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StepChange_James

kdronan wrote: »

Hi,

What happens if a creditor wont deal with a third party debt management company, such as StepChange?

Regards,

Hello,

The Office of Fair Trading have debt collection guidelines that they expect creditors to follow. You can read them here: http://www.oft.gov.uk/shared_oft/consultations/OFT664Rev_Debt_collection_g1.pdf (PDF document - and a little bit of a dull read).

The relevant bit that is 3.9 (c) which states unfair practice can be classed as:

refusing to engage, appropriately or at all, with a third party
representative, such as a debt adviser at a free advice centre or
a debt management business, or with a debtor developing his
own repayment plan,

So most creditors are willing to deal with third parties and you could make a complaint to the creditor if they refused.

That doesn't mean that they'll accept payment offers (though most do). If a creditors does not accept the payment our response is to send them the money anyway. This means there'll be a record showing that payments are being made regularly at an affordable amount.

For a little while there may be interest and charges added to the debt, which isn't great, but is usually just a phase the debt goes through before being passed on to a debt collector. Then we'd make the same offer of payment to the debt collectors and they can often be more willing to accept payments through DMPs.

Sorry for providing such a long answer to a short question but hopefully this clears things up for you.

Kind regards

James

openforever

Hi James,

I've fallen behind on Capital One payments, and I've just received a Statement of Default (not a warning) for £2,000. It's time to get my head out of the sand and sort this, so I rang Capital One. They've passed the debt to Cougar and say I should ring them to take things further.

What should I do now? Should I ring Cougar and arrange a repayment plan? I've heard that I shouldn't deal with Cougar, but only Capital One... Is that right? Capital One is my only debtor, incase that's important. Also, what happens to interest on the debt? I guess I still have to pay this each month?

Could you also give me some info on how bad this default is for my credit record? It's obviously not great, but I'd like to know what it really means for my future. Once this is sorted, I'd like to repair my rating as much as possible.

I'm quite worried at the moment, so some answers would be great! I've also posted this in my own thread.

Thanks so much.

StepChange_James

openforever wrote: »

Hi James,

I've fallen behind on Capital One payments, and I've just received a Statement of Default (not a warning) for £2,000. It's time to get my head out of the sand and sort this, so I rang Capital One. They've passed the debt to Cougar and say I should ring them to take things further.

What should I do now? Should I ring Cougar and arrange a repayment plan? I've heard that I shouldn't deal with Cougar, but only Capital One... Is that right? Capital One is my only debtor, incase that's important. Also, what happens to interest on the debt? I guess I still have to pay this each month?

Could you also give me some info on how bad this default is for my credit record? It's obviously not great, but I'd like to know what it really means for my future. Once this is sorted, I'd like to repair my rating as much as possible.

I'm quite worried at the moment, so some answers would be great! I've also posted this in my own thread.

Thanks so much.

Hello,

It's usually best to deal with the most recent company that have been dealing with your debt, so Cougar are the best people to speak to about this debt (Capital One would probably just pass you to Cougar if you called them).

If you know what you can afford to offer then you might want to give them a call and try to come to an agreement. As you may expect, dealing with debt collectors can sometimes be tricky, so make sure they don't make you commit to payments you can't afford.

Our online advice tool can help you plan a budget and work out what you can afford if you're not sure where to start: http://www.stepchange.org/msehelp.

The default notice will go on your credit history for six years. It could make it hard to get credit in the future, but all sorts of other factors go into credit checks so it may not make a huge difference.

If you're looking to give your credit rating a boost then I'd strongly recommend this page: http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve. I'd also suggest avoiding the companies that promise to "repair" your credit rating, they're either charging you for things you can do yourself or pushing something a bit dodgy.

Cheers

James

StepChange_James

Hello everyone,

We're going to be out of the office tomorrow (Wednesday the 24th) so won't be able to reply to your questions until we get back on Thursday.

If you need debt help straight away then please use our online advice tool Debt Remedy (http://www.stepchange.org/msehelp).

Kind regards

James (and the StepChange MoneyAware team)

spanglypink

Hi

I'm quite confused about how to negotiate a settlement figure with either a bank or a credit card company?

I have just been made redundant, but as a result have been given a payout which i would like to use to clear some debt. However, i want to get the biggest 'bang for my buck' and clear as much debt as possible, so would like to negotiate a compromise figure of no more than 75% with most of my lenders, ideally 50% or less (cheeky i know, but want to get debt free as quickly as possible!). Just spoke to Barclaycard on the phone and was told that they won't give me a settlement figure until i am 3 months in arrears and even then it will likely be 90% of the total amount?!

Now i don't really want to have black marks all over my credit score from being forced into getting into arrears just so that i can get a settlement figure... but i do want to get to a compromise on what gets paid back and to whom so that i can clear as much as possible with what i have. I know a settlement figure will have an impact on my credit score but is this better or worse than getting 3 months into arrears on repayments?

any advice gratefully received! Thanks!

StepChange_James

spanglypink wrote: »

Hi

I'm quite confused about how to negotiate a settlement figure with either a bank or a credit card company?

I have just been made redundant, but as a result have been given a payout which i would like to use to clear some debt. However, i want to get the biggest 'bang for my buck' and clear as much debt as possible, so would like to negotiate a compromise figure of no more than 75% with most of my lenders, ideally 50% or less (cheeky i know, but want to get debt free as quickly as possible!). Just spoke to Barclaycard on the phone and was told that they won't give me a settlement figure until i am 3 months in arrears and even then it will likely be 90% of the total amount?!

Now i don't really want to have black marks all over my credit score from being forced into getting into arrears just so that i can get a settlement figure... but i do want to get to a compromise on what gets paid back and to whom so that i can clear as much as possible with what i have. I know a settlement figure will have an impact on my credit score but is this better or worse than getting 3 months into arrears on repayments?

any advice gratefully received! Thanks!

Hi Spanglypink,

Full and final settlements tend to happen on accounts that creditors would consider "bad debts". Their thinking is that if they are going to sell the debt to a debt collector they may as well just take the equivalent money (or more) straight from the person in debt.

If you're reasonably up to date then it's probably going to be hard work getting any sort of reduction from your creditors.

It's hard to say whether three missed payments would affect your credit rating more than making a settlement. It's down to how a potential lender would interpret your credit history.

One thing that may help with negotiating with your creditors would be to put together an income and expenditure budget showing your current situation. If this shows that you're clearly going to struggle to keep up with payments they may be willing to settle if they can see problems with the account in the near future.

If you do manage to negotiate a settlement then I'd strongly recommend you get it confirmed in writing before sending any money.

Kind regards

James

uphillstruggler

Hi,

I have £11,000 debts in loans, CCs and ODs.

Due to a career change and struggling to keep up with the huge repayment cost, then constant charges, I am sinking. Finally plucked up the courage to tell a family member.
I have called my creditors and explained the situation. Some sent me I&E forms; some did it over the phone; I have a monthly deficit of circa -£300 for paying off debts. It can't be done.

Family member (retired, not much ££) has very very kindly offered to loan money to pay off debt on a partial settlement basis; Santander seem to be happy with 30% settlement but have put accounts on hold for 3 mths to see if situation improves; HSBC want 80%. In fact, HSBC weren't too helpful. They said in 6 months they would send debt collectors round to collect the debt. Yep, thanks! Is there a "normal" figure accepted?

Am I missing something? Not sure what the normal procedure is here. Not keen to pay nominal fee per month because I don't have £1. Just want them out of my life. I know my credit rating will be shot for 6 years. I am so desperate now I just don't care. I am concerned that by making a partial settlement they might chase me for the debt at a later stage?? Can this happen?

I'd be so grateful for any advice you can give me.

Thank you.

StepChange_James

uphillstruggler wrote: »

Hi,

I have £11,000 debts in loans, CCs and ODs.

Due to a career change and struggling to keep up with the huge repayment cost, then constant charges, I am sinking. Finally plucked up the courage to tell a family member.
I have called my creditors and explained the situation. Some sent me I&E forms; some did it over the phone; I have a monthly deficit of circa -£300 for paying off debts. It can't be done.

Family member (retired, not much ££) has very very kindly offered to loan money to pay off debt on a partial settlement basis; Santander seem to be happy with 30% settlement but have put accounts on hold for 3 mths to see if situation improves; HSBC want 80%. In fact, HSBC weren't too helpful. They said in 6 months they would send debt collectors round to collect the debt. Yep, thanks! Is there a "normal" figure accepted?

Am I missing something? Not sure what the normal procedure is here. Not keen to pay nominal fee per month because I don't have £1. Just want them out of my life. I know my credit rating will be shot for 6 years. I am so desperate now I just don't care. I am concerned that by making a partial settlement they might chase me for the debt at a later stage?? Can this happen?

I'd be so grateful for any advice you can give me.

Thank you.

Hello,

I don't think there really is a set amount that creditors are likely to accept for full and final settlements. As you've seen, some are willing to offer big reductions and others can be tougher to negotiate with.

Debt collectors don't have any more power than HSBC have at the moment, so them passing the debt on wouldn't affect you. Other than you'd just have to deal with the debt collector instead of HSBC, but they can sometimes be a bit more willing to come to arrangements.

I'd recommend trying to get some sort of payments to your debts that aren't cleared. If your budget is in deficit it might be hard to find much but any payment at all will show that you're acknowledging the debt.

I've spoken to people in the past who've had debt collectors start chasing them for the leftover balance of a debt cleared by full and final settlement. If you've got written confirmation of the agreement and proof of sending the money then you should be covered.

That's why it's important to get agreements in writing and keep them somewhere safe afterwards.

Hope this helps.

James

Tyfelt

I have a personal loan with Barclays that usually I pay off with no problems but lately have been having difficulty with due to reduced income. I don't predict it being a long-term problem, but need to pay a lower amount for a few months. I called Barclays to negotiate this and told them exactly what I could pay and that I would recoup the deficit ASAP. They actually accepted my terms straight away, however when speaking to them I said that if we were unable to come to an agreement I would have StepChange contact Barclays on my behalf. The person I was speaking to said that if I did that all my current accounts would be closed. I assume they meant Barclays accounts, so I said I didn't have any (which I don't), and they replied that all my current accounts would be closed Barclays or otherwise. This seems like it must be untrue as I don't see how it helps me clear my debt. Have they lied to me?

mum2one

Tyfelt wrote: »

I have a personal loan with Barclays that usually I pay off with no problems but lately have been having difficulty with due to reduced income. I don't predict it being a long-term problem, but need to pay a lower amount for a few months. I called Barclays to negotiate this and told them exactly what I could pay and that I would recoup the deficit ASAP. They actually accepted my terms straight away, however when speaking to them I said that if we were unable to come to an agreement I would have StepChange contact Barclays on my behalf. The person I was speaking to said that if I did that all my current accounts would be closed. I assume they meant Barclays accounts, so I said I didn't have any (which I don't), and they replied that all my current accounts would be closed Barclays or otherwise. This seems like it must be untrue as I don't see how it helps me clear my debt. Have they lied to me?

The person has given you wrong information, they can close a Barclays account or claim any cash that you have it that, also any accounts tha are tied in with Barclays (bar Ing direct, can't think of anyone).

The best thing is your being proactive - its a bank thing to try to get some more money from you. x