Help...Sudden charges IVA company never mentioned! No I have to pay up!

KatMalta

Hi, this is my first post sorry if it's a bit long!

Wondered if anybody has gone through anything similar and if you would have any advice since I am at the end of my tether!

I had an IVA in 2005 which I managed to pay off all my creditors through last May (2011). Now I have a debt collection company chasing me for money. I called the creditor to whom the debt applies and they told me that it was charges that were applied because I wasn't paying my contractually agreed amount every month. But the Debt Management company I used, had told me when I started that they would agree an amount with my creditors although some interest may still be applied. I was never told about these fees which this creditor has been applying every month since 2005! Now, the debt collection agency is applying interest onto these charges and I have no idea what to do!

I have contacted the debt management company who said they can't do anything, the creditor says that the charges are to be paid and the debt collection agency is threatening to take me to court.

I lost my job at the end of last year and after months of being unemployed, I had to take the first job I could which is minimum wage and I am stressed to the hilt about this as I am only just managing financially and really thought that on top of everything else going on, at least I was debt free.

I don't know where to turn or how to challenge this (I have tried with the three companies involved but it's like talking to a brick wall). All I know is that I simply cannot afford to pay it and I feel like bursting into tears and hiding under the duvet!:(

Any advice would be greatly appreciated.

Thanks

Gimpsdad

From your post, it seems you were on a DMP and not an IVA. An IVA would have seen all interest and charges frozen by law once accepted, however you state that your DMP company told you at the start that they could not guarantee interest freeze, hence the assumption of DMP.

You need to look at the situation as it is now. How much do you owe to them? Can you afford to pay anything to the debt, if so how much?

KatMalta

Hi, thanks for your reply. You're right it is a DMP rather than an IVA, sorry.

It's not a great amount of money (under £200) but it's money I don't have and they are going to keep on applying interest so it's just going to get bigger and bigger and I can't seem to stop it. I am annoyed that I never knew about this before as when I made my final payment last year, I was earning good money and could afford to clear it but the creditor told me a different amount, so I paid that thinking that was that, then suddenly 6 months later, I get this is a nasty surprise and I am in a completely different situation.

Can they apply interest on another company's fees? Can I challenge it? Surely it's the DMP's fault? Or have I no choice but to pay it?

Gimpsdad

It would be difficult to say definitively what they are and aren't allowed to do without seeing any documentation.

I do understand the frustration on this, do you have access to a partial amount, say £100? Even if that had to be borrowed from a friend/relative, you may find that the company involved would be happy to accept it as a final settlement of the debt. Alternatively, £20 per month would see the debt cleared very quickly, even if they did continue to apply interest. On a debt of less than £200, the interest would be very low on a monthly basis.

balmk

*confused*

So, when you say that you cleared all of your debts did you get confirmation of this? I don't understand how, if the debt is paid off, they can then be applying penalty charges for missed payments which no longer need to be made?

KatMalta

Well, I was stupid here. They did confirm it to me over the phone but I never received a written confirmation and didn't chase it up - yes, I am kicking myself pretty hard! I just phone Black Horse who found the call transcript from last year saying that I was told that this was paid off. But then the lady said, 'only the debt was paid off, not the management fees' and that is what the person I spoke to at the time was confirming.

I paid all of this off almost 12 months ago and it seems odd that they are only now, chasing for the money. Why didn't I get reminders? I feel like telling them to !!!!!! off but I am afraid I will have debt collectors at my door.

I am trying to get the original agreement from the Debt Management company I used. If there is nothing about the fees on there, can I legally tell them that it's nothing to do with me since they applied the fees without my knowledge?

Unfortunately, I am not in a position to pay anything to them and my parents are retired so I cannot really ask them.

dancingfairy

How much were the management charges at the time of your phone call? I might be tempted to write back to them and say that as confirmed on the phone with blah. on such and such a date recently that you were only given partial imformation in your telephone call on blah date to confirm how much was owed. Therefore as a matter of goodwill you will pay only those charges at the time you originally phone up.
You could of course file a complaint with Black Horse wait for their response and then take it to the Ombudsman, where it could of course go either way as it is not clear cut (hence my suggestion of perhaps paying the management fees as they were then - hopefully they will only be minimal??). Is there any other proof that you have/they have - did they send your regular statements at all?
Why have they only contacted you nearly a year later?
You have 3 main options:
1) pay it for an easy life
2) come to some sort of compromise or
3) fight it all the way.
df

KatMalta

Thanks for all your replies, they are all appreciated

Dancingfairy: I guess the easy thing would be to pay it off. Unfortunately that isn't an option for me at the moment so I am considering coming to a compromise but I am loathed to do so because of the way I found out about these fees. At the beginning of my debt management, I was told that an agreement was made with my creditors but Black Horse told me on the phone today that I was charged this because I paid less than the minimum payment but they agreed with me that I was told that the actual loan was paid off and this is documented in their transcript of my call last year and the whole 'management fees' thing was never mentioned in that phone call. It would makes sense if no agreement was made but not if one WAS made. The whole thing is so strange, especially the 12 months hiatus before they bother doing anything about it!

I suppose I will have to probably come to an agreement with them in the end but there is a little fight left in me yet, so I am going to try. It all makes me wants to SCREAM!

Lesson learnt: never ever get a loan!