Help! Outstanding overdraft (Legal action imminent)

Skrillex

Hi guys. This is my first time posting here so I am not really sure if you can help me or not, it would be greatly appreciated if you could however, as I am in quite the panic.

OK, so here's my situation:

In January of last year I opened a student account with HSBC in Liverpool when I was a student there to take advantage of a £1000 overdraft facility to help me pay fee's and help with living costs. However I already had a student account with Ulster Bank in Northern Ireland where I was born. I didn't particularly want to get another overdraft but I knew this was my only option.

So I withdrew the £1000 overdraft and used all of it to pay for outstanding rent etc. I then moved back to Ireland after I graduated, but I haven't been able to get a job to pay this overdraft back.
I didn't hear from HSBC for well over a year and then out of the blue I recieved a 'Final Warning' letter through the post around two months ago. Upon reading this letter I telephoned HSBC and told them that I would like to pay the money back of course but I was not financially capable of doing so at present. The guy on the phone was very rude and tried to bully me into making an 'Immediate repayment', which I did not fall for. I proceeded to tell him that I was on job-seekers allowance and I would need time to pay it back or wait until I get a job, of which he told me I had exactly 28 days to repay the £1000 in full.

So now I have received 'Urgent communication' letters from a debt collection agency called 'Metropolitan Collection Services Limited'.
It tells me that I if I do not contact them (which I will tomorrow) they intend to instruct solicitors to apply a 'Warrant of Execution', which allows them to take items from my house to pay off the debt which is very worrying.

I am from a low income background and paying this £1000 is out of the question at present, so what should I do? Can anyone tell me what rights I have and how I should deal with this?

Please shed some light on this for me.

jonesMUFCforever

Go to Debt free wanabe board and contact CAB.

Nobody can legally gain access to your property to take item away without a court order.
They are scaremongering and in this case it appears to have worked!

Consumerist

Whatever happens don't let them into your property without a court order. I understand that, once you have allowed them entry, they can re-enter even if by forced entry.

Skrillex

Ok thanks for the info, I shall ring CAB tomorrow. I do not own the house so I believe it is not possible for them to enter anyway.

Is it true that I can set up a 'minimum repayment' scheme and pay it off weekly/monthly?

jonesMUFCforever

Skrillex wrote: »

Ok thanks for the info, I shall ring CAB tomorrow. I do not own the house so I believe it is not possible for them to enter anyway.

Is it true that I can set up a 'minimum repayment' scheme and pay it off weekly/monthly?

It would be better if you could agree a way forward with repayments.
If it did go to court and you could prove financial difficulties you could be made to pay £1 per month!
The downside if it gets this far is that you will have a CCJ against you and a trashed credit record for next 6 years - meaning you would find it very difficult to get any kind of new credit in future eg mobile phone contracts, catalogues etc as well as loans and credit cards.

Consumerist

Skrillex wrote: »

So now I have received 'Urgent communication' letters from a debt collection agency called 'Metropolitan Collection Services Limited'. It tells me that I if I do not contact them (which I will tomorrow) they intend to instruct solicitors to apply a 'Warrant of Execution', which allows them to take items from my house to pay off the debt which is very worrying.

Do not discuss your debt over the telephone. You need time to consider your position (and it could be alleged that you agreed to something which you had not). If you must telephone them, it should be simply to advise them that they should contact you only by letter. Both parties will then have a record of anything discussed. Don't enter into any further discussion by telephone because they are likely to try to bamboozle or, worse, threaten/intimidate you.

This and much more advice can be found in the Debt-free Wannabe forum as recommended above. Know your rights before entering into written discussion.

Edit
Even if you accept your liablity and intend to settle, do not admit liability to debt collectors at this stage; it may weaken your negotiating position later.

Good luck.

Skrillex

Thanks for all your great advice guys!

I rang them today I told them I only wanted to communicate via letter. They tried desperately to get me to agree to a monthly re-payment scheme which was out of the question considering my financial situation.

However they did offer a £10 per month plan, but after 3 months they said they would "review" the case and ask for more money, which I was suspicious of so I didn't agree to anything. Do you think I should take this or hold out for a better more concrete offer?

I contacted the CAB, they told me that there was no bailiff's in Ireland so taking items from my house was out of the question and that if I explained the situation to the debt collectors it wouldn't be worth their time taking me to court as I couldn't pay it anyway. They also told me to write a letter using their template, explaining that I am on job-seekers at present and that I wished to set up a reasonable repayment plan, which they may actually accept.

So I am going to write a letter today asking for a reasonable payment plan, hopefully this gets them off my back.

Consumerist

Don't be too hasty. There are a number of hoops you can introduce to slow things down while you get to know your rights.

Firstly, they should prove that you owe a debt and to whom that debt is/was owed. Secondly, they must prove that they have the right to pursue you for the debt; they must give you a copy of any letter of assignment of the debt from the original creditor to them. This is important to you because you run the risk of coming to an agreement with the wrong company and you may be pursued again for the same debt by another company at a later date. Has the debt, for example, been sold to them or do they act for the original creditor?

You would be wise to get to know your rights before going further. Visit the Debt-free Wannabe forum where you will find many people who have had the same problems with debt collectors and now know how to successfully deal with them.

If you give them a hard enough time they will often well give up the chase.

Edit
As a final thought - JSA is designed to maitain you at a subsistance level only. You cannot really afford to pay them anything at all, at the moment, even if they can prove that you are liable for the debt and that they have the right to pursue you for it.

chanz4

£10 for 3 months will give breathing space, and stop them selling or even passing to a debt collection agency. 'Metropolitan Collection Services Limited' is their in house

Skrillex

chanz4 wrote: »

£10 for 3 months will give breathing space, and stop them selling or even passing to a debt collection agency. 'Metropolitan Collection Services Limited' is their in house

Does this mean that It has not been actually passed onto a real debt collection agency, what does this mean? I have no idea if the debt has been sold to another agency, on the Metropolitan Collection Services letter is states, 'Metropolitan Collection Services is a member of the HSBC Group and operates internal complaints handling procedure.'

So today I received a 'Final Demand' letter and that a £143.00 fee for legal costs will be added to the bill... am I too late to negotiate? Should I agree to the £10 a month or should I hold out for a possible court case, I don't know what to do.

Considering that this has happened and I have missed payments on other things in the past I suspect my credit rating is abysmal anyway and that I have nothing to loose by holding out for a possible CCJ, would I be right?

Consumerist

It would seem from your letter that MCS Ltd is acting for HSBC internally; the debt has not been sold but passed to their recovery department. Selling it on is likely to be their next move.

I suggest that you draw up a statement of income and expenditure to send to them so you can demonstrate that you cannot afford to pay them anything at the moment; if your are on JSA then this is likely to be the case. You can download a self help pack from National Debtline to guide you through the process. Don't make any offer at this stage - you may regret it later.

For the time being, write to the address on their letter explaining that you are preparing the statement and will send it to them as soon as possible. By doing this you are demonstrating that you are not ignoring the debt.

Don't worry too much about the solicitors bills which you probably won't be paying anyway. This is all par for the course.