I want to lower the amount I pay to 1st credit

Gnubie

Hi all,
Several years ago I got into debt via an unauthorised overdraft of just over 5k with a large well known high street bank,following this my a/c was passed onto 1st credit.
For a couple of years I paid 1st credit a small amount via Standing Order then I got several phone calls off them requesting I increase the payments, and also change the SO to Direct Debit as their claim was that the computer had registered 4 late payments and they were about to start legal action,changing the method to DD was apprently the only way to stop this.
After much tears my end I agreed to increase the payment by £10,but still kept it under £50, despite their wanting to increase it to almost £100 pcm.
For the last few years I have kept to the payments as agreed and all I have heard from them is many phone calls and texts asking me to contact them in various guises,and many many more letters offering me discounts etc etc for quick payment,some even up to 50% off if I cleared it!
I'm not in a position to take up any of their offers,I'm a lone parent,and last week I got made redundant (I had been there just under a year so I don't have any financial entitlements).
So...finally the question I want to know is what can/will they do if I cancel the DD as it is and drop the payments to a realistic affordable £10 a month? The amount outstanding is still over 4k.
As things stand,whilst I agree I owe the money,I cannot make the current payments as they are and I'm all too aware of how unreasonable 1st credit can be.
My biggest fear is that I'll be be taken for bankruptcy or similar.
By the way I rent a local authority house,and have just been bought a suprise new car from my parent,and Im terrifed they will latch onto that as it was registered in my name!
Thankyou in advance.

Tixy

Hi and welcome

I would cancel the DD and then write to them and explain you have been made redundant and so can only afford £5 until your circumstances change. And then set up the standing order to that effect.

You might well find that they will accept it - if they try to hassle you into paying more just be firm with them, you can't afford it, benefits are not designed to be repaying debts.

Its unlikely but possible that they might take legal action - but if they did this would be to try to obtain a CCJ. If they do this you would simply have to reply to ask the judge to allow you to pay in affordable installments - which as your are on benefits currently - would be set very low, at a rate you can afford. Your car would be safe providing you kept up with the CCJ payments ordered by the judge.

Gnubie

Hi Tixy,
Thanks for the reply. Should I send them a Postal Order/Cheque with letter to cover the next payment?
Have you any idea about how I would set up the standing order,as I have read on here that they have ignored requests to proivde details other people?
Also,would I be best to send it recorded delivery?
Thankyou again.

FredWhispers

I would telephone them. Simply cancelling an agreed re-payment send the wrong message.

Just tell them the facts. Lost job, need to drop repayments, happy for them to call from time to time to check situation, you will call if you get a job etc.

I dealt with this company a while back, they were actually quite polite and helpful.

Fred

Gnubie

I've spoke to them previously on the phone and I ended up in tears as they try and pressure me into paying more than I have coming in . I know what you're saying as the written word isn't neccessarily read the way that you intended it,but I've read such horror stories on here about them and everyone else says only deal with them in writing - I feel bad enough that I can't pay it as it is

fermi

Do as Tixy says. No need to phone these people.

- Cancel the DD.
- Write explaining what has happened.
- Make your new offer.
- Include the first payment if that is what you want to do.
- Ask for bank details that will allow you to set up a standing order. If they refuse this, then tough on them. You have tried.
- Send all by recorded delivery.

Also keep an eye on your direct debit. Make sure that you keep a record of you cancelling it with the bank. Debt collectors will sometimes re-instate them and take more payments without your permission.

Gnubie

Thankyou Fermi,
I am going to write to them.
That's scary to know that they can re-instate them and take more payments without my permission. Is there no sort of block that the bank can put on the company to stop this if you've already cancelled it?

fermi

It doesn't happen very often, but it has happened to some people in the past, so just keep an eye on it.

Not a huge worry, but just be aware.

As long as you have proof that you cancelled the original DD, then the banks direct debit guarantee protects you. Should further payments be taken, then you would be entitled to them back.

Gnubie

Ok,will do,thankyou

Gnubie

Just an update,I've just rang the bank and cancelled the Direct Debit and asked about the DCA being able to re-instate it......The reply was a definite 'yes' they can because I owe them money!
Is there anything I can do to prevent this?
Obviously I will be writing to 1st credit to explain why I've cancelled it,but now I'm deeply concerned that if they do this and I'm not expecting it I am then going to be getting big charges from the bank!

fermi

Gnubie wrote: »

Just an update,I've just rang the bank and cancelled the Direct Debit and asked about the DCA being able to re-instate it......The reply was a definite 'yes' they can because I owe them money!

lol. The bank employee you spoke to is talking out of their bum.

What a load of nonsense. :eek:

See the info here from the Financial Ombudsman.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm

banking case studies – direct debit guarantee

27/1
bank pays out under direct debit that customer had cancelled

Mrs B enrolled her son at a fee-paying school and signed a direct debit form, authorising the school to claim the school fees direct from her current account. But Mrs B removed her son from the school only a few weeks after he had started there.

She cancelled the direct debit and made separate arrangements to pay the school what she considered to be due. However, this was less than the school thought it was owed. A couple of months later, the school claimed an extra term’s fees under the direct debit, because it said that Mrs B had been required to give a term’s notice. When Mrs B’s bank paid the sum requested, even though she had cancelled the direct debit, Mrs B complained and asked the bank to pay the money back.

The bank argued that she was not entitled to have her money back. It said she had not suffered a loss as a result of its making the payment because she owed the school the money in any event.

complaint upheld

It was irrelevant whether Mrs B owed money to the school. What was relevant was that her bank had paid out under a direct debit that she had cancelled.

So, under the direct debit guarantee, once Mrs B notified the bank of its error, it should have refunded the money straight away. It wasn’t for the bank to decide whether or not Mrs B owed the money to the school.