Forgotten Debt = Debt Collectors HELP

maria_my

Hi,

Three or four years ago when I was pregnant with my first child I was on benefits for a while. I mistakenly forgot to tell them about a minor change in circumstances as there were hundred of forms they were requesting all the time it seemed.

Anyway this resulted in benefits being overpaid. At the time I agreed an arrangement to repay the debt and I think I only ever received one letter which told me about the debt, nothing about the plan or anything.

Anyway I think around that time I was struggling financially and I missed a month and never heard from them and this sort of thing kept happening, until eventually I completely forgot about the debt.

Today I came home to find a debt collectors letter requesting £2500 which I do not have. I'm a full-time student and my husband is on a very low wage, so at the moment we are feeding a family of four at £40 a week and are still using credit more often then not to pay essential bills etc. I.E. We are in financial trouble but at the moment we have reduced everything we can and are just in a bit of a trap. So this, is really making me feel physically sick....

I've looked on the CAB website and it doesn't seem to suggest anything which can really help me.... we are living below the breadline or whatever it is called but can not seem to get anymore income from anywhere either through working or state benefits or anything because I'm a student so we don't qualify...

Anyway, I'm just not sure what to do, I've seen information about Debt Relief Orders and things like that but I just don't like the sound of them....

Can anyone point me into some form of direction.... I'm just feeling so faint at the thought of it and can't even think straight at the moment....

neverbefore2011

maria_my wrote: »

this sort of thing kept happening, until eventually I completely forgot about the debt

what 'sort of thing' would 'keep happening' until it induced amnesia?

give_them_FA

Being a mother... bringing up a baby.... trying to run a family of four whilst doing education... you seem to have forgotten Martin Lewis' post at the top of this forum- "help, not judgement." So amnesia can strike everyone.


Anyway, I am more into "helping", so I would remark that it seems to be getting more common for Government agencies to be sending out debts to debt collectors rather than what they used to do and collect them themselves. Debt collectors may be frightening- they intend to be- but they are only interested if they can make some money for themselves. It's plain from what Maria says that she cannot afford to do anything other than pay off a small amount per week/month.

I would (I know it's not easy if you are nervous) ignore the debt collector. One of two things may happen. Either they will go away if you don't reply (don't count on, but it does happen) or they will pass it back to the Government Department, who may then write to her. In my view it will be easier to negotiate an equitable instalment plan with the Department than any private debt collector.

It may even disappear-who knows? Stranger things have happened. I had two friends who were sent "fines" by DVLA which went to debt collectors, who were ignored, and nothing was ever heard about it again.


Above all, don't worry. If you haven't got it, they can't take it off you.

Angry_Bear

You can also fill in a statement of affairs http://www.makesenseofcards.com/soacalc.html and post it here. People will be able to help advise you on where you can cut back .

give_them_FA

Although provision may be made for possibly having to repay it, it is at this time unclear whether this DCA is acting as an agent for the Government Department on a commission; or, whether the Government Department has written off the overpayment and sold it on. If the latter, it is a very different ball game. Either way my advice would be to sit tight and see which way it develops.

This family are obviously struggling enough as it is without having to pull their belts in even more if there is any way it can be avoided.

neverbefore2011

maria_my wrote: »

I've seen information about Debt Relief Orders and things like that but I just don't like the sound of themQUOTE]

What don't you like about Debt Relief Orders?

maria_my

Hi guys,

Thank you all, I've contacted them tonight and they said the lowest payment plan they can offer me is £100/month. I've paid a payment of this via credit card tonight and stated I would try to keep to that plan, but I really don't know how I'm going to do it...

I'm hoping to contact the council tomorrow and see if there is anything they can do or if they can point me towards some form of help... But I'm not sure what we're going to do, my husband has cancelled one of our insurance policies tonight (which would pay our mortgage if we were to die or become critically ill) and we're going to run a revised budget soa tomorrow as we just seem to be spiralling at the moment....

Once we have done that hopefully things will be a bit more clearer and we can try to find this £100/month, but I'm not sure how much more we can reduce our spending...

Anyway thanks for all the advice I'll let you know if we manage to resolve it or not.

Oh and neverbefore2011, I'm just a bit frightened that a DRO stays on my credit file for 6 years and I'll never get credit, we're in such a nightmare at the moment that we need the option of credit for emergancies as we have no savings or anything to rely on so if a boiler breaks down or anything we are in trouble. We always try not to use credit where possible but in our finacial situation at the moment we do need it there as a back up...

neverbefore2011

maria_my wrote: »

we need the option of credit for emergancies as we have no savings

what you need is 'charity'