Wonga (now passed to Gothia) Pay Day Loan Debt

lap1970

Hi - just looking to see if anyone has advice regarding a payday loan from over a year ago that has been passed to Gothia from Wonga. I had been reading that you should ask for the debt to be reduced to the original amount advanced plus one month's interest. Wonga had added £1344 of interest and charges to the original amount that was due (I had extended it twice). I wasn't able to pay at the time due to paying for a funeral and my daughter being admitted to hospital then followed by me going off on maternity leave. I have contacted Gothia who sent me the following in an email:

Date Description Reference User Cr Dr Balance

07/12/2010Interest Broken Arrangement Interest£200.89 3135.67
19/11/2010InterestBroken Arrangement Interest£518.81 2934.78
27/10/2010Interest Monthly Interest £546.12 2415.97
27/09/2010Interest Monthly Interest £53.50 1869.85
25/09/2010DefaultFeeEvent Generated Trans £17.50 1816.35
25/09/2010DefaultFeeEvent Generated Trans £7.50 1798.85
24/09/2010Interest Monthly Interest £419.46 1791.35
25/08/2010Interest Post Accrued on Ext £327.74 1371.89
25/08/2010Payment Date ChgeEvent Gen Trans£10.00 1044.15
25/08/2010Card repaymentAuthorised Online +£152.62 1034.15
28/07/2010Default Fee correction £10.00 1186.77
28/07/2010 Payment Date Charge £10.00 1196.77
28/07/2010 Interest Post Accrued on Ext £378.17 1186.77
28/07/2010 Payment Date Charge £10.00 808.60
28/07/2010 Card repayment Authorised Online +£296.90 798.60
23/06/2010Transfer fee CHAPS £5.50 1095.50
23/06/2010 Loan advanceInitial Advance £1,090.00 1090.00

So an original loan of £1090 in June became £3135 by December. I had been in email contact with Wonga before it was passed to Gothia but no repayment plan had been agreed as I had said I would not give them my new debit card number (I cancelled the old one and they couldn't take money out of it) and asked for bank account and sort code to do it through digital banking, but they never got back to me.

Gothia have offered to reduce the amount payable to £2276.76 but only if I pay it in 90 days (pretty much impossible as we are a family of 7 members with only one full time income coming in). Has anyone else had dealings with Wonga and Gothia before? Each are saying to me either - sorry the debt has been passed to Gothia therefore we can't do anything or sorry we bought the debt from Wonga for £3135 and can't remove any interest charges and fees.

Thanks.

MoneyMagic01273

lap1970 wrote: »

Gothia have offered to reduce the amount payable to £2276.76 but only if I pay it in 90 days

..... Each are saying to me either - sorry the debt has been passed to Gothia therefore we can't do anything or sorry we bought the debt from Wonga for £3135 and can't remove any interest charges and fees.

Seems a bit contradictory - far from saying they can't reduce anything, they are apparently offering you a greatly reduced settlement figure - albeit conditional.

Also, one thing sticks out in my mind as odd. You took out a payday loan originally for £1000 which I assume needed to be paid back in 1 month - which you accepted OK. So how come paying just over £2000 wouldn't be possible in 3 months?

lap1970

The original loan was June 2010 - financial situation now completely changed, so impossible to pay £700 per month for 3 months without not paying a priority debt and/or not eating for the next three months. If it was just me, I could do it, but there is 7 of us living off one wage now so impossible.

MusicalLawyer

My Wonga debt got passed on to Gothia Ltd - they were able to offer me to pay £25pm. Reviewed every 6 months.

My debt was only £550 in total though.

timbstoke

This is one of those situations where I have to admit I'd hold firm and tell them that unless they're prepared to significantly reduce the interest charged on the account so far to a managable level (I'd suggest to them a total of around £1500 - still very high interest but more managable), then I won't be making any further payments and will instead be waiting until they get a CCJ so I can make my case in court, where I will be asking for all charges and interest to be removed from the amount owing.

That's not necessarily what the court would award, but I suspect they'd knock a sizeable chunk of the interest and fees off, and Gothia know this too.

Shovel_Lad

timbstoke wrote: »

This is one of those situations where I have to admit I'd hold firm and tell them that unless they're prepared to significantly reduce the interest charged on the account so far to a managable level (I'd suggest to them a total of around £1500 - still very high interest but more managable), then I won't be making any further payments and will instead be waiting until they get a CCJ so I can make my case in court, where I will be asking for all charges and interest to be removed from the amount owing.

That's not necessarily what the court would award, but I suspect they'd knock a sizeable chunk of the interest and fees off, and Gothia know this too.

Surely the problem with taking this approach is that the DCA isn't charging any interest. The interest was charged by Wonga who have now sold the (total) debt on to Gothia. If the debt was still with Wonga then maybe you could try it, but Gothia bought the total amount owed (£3135) and won't care about the actual makeup of the debt.

The only bargaining position you have is trying to get Gothia to reduce their profit margin (as the debt was bought at a huge discount) Usually, this involves paying quickly and reducing the amount of work the DCA does, or convincing them that it is either £xxx or nothing.

MusicalLawyer

Gothia wouldn't add any charges on to the account - so the figure they have is from Wonga and is all Wonga's charges.

It depends if Gothia bought the debt, or are just acting on behalf of Wonga. As there's a difference.
Gothia won't accept a settlement of less than 75% on my current debt, but on a previous one, they settled for 50%. The amounts were pretty similar though. So whether they will accept less will just depend on the persons mood at that time I presume haha.

Also can I just add, OP, that even though you cancelled your bank card in the first instance, Wonga still could have taken money from your bank account. As well as any other account you hold with the same bank, including joint accounts.

timbstoke

Shovel_Lad wrote: »

Surely the problem with taking this approach is that the DCA isn't charging any interest. The interest was charged by Wonga who have now sold the (total) debt on to Gothia. If the debt was still with Wonga then maybe you could try it, but Gothia bought the total amount owed (£3135) and won't care about the actual makeup of the debt.

That's true, but that really isn't the OP's problem. If Wonga took the OP to court themselves, and they turned up saying that the interest has increased the debt to an unaffordable amount, there's a good chance the court would write off a sizable chunk of that interest. That situation doesn't change just because they sold the debt on - if it goes to court, the OP is still just as entitled to turn up and ask that most of the interest be written off to allow them to afford the debt.

The real point is, the DCA know this, so if you stand your ground, they'll probably offer a more reasonable settlement figure before it gets that far - remember, they haven't paid anything like £3000 for the debt. With that in mind, if you take this route, it's a good idea to still put aside whatever you can afford, since a lot of the time, settlement figures will only be on offer for a limited time, so you want to be able to pay it off as soon as you're happy with it.

timbstoke

KellyKing1987 wrote: »

Also can I just add, OP, that even though you cancelled your bank card in the first instance, Wonga still could have taken money from your bank account. As well as any other account you hold with the same bank, including joint accounts.

No they couldn't. This myth seems to crop up a lot in these parts. Yes, banks can take money from any account you have in order to pay debts, but they generally will only do this for their own debts - i.e. if you have a mortgage that falls into arrears, and a savings account at the same bank, they'll happily dip into your savings account to cover the mortgage. They won't, however, do this for just anybody - they'd just refuse the charge (and probably charge the account holder for the privilege).

The only way the situation you describe would occur is if the bank allowed the transaction to go through, taking the account overdrawn - the overdraft would then be a debt to the bank, which they could take from another account (but even then, they're unlikely to do so unless it becomes apparent that you're making no effort to clear the debt yourself)

give_them_FA

Unfortunately, you have made the mistake of talking to a debt collection agency. If you totally blank them, they go away.

If you respond, they milk it for all it is worth. I would just ignore them from here on in, if they want to take it to County Court (unlikely, but had you ignored them they wouldn't even have thought about it) the Judge is likely to squash a high proportion of their Shylock-esque charges and give you a very long time to pay.

Worth it in my view, call their bluff. Or offer them £10 a month, take it or leave it, and stick to it. But don't knock yourself and your family out to enrich these leeching parasites.