Student with credit history in ruins..?

od0s

Hi all.

I am looking for some advice here and am grateful to anyone who can help me.

When I was about 18-19 I received a credit card letter from CapitalOne offering me to sign up for a card. Naively I did and they gave me a credit limit of £3000, even though I was only a University student. To cut a long story short, within 6 months I was suffering from a gambling addiction and managed to max out my card based almost solely on gambling account deposits.

I tried to hide this fact for a few months, until my Mum opened a letter from them. She was obviously shocked at what had happened, and there was no way I could afford repayments.

I contacted a debt helpline first, and they told me I must contact CapitalOne to tell them my situation and offer small repayments.

When I contacted them I didn't receive much help. There call centre was based abroad (India, I think) and they failed to fully comprehend what had happened. They almost instantly offered me a 'revised' repayment plan, but it was still around £100 per month, which I could not afford.

I then told them I needed to have interest frozen and charges stopped, as I was simply unable to cope with this debt. She then told me this was done.

I then did what was probably the wrong thing, and tried to block it out of my mind. Literally a couple of months passed until I started to receive calls from a Debt Collection agency. They would ring me daily, and I also received a couple of letters asking for payment of around £3400.

However, eventually the calls stopped. I never get calls now, even though I have the same number. I am not sure about letters, as I have moved to a new address, but I would assume I'd be easily found if they wanted to locate me, as I've only moved a few roads away.

Of course, now I have almost completed my degree, I am worried about my future.

Will they still hold this debt, maybe be adding to the amount and hit me with a massive bill when I start earning?

Will I ever be able to get credit again? I have another card with Egg, but the limit is only £500 and is manageable, and I pay it each month. But if I now try to get any other credit (failed in switching bank accounts and a £400 limit student credit card recently) I fail.

Will this ever be repaired? I would ideally want to get a mortgage in a few years, but at the moment I'm fearful I am blacklisted forever.

I am sorry this is so long-winded but I tried to get all the details across. Basically I want to find out what is likely to happen with this old debt, and what my future chances of getting any credit will be.

Many, many thanks for any advice.

opalfruits_2

Hi od0s,

There is no such thing as blacklisting, just to put your mind at rest. When you apply for credit, the lender reads what your credit file says and then makes their own decision based on the information on there. Your credit file doesn't offer opinions on whether you should be given credit or not, it simply states what accounts you have and whether you are up to date on them or not. It is probably a good idea to get a copy of your credit report to see what it says - this will probably explain why you cannot get new credit. You can do this by sending a request to each credit reference agency with a £2 cheque. Any records on your credit file will be held for 6 years, so if there is something marked on your file about your payment history with Capital One then it won't be there for ever.

It sounds to me as though you need another professional independent review of your finances from one of the free, not-for-profit agencies, even though you say you already contacted one helpline. Consider contacting the CCCS, Payplan or the CAB (links at the top of this forum) to book an appointment. Most creditors are a lot more sympathetic to your situation once they realise you have sought professional help.

You don't mention how long it is since Capital One have contacted you about your debt. Be aware that if they have not contacted you for over 6 years, under the Statute Of Limitations Act they can no longer claim for this debt, so if it has been several years since they got in touch with you it may be worth your while keeping very quiet.

Regarding bank accounts, it's worth while getting a basic account which means there are no credit facilities attached at all - no chequebook and no overdraft. Anybody can apply for a basic account as there is no credit offered for you to fail a credit check. It's probably not a good idea to get more credit out at the moment if you struggle to keep up with your payments on existing credit.

Vickicb

I don't think this is statute barred, od0s states he took this at 18/19 as a Uni student and is just about to complete his degree, so I guess the card is around 3 years old, last contact probably made 2 years ago.

od0s, firstly, you need to take a look at your credit file and see what it says. You could also try writing for the original Credit Agreement under the Consumer Credit Act, if the DCA don't have it they cannot enforce the debt and you can follow these steps to get the default off. Chances of this are very slim though, you will probably find you need to enter a payment plan once you graduate and start work, and the default will remain for 6 years from the date it was entered on your file.

opalfruits_2

Vickicb wrote:

I don't think this is statute barred, od0s states he took this at 18/19 as a Uni student and is just about to complete his degree, so I guess the card is around 3 years old, last contact probably made 2 years ago.

I don't want to make any assumptions, I've been a mature student myself

Besides which, even if the debt isn't statue barred at present, if there is the possibility that it could be in the next few years then it's in the OP's best interests to not contact the creditor regarding it

od0s

Hi, thanks for the replies so far.

You have touched upon the main problem I am having, which is that I have the worry of this debt lingering over me, but because they have not been in contact (for around a year now, with the debt being about 2 years old) I am not sure if its in my best interests to make contact with them?

I am sure if I ring a helpline the first thing they'd advise is to contact the creditor. But as I've not been contacted for about a year now, a few people I have spoken to, including my mother have suggested it could be in my interests to say and do nothing. The only downside of this I am worried about is if they are whacking charges and interest on my debt constantly throughout this period.

I have also spoken to a friend of mine who works for a debt collection agency, and he told me that in general once the debt is with a DCA they have taken the debt off the hands of the credit card company for an agreed payment and then the DCA makes its money by tracking down the debtor for a payment above what they paid the credit card company.

I am not sure if this is true, maybe someone would know..?

OrangeProse

Whilst it's true that sometimes creditors can 'go quiet', it doesn't necessarily mean that they've forgotten all about you. Reading between the lines of what you're saying, it sounds like you're nervous of getting in touch with CapitalOne in case by the act of simply contacting them, you 'reawaken' the debt.

It's hard to say what has actually happened, it could be some kind of administrative error - impossible to know. But if the debt still exists, it will still exist somewhere - and at some point it may start coming after you again.

This is of course all speculative. And there's only one way to find out - get a copy of your credit report from the three major credit reference agencies - Equifax, Experian and CallCredit. Your creditors won't be informed that you have requested this information, and once you receive the reports, you'll know exactly what is outstanding and who to.

If the debt has disappeared, then you'll know because it won't be on your credit report. If it is still there somewhere, either still held by CapitalOne or by someone else, it will show up too. Either way, mention it here and people far more qualified than me in this kind of thing will be able to offer you some really sound advice.

Then, you can start working out what to do about it. The thing not to do is to keep doing nothing, because it's causing you stress - you wouldn't have asked the question on here if it wasn't.

Good luck, with whatever you decide to do. And make sure that you get that degree - it's worth it!

od0s

Hi again all. Thanks for your previous advice.

I now have a major problem and I am panicking and do not know what to do.

It turns out Capital One have passed my debt onto a DCA called Robinson, Way & Company Limited.

I got back to my Uni address after being home for Easter to find a letter asking for payment. This was about 2 weeks ago now, but in the last week I have received 3 more letters, the last 2 being a FORMAL DEMAND for payment. The next one being a NOTICE OF LEGAL PROCEEDINGS.

Basically it says they have prepared documents to take me to court.

I guess the first thing I must do is contact them? Although I really feel quite scared to do so. There is no way I can afford any payments, being at uni I barely have enough to live on as it is.

Any advice for me please guys? I really appreciate any comments.

od0s

One thing I would also like to add is that on all their correspondence thus far they have addressed me with the wrong name.

MY actual name is : Mr. F L T Bloggs

They address me : Mr. L Bloggs


I.e they use my middle initial.

Would this make any difference to their powers on my debt, or am I clutching at straws here?

Emmzi

That's a straw, I'm afraid.

They can't take what you don't have, though.

First step is to ask for a copy of the original credit agreement- if they don't have this, they can't pursue. Someone will be along soon with a handy template letter for you.

philwiththepill

You have a debt why dont you pay it off? Or is that thought to honest for you to comprehend?

My analysis of your situation and please correct me if I am wrong, but for what ever the reason may be, you borrowed money from a credit card company and now you do not feel like paying it back because your "special" or perhaps "better" than the rest of us?

In my book borrowing money and not wanting to pay it back is the same as pick pocketing or stealing from a shop.

od0s

I think your comments towards me are somewhat unfair phil. But hey, you're entitled to your opinion.

I accept the fact I will have to pay my debt at some point, but unfortunately that will not be possible for at least another year (i.e when I finish Uni and find myself a full-time job).

The nature of how I built my debt up obviously disgruntles me. I was young and naive at 18 and the money barely seemed real. Also having a gambling addiction is often underestimated, and as you can see the damages I caused myself financially have affected me greatly ever since those crazy 2 months when I racked up this debt.

I will await any more responses on here, but a letter asking for the credit agreement sounds a good idea, but what does this achieve?

Should I call them today, or write this letter first?

I hope someone is able to advise me. Thanks once again.