Arrangement to pay - advice needed!

Nearly_There_2

Hi all,

I'm a new member to MSE so I'll apologise now if I cover any old topics

My first post has to do with an arrangement to pay I have with MBNA.

The account will be paid off this year and I have been paying an amount which exceeds the contractual figure for some time.

I called MBNA last year as I wanted to come off the arrangement to pay as I was in a better financial position. I also wanted this to be reflected on my credit file and have the ap markers fall off. They refused to do this and confirmed I will need to continue to pay the amounts until the account is cleared.

My question is; can they force me to continue to pay these amounts and still repot the ap marker on my credit file?

I want to write to them regarding this matter but wanted to get some advice before doing so.

Thanks in advance

Horseunderwater

Pay it off as soon as you can. Did you get the account frozen, so that you are not getting extra monies added?
When I had similar trouble in 2005/6 - I negotiated a freeze on 3 CC's. Paid £1/month for a while, then I remortgaged. Borrowed a little extra to cover the CC debts, admittedly not best idea, but for me I wanted debts under one roof and for me that worked. When I made an offer to pay, instead of paying whole amount, I told them I had limited funds and could afford 50% of debt as a full settlement and were they prepared to accept that? One did 55% and 2 others did 65% with a note added to my credit files. So I basically paid them back most of the capital borrowed. I now have a good rating back and the notation is gone. Has been 6 years now.

Nearly_There_2

Hi,

Thanks for the response.

I haven't had the accounts frozen so I have been paying interest and well as paying over what would be the contractual amount (probably by £190)

What Iam confused by is, I have been on this agreement to pay for 2years. I have since read this should only be used by the banks as a short term measure. They're also not meant to put borrows in a worse position than if I had been defaulted on the account.

If I pay the account in full this year it will appear on my credit file for 6 years but If they defaulted me it would drop off in 3/4 years.

neverbefore2011

I regret I cannot answer your questions because I am new to the world of Debt Management, and am looking for answers myself!

But your post is very interesting to me because I am currently making pre-arranged token payments to a credit card company, which showed no interest in entering into any long-term arrangement until I am in a formal default situation, which will happen later this year after an unspecified number of token payments.

They did mention the possibility of a formal arrangement, but they also mentioned the possibility of a full and final settlement, as well as the possibility of selling the debt to a third party. They also froze all interest and charges. I think I benefited by contacting them before missing any payments.

But, from the stories which I am reading on this forum, I am coming to the conclusion that once you have veered, however slightly, from the straight and narrow path, there is very little advantage in trying to create any kind of 'good impression'.

As you have found, by avoiding a formal default, you have possibly disadvantaged yourself

Hanky_Panky

To try and help explain:

The length of time and the amount over the normal monthly payment is irrelevant. What really matters is the level of your arrears - on a credit card it is conceivable that the arrears could equal the remaining balance so until cleared you would rermain on an AP.

Also yes they are supposed to be a short term measure however there is no opportunity for re-structure on a credit card so the only other alternative is to call in the whole balance - presumably you are better off paying monthly ?

neverbefore2011

Hanky_Panky wrote: »

presumably you are better off paying monthly ?

I'm not convinced - paying nothing at all seems to be best

Nearly_There_2

Thanks for the posts people.

Currently the account isn't in arrears and has been since about 6 months after my payment problems. Currently the credit limit is roughly 8k and the balance is roughly 4k.

I'm still confused as what part of this arrangement is enforceable? I'd rather be removed from the arrangment to pay so the ap markers fall off and pay off the majority of the account and keep a small balance (hopefully updating my account with positive payment history)

Nearly_There_2

neverbefore2011 wrote: »

I'm not convinced - paying nothing at all seems to be best

It doesn't seem right that someone who makes every effort to pay their debt off is penalised more than someone who makes no effort at all?

neverbefore2011

Nearly_There wrote: »

It doesn't seem right that someone who makes every effort to pay their debt off is penalised more than someone who makes no effort at all?

I'm not sure what 'ap' means

But in your situation I would be tempted to stop all payments and see what happens

happy_bunny_2

I have an AP. As per the OFT guidelines, its supposed to be a short term thing (6 months). I would write them a formal complaint, signed for, stating your concerns and quoting whatever you like from here:
http://www.ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

You should not be put in a worse position than if you defaulted, and an AP stays on the account for 6 years from when settled.

not as bad as a default mind, I have one and can still get phone contracts etc.

neverbefore2011

happy_bunny wrote: »

not as bad as a default mind, I have one and can still get phone contracts etc.

that's the kind of snippet of information that I am looking for, but !!!!!! what does AP stand for?