate on 2 different debts making it look like there are 9 debts to the same company when there are actually only 2) - presumably if we point this out to experian they will rectify this?

And thirdly - what to do about Churchwood? They seem to be a law unto themselves! I am compiling a letter demanding a statement of who was paid what and when, I would be very grateful for any tips for the letter. As it stands there are far too many words ending in "off" !!!

Sorry this turned into a long rant. Would I be better off breaking down my rant into smaller, digestible sections to re-post in relevent forum departments?

Thank you in advance

dancingfairy

I can answer a couple of you points but not all sadly.
1) Churchwood should have made her aware that by entering into a dmp (debt management programme) with them that defaults were likely to be registered on her credit file. This is the case whether you'd gone with a free charity/organisation or not -as soon as you stop paying the minimum payment required by the credit card/loan you would be breaking the terms and conditions of taking the credit out and as such they are entiteld to place a default on her credit file - this is even if they have agreed to a reduced payment plan as it is still a default of the original agreement. This is therefore the least of your worried.
I would write a strong letter of complaint to Churchwood and ask them to send a statement and who they've contacted and what they've paid to who and when. If they fail to reply within a decent timeframe I would report them to the authorities - you can try the Office of Fair Trading, Trading Standards and the Financial Ombudsman. The Financial Ombudsman can intervene on your behalf enough and enough people complain. and make them sort themselves out but the other 2 may be interested in Churchwood's behaviour as well - they can be subjected to fines and have their licence removed if their behaviour is serious. You do have to have exhausted Churchwood's complaint procedure first though I believe.
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Tixy

Hi

Paying reduced payments almost always means you will get defaults. This would be the same if she used churchwood or a debt charity to run a DMP - though the charity would have explained this to her whereas churchwood won't have drawn her attention to it.

There is a benefit in getting her defaults paid - it means she no longer owes the money and cannot be taken to court by here creditors. Aside from that settled defaults on a credit file are a little better than unsatisfied defaults. Nothing much will improve her score though until they are settled. But on entering the DMP she would have agreed not to take any more credit on anyway for the duration of the DMP.

I would send a subject access request to Churchwood under the data protection act - yes it costs £10 that you shouldn't really have to pay but I think its your best chance of getting copies of everything.

I know its a stupid point but did she actually write to churchwood to cancel? usually under the T&C it has to be written notice and if she doesn't do it they'll probably keep trying to charge her monthly fees.

She might then want to contact a debt charity for some propery impartial advice and to decide whether to do a DMP through them. https://forums.moneysavingexpert.com/discussion/2077631

dancingfairy

Whether to pay off the debts to improve her credit score seems a little mad in my opinion - she needs to get advice on how to manage her debts -if a dmp is an option then she will still be defaulting on the original agreements so I'm not sure paying off the defaults will be of any use. Obviously if all she needs to do is perhaps claim benefits she is entiteld to and just manage her money better then perhaps there is a benefit in settling the defaults ( I dont' know enough about this but from what Tixy said it would perhaps make sense). I guess it depends on what the best solution is for her regarding the debts.
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cheesychips123

Thank you - both of you. The reason I was asking about settling the debts was because her boyfriends mum and I were going to help pay the debts off (if it was a quick way to repair the credit report) and sort out a more manageable repayment scheme to us. They were thinking about buying a house together in a couple of years - and of course there is no way on earth with that credit score they are ever going to get a mortgage anytime soon. Most of these debts are really small, but I guess a default is a default - no matter what the amount?

bargainbetty

Hi Cheesychips,

I may be being a bit harsh here, but they are many of us who have accepted or offered help for financial problems. If you and the BF's mum pay off the debts and let them have a small repayment each month, they are not going to learn how to handle their money properly. Sorry, I've consolidated loans twice so far, and its taken me 10 years to get straight. Unless you can absolutely guarantee that all the creditors will remove them now, you are throwing cash at a problem that money is only half the solution too.

Give them help and support sorting out their finances and running their household as cost-effectively as possible, but don't bail them out - you'll end up doing it again. If the debts are small, let them clear each one off, and then ask for the default to be removed as they go.

Good luck x

cheesychips123

If they had just done nothing about it, buried their heads in the sand, I would definitely be more inclined to be harsher. But as it stands, they turned to a company that thought they would help them - off their own backs in 2009 when they started to struggle after having a baby - and when they realised that company was ripping them off (not making all of the agreed repayments, just before xmas) they cancelled the agreement and came to us for help writing to all the creditors - so I think to be fair, they are dealing with this quite responsibly so far. They have admitted that they bit off far more than they could chew - and when baby came along it crippled them. They SEEM to have learned their lesson, so I am prepared to help them any way I can, repaying the debts isn't the only option on the table at this stage, but it IS an option. They are small amounts of debt, but there are LOTS of them - so their credit files look like an edition of War & Peace!!

Tixy

Basically the damage is already done to her credit file now and even you agreeing to pay off all the debts is still going to leave her with a rubbish credit file for years. For this reason I would consider a DMP with a charity rather than you paying them off. The danger is if one of them loses their income then they won't be able to repay you, whereas if that happens in a DMP they cannot really make the credit file much worse.
Of course its down to you but think about a worse case scenario - could you afford to write off the debt they would owe you?

Hopefully you helping them with budgeting etc will be a great help to them, its a shame she ended up with Churchwood - a lot of people do go for these commercial DMP companies who seem to offer a great solution with no downsides and not everyone knows about the charities that can help. We get a lot of posters in similar situation as these firms can be very convincing.

Hope you manage to get a formal complaint in against them.

cheesychips123

Thank you Tixy - what really pees me off is that Churchwood were the ones to get in touch with THEM (when they were turned down for a loan). Talk about sharks circling the water... That £38 a month over the last 18 months would have gone a long way towards paying some of the debts off!