Min monthly payments to debt collectors on benefits

FusionFury

Hi,

How much will debt collectors normally accept as a minimum payment a month? I'm on benefits IS and disability (which isn't means-tested I believe)

Is it really £1 a month? or is that just a myth?

Tixy

A lot of debt collectors may decide to accept £1 a month when people are on benefits, if they believe you cannot afford anymore. They don't have to legally and could take further action (ie court).

The DCA may ask for an income & expenditure statement or proof of benefits - you don't legally have to provide this info to them. That said if they think you could afford more and you won't supply the info then that might increase the chance they would consider further action.

FusionFury

Tixy wrote: »

A lot of debt collectors may decide to accept £1 a month when people are on benefits, if they believe you cannot afford anymore. They don't have to legally and could take further action (ie court).

The DCA may ask for an income & expenditure statement or proof of benefits - you don't legally have to provide this info to them. That said if they think you could afford more and you won't supply the info then that might increase the chance they would consider further action.

Thanks

What do I say when I rang up?

Would it be possible to reduce some of my debts to £1 a month now or because I already pay more they won't accept less? it's the fact they told me "this is the minimum we will accept" which scared me in to paying that did I need to be more forceful and not give in to their bullying tactics? what if it went to court?

Advise please

Tixy

I wouldn't ring them up ever.

I would write to them, explain you are on benefits and cannot afford your current repayments and that you will only be able to pay £1 (or whatever) a month. And then set up a standing order to pay them that.

Usually if it went to court you would (presumably) complete the court paperwork to ask to pay in installments and provide all info on your finances to the judge so they can work out how much you can afford per month - and would then order you to pay that.
Occasionally a judge might decide to order a forthwith judgement - thats where you are supposed to pay the full amount straight away, this tends to be if the judge can see a debtor has assets (such as a property) and can see that the debtor can only afford say £1 a month on a debt of £8k and so are never going to pay it off at that rate.

Tixy

Suggested template below from national debtline that you might want to use or adapt for yourself

1 High Street,
Newtown,
Kent
R21 4RH

August 3, 2011

The Loan Company
Company House,
Church Street,
Newtown,
Kent,
R1 7HG

Dear Sir/Madam

Re Account No/Reference No:- xxxxxxxxxxxxxxxx

Since making that above agreement with you, our circumstances have changed. We cannot now afford to agreed monthly payments because ... [your paragraph added here]

We enclose a Personal Budget sheet which shows our total income from all sources, and the total outgoings of our household. As you can see we have no money left to make offers of payment to my creditors.

In view of our circumstances, would you please accept [a token offer of £1.00 per month] to be reviewed in six months. If interest or other charges are being added to the account, we would be grateful if you would freeze these so our debt does not increase.

Should my circumstances improve we will contact you again.

We would be grateful if you would send a [paying-in book] [standing order form] to make it easier to pay you.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

FusionFury

Tixy wrote: »

I wouldn't ring them up ever.

I would write to them, explain you are on benefits and cannot afford your current repayments and that you will only be able to pay £1 (or whatever) a month. And then set up a standing order to pay them that.

Usually if it went to court you would (presumably) complete the court paperwork to ask to pay in installments and provide all info on your finances to the judge so they can work out how much you can afford per month - and would then order you to pay that.
Occasionally a judge might decide to order a forthwith judgement - thats where you are supposed to pay the full amount straight away, this tends to be if the judge can see a debtor has assets (such as a property) and can see that the debtor can only afford say £1 a month on a debt of £8k and so are never going to pay it off at that rate.

Would a e-mail suffice? I'm not good at writing letters my hand-writing is very poor!

So if your on alot of money on benefits the judge can order you to pay more even though benefits are to live on and not for debts?