need urgent advice

cavalier_dog

we had a loan with a certain company, couldn't pay and are now paying at a reduced rate through a debt company.

However the loan company have been adding charges for admin and as it looks we will never be out of debt to them - ever - because they add more than we pay.. Because we told them we wouldn't pay the charges they have now sold on a £500 debt and we now owe the new company £1280! An increase of over 150%.:mad: Please can someone advise what to do. I want to write to the ombudsman but is this the right thing to do. They also have another small loan and that could spiral also.

Stuart_W

cavalier_dog wrote: »

we had a loan with a certain company, couldn't pay and are now paying at a reduced rate through a debt company.

Here lies the problem. You have been paying a debt management company.

And they clearly haven't been very good at managing the debt for you, if it has been passed to a debt collections agency.

Unfortunately, debt management companies offer golden promises which usually turn into little more than pouring fuel onto flames.

If you had negotiated directly with the company to whom you owed the money, they may have made an agreement. As it was with a thrid party, you may have made an agreement with this third party, but the company you own money to may not have gone along with such an agreement.

Use the sticky on this board for where to go for help - CAB, CCCS etc. Get FREE advice from someone that can actually help, not paid advice that makes it worse.

Tixy

When you say paying at a reduced rate through a debt company - do you mean you are on a DMP? Are you paying other creditors as well? Who is managing your DMP for you? is it one of the charities or a commercial company charging you a fee each month?

Has the debt collection company written to you yet? If they have I would write to them and ask for a full breakdown of the debt - so you can see what you have been charged. Once you have that information if you disagree you'll need to first make a written complaint to them. After they have given your their final response to your written complaint (and they have 8weeks to do so) if you are not happy then you can then make a complaint to the ombudsman - but not before.

cavalier_dog

we are on a DMP through a registered charity but the ocrrespondence from this loan company all comes to us. I have just been on a forum and realise that if the original company has completely sold the debt we are definitety better off than staying with them. They seem to be getting away with murder and the FSA doesn't seem to be able to control them!

I will call the new company tomorrow and ask for a breakdown. I am not going down without a fight.

for 12 months everything was fine until they advised that they were adding a £30 charge for both of us and a £25 "admin" fee for both of us. £110 extra added per year and we only pay £6.71 per month! We will never be out of debt with them so may end up being happy that they sold the debt.

There has been no problem with anyone else. And they don't add charges or anything either.

Thanks for your responses, I will post when I get more details.

bailey12345

The loan will be passed to a debt collection company eventually even when you are paying them back through a DMP, the reason they pass it on is because you haven't stuck to the original contract you signed with them by not maintaining the monthly payment you agreed with them so you have defaulted on the loan. Companies like Link Financial and Welcome Finance do pass the account on but still continue to add the full interest that would have been applied if you were still making the full monthly payment. Say you took the loan out for 5 years and you are 3 years into it they will continue to add the interest for another 2 years- full term of the loan. so the balance will increase. Write to them and ask them to look at lowering the interest or try and pay them enough to cover the monthly interest and a tiny bit more so the balance will decrease slightly, then after the two years anything you pay them will come directly off the balance. Is not fair that they are allowed to do this as it puts people all ready struggling deeper into debt.