Lloyds TSB loan repayment agreement?

Onyor

Hello everyone,

Currently both myself and my partner are unemployed, and whilst he was at University a few years ago, he got a loan in order for us to be able to afford the baby which was on the way.
Due to the amount the loan is, when he became unemployed last september he went on the CCCS website to have a Debt Remedy plan made. From this it concluded that for the foreseeable we could afford to pay LLoyds TSB £27 per month as a repayment for the loan, which Lloyds accepted, and they did warn us that we would get letters about arrears on the account due to not paying the full monthly payment each month.

Well, this morning my partner had a letter from "Moorcroft Debt Recovery limited", stating that due to the length of time his loan account has been in arrears, the account has now been passed on to them, and they will be trying to get a CCJ for the whole amount.

Well as you can imagine, the first thing he did was ring up Lloyds. However, when he did he was told that the account was no longer accessible by them due to it being moved to Moorcroft, and as such any questions or concerns over the account had to be directed to them. He followed this up by ringing Moorcroft, who asked for proof that he has spoken to the CCCS about his financial situation, which he promtply emailed to them.

Our main question is, can Lloyds do this when we had already reached an agreement with them? Also, he is in arrears on his credit card, same situation, has a payment arrangement set up with LLoyds over it, can we expect this exact same issue to happen in the next week or so with his credit card?

Finally, if he is willing to make repayments which we can afford according to the information given to them via the CCCS debt remedy PDF, can they demand any more money?

Edit: The first thing the CCCS recommended for my partner was a Debt Relief Order, but as we thought his unemployment may not last as long as it has, we decided a repayment agreement with each creditor would be more preferable to a DRO. If need be, would a DRO still be obtainable even with his account now be being held by a debt recovery company?

Tixy

Hi

Yes they can pass on the debt / or sell it on at anytime after it has gone into arrears. And its fairly usual of them to do so eventually.

It could well happen with his credit card but equally they may hold on to it for a bit longer or a lot longer. If they do pass it on it could well be to a different debt collector.

They can ask for him to pay more. But they should not consistently harrass him to pay more if he has told them he is unable to (under the OFT debt collection guidelines).

They may accept the same payment Lloyds did. Although its always possible they will take court action to obtain a CCJ this is threatend far more than actually happens. Their letters generally contain words like we 'may' take further action, or failure to repay 'could' lead to court proceedings etc.
Even if they did obtain a CCJ then he could still ask to pay in installments at a rate he can afford (which would be checked by the court and could well be less than £27 if he is unemployed).

In future its best not to speak to debt collectors on the phone but to keep everything in writing and to keep paying whatever amount he can afford.

Onyor

Thank you for the response Tixy,

I hope they don't ask for more because we physically cannot pay any more than that. Hell, we struggle to even make sure we can afford the £27 a month most of the time!

He only phoned them because the letter said to contact them by 10/10/2012, and with the holidays coming up the likelihood of a letter reaching them in time was slim.

Tixy

In terms of a DRO - the debt being with a debt collector wouldn't affect that. He could certainly consider speaking to CCCS again and looking at whether he would still qualify and whether it might be a good idea for him.

They will always ask a debtor to pay more than whatever is being paid - but don't be bullied into agreeing it.

skevans

Onyor wrote: »

I hope they don't ask for more because we physically cannot pay any more than that. Hell, we struggle to even make sure we can afford the £27 a month most of the time!

Moorcroft or any other debt collection agency cannot ask you to pay more than you can afford. This is definetly worth bearing in mind.

Perhaps you could actually agree a payment plan of a reduced ammount, £20, or even £10. You will have to be persistent though.