Freezing Interest Technique?

Mikeusher

A friend has 3 overdrafts and 1 loans withs lloyds and has very recently started a debt management program using the CCCS. She owes 25k and is paying about £500 interest monthly.

Lloyds have decided not to freeze the interest on her debt and shes can only afford to re- pay £350per month which she starts in May. So now the debts growing by £150 monthly.

Shes not missed a repayment so far on any of the debts probably by re- borrowing.
Should she start defaulting the repayments in order to get debt collection agencies involved? Who might stop the interest?
Is there a particular button to push which help change the lenders mind in these situations?

Thanks

Time_to_face_the_music

Mikeusher wrote: »

A friend has 3 overdrafts and 1 loans withs lloyds and has very recently started a debt management program using the CCCS. She owes 25k and is paying about £500 interest monthly.

Lloyds have decided not to freeze the interest on her debt and shes can only afford to re- pay £350per month which she starts in May. So now the debts growing by £150 monthly.

Shes not missed a repayment so far on any of the debts probably by re- borrowing.
Should she start defaulting the repayments in order to get debt collection agencies involved? Who might stop the interest?
Is there a particular button to push which help change the lenders mind in these situations?

Thanks

Hi Mike

Lloyds seem to handle different debts in different ways. One of our debts is a Lloyds TSB credit card which was dropped to a very low interest rate about 6 weeks into our DMP. One is a Lloyds overdraft which has actually had the interest increased. Your friend probably needs to let it settle down for a few weeks after her first payment and see what happens, we are 3 months in and things are just starting to "normalise".

If she doesn't make her payment in May to CCCS, I assume CCCS will cancel the DMP and leave her to handle her own debts. We preferred to have the backup of CCCS to get this going but there are plenty of people here who do self adminster their DMP and I think anyone will tell you that there are no guarantees of frozen interest either way, it's just something that we all hope, and occasionally fight for.

I'm sure someone else will be along with more advice soon but I do think she needs to sit tight for a short while and see what happens after her first couple of DMP payments are sent.

Mikeusher

Ttftm,
What you say makes perfect sense! I suppose CCCS will keep nagging LLoyds on her behalf. Obviously from there opinion shes was a goldmine and they are reluctant to see it finish. Its really a case of toxic debt atm which drives me crazy I just want find a solution with a light at the end of the tunnel for her. Thanks for the advice>

Hatecreditors.com

Mikeusher wrote: »

Ttftm,
I suppose CCCS will keep nagging LLoyds on her behalf>

Except they won't. They ask them once when the DMP is set up. Not that it really matters anyway. Creditors don't assess interest by the amount of times they are asked to reduce or freeze said interest. They come up with a decision and stick with it.

I've never had any dealings with LLoyds but Barclaycard are horrendous for applying interest. They simply won't budge and I've asked on countless occasions.