Struggling with debt? Ask a debt advisor a question

FishMan

Hello. I could do with a bit of advice.

I used to be in debt - nearly £30,000 worth. Over time and with the help of PayPlan I have cleared all my debts - or so I thought...

I recently applied for a mortgage. I knew I had settled defaults, but I thought I would give it a try. I was turned down due to an outstanding default of only £4. The bank couldn't give me anymore information than the amount, they couldn't tell me who it was with. I have applied for my credit reports from Experian and Equifax. No outstanding defaults are showing on either of these reports. All accounts are showing as satisfied.

Next directory, even though showing as owing nothing did have a £4 balance on it so I have rang them up and my account with them has not been in arrears, let alone been in default.

So my question to you is this.

How can I find out who I owe this £4 too? The mortgage advisor said that he has seen this £4 amount show up on peoples credit score quite a lot, and that it may be a mistake.

StepChange_James

FishMan wrote: »

Hello. I could do with a bit of advice.

I used to be in debt - nearly £30,000 worth. Over time and with the help of PayPlan I have cleared all my debts - or so I thought...

I recently applied for a mortgage. I knew I had settled defaults, but I thought I would give it a try. I was turned down due to an outstanding default of only £4. The bank couldn't give me anymore information than the amount, they couldn't tell me who it was with. I have applied for my credit reports from Experian and Equifax. No outstanding defaults are showing on either of these reports. All accounts are showing as satisfied.

Next directory, even though showing as owing nothing did have a £4 balance on it so I have rang them up and my account with them has not been in arrears, let alone been in default.

So my question to you is this.

How can I find out who I owe this £4 too? The mortgage advisor said that he has seen this £4 amount show up on peoples credit score quite a lot, and that it may be a mistake.

Hello,

I can't say I've heard of this to be honest. It seems a bit strange that the mortgage advisor saw something on your credit history which you can't see.

There are only three credit reference agencies in the UK, the one you've not used is Call Credit. You can get a copy of your history with them for free here: https://www.noddle.co.uk/.

Really all three agencies should have broadly the same information but it does sometimes happen that one has information that the others don't.

If there is nothing showing on Call Credit then I'm at a bit of a loss as to where this has come from. It might be an issue with the computer systems the mortgage company were using perhaps.

Having defaults updated to satisfied is much better than them still showing as being outstanding but even then your credit score is probably being dragged down by the satisfied defaults (they'll drop off six years after the default date though).

It seems odd that it was just the £4 default in isolation that lead to being declined. I'd expect that they'll have taken lots more of your details into account when making a decision but I suppose it could be that this £4 was the thing that tipped the scales against you.

I hope you manage to get to the bottom of this.

James

Horsesense

Hi,
Last week my son agreed to
help me pay off a remortgage and credit card debts. Now he is getting cold feet because he doesn't like the company I've hired to negotiate a settlement with the creditors. This company is called DEBT SOLVE DIRECT and the reason I've hired them is because they have promised me they can reduce my settlement to the credit card companies by 30 per cent. My son has done searches and can find nothing about this company to give him the trust for us to deal with them. How can I persuade him to go along with me with this firm, as what they are offering seems pretty good?

StepChange_James

Horsesense wrote: »

Hi,
Last week my son agreed to
help me pay off a remortgage and credit card debts. Now he is getting cold feet because he doesn't like the company I've hired to negotiate a settlement with the creditors. This company is called DEBT SOLVE DIRECT and the reason I've hired them is because they have promised me they can reduce my settlement to the credit card companies by 30 per cent. My son has done searches and can find nothing about this company to give him the trust for us to deal with them. How can I persuade him to go along with me with this firm, as what they are offering seems pretty good?

Hello,

Thanks for posting.

I've not really come across Debt Solve Direct before so can't really comment either way about them. I'd guess that they'll be taking a fee out of any lump sum before passing it on to the creditors though.

It's debatable whether they'd be able to negotiate a big enough discount on the debts to cover their fees as companies tend to be willing to negotiate directly with people.

It might be worth trying to agree settlements directly to see how it goes. You can read more about settlements here: http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Settlementoffers.aspx.

This tool is quite handy for working out how to proportionately divide up settlement offers too: http://mymoney.nedcab.org.uk/moneyadvice/fullfinalcalc.asp.

If you and your son are going to negotiate directly then it's important to remember to get settlement offers confirmed in writing before sending any money, so you've then got proof of the agreement.

Kind regards

James

leedspete_2

I have recently been made unemployed. Have managed to get payments sorted on cc(got a default on this),premierman,jdwilliams,fashion world. Called very as i owe them money as well but could only afford £15 for both accounts but they refused. They told me to go to stepchange but i really want to sort this my self. Is there anything i can do with very or not?
Many thanks

peter

StepChange_James

leedspete wrote: »

I have recently been made unemployed. Have managed to get payments sorted on cc(got a default on this),premierman,jdwilliams,fashion world. Called very as i owe them money as well but could only afford £15 for both accounts but they refused. They told me to go to stepchange but i really want to sort this my self. Is there anything i can do with very or not?
Many thanks

peter

Hi Peter,

Companies should be willing to negotiate payment directly with you, however it does happen that some prefer you to go through an debt advice organisation.

You don't have to agree to their demand. You could just pay them the amount you've offered them and ignore their demands for more money.

In the short term this may lead to some interest and charges being added to the debt but this can be the lesser of two evils if the alternative is giving them money you need to support yourself.

When they say they want you to come to us, I expect they mean to get advice and put together a budget rather than for us to manage your payments.

Our online advice tool, Debt Remedy (http://www.stepchange.org/msehelp) takes about 20 minutes and will give you a budget and template letter you can use to write to your creditors offering reduced payments (assuming this is the best option).

Doing this won't guarantee Very will accept your reduced offers but often they are more willing to reduce payments when you can back your offer up with an income and expenditure budget that proves you're offering as much as you can afford.

It's worth adding that your offers may actually be too high even though your creditors say they want more. It's most important that you cover your own essential costs first and only offer debts what you've got left over. If that means paying them a very small amount then it's reasonable to do that.

I hope this helps.

James

leedspete_2

It just means that the debt will go higher and higher with them.

StepChange_James

leedspete wrote: »

It just means that the debt will go higher and higher with them.

It's a good point Peter. Usually companies are willing to freeze interest and charges if you're offering a reasonable payment but if they don't then debts can go up.

This does tend to only be for a short while though. The usual process debts go through if a payment is rejected is you'll get some phone calls and letters (probably including a default notice) encouraging you to pay more. If you can't afford to then it's best to stick to what you can afford, so there are regular payments going to the account even if it's not as much as they want.

Usually after a few months the debt will be passed to a debt collector. They don't have any extra legal power and are often more willing to stop interest and charges if they see you're trying to deal with the debt.

So it's not great but it's unusual for interest to be added on indefinitely in these situations.

Kind regards

James

em.chid

Hey, I hope someone can help me on here ... My problem is ... I have got 3 catalogues, Littlewoods, Isme & Very. In June last year I was made redundant, I spoke to all 3 catalogues about this and they was very understanding. I started employment again in October and rang the catalogues up to start a payment plan to pay off my debts, this was fine with littlewoods as my debt to them was only £150, I was told that the Isme and Very account would be put together so that I would just have the 1 account to pay which I have been doing £50 in total (£25 each) which is all I can afford. I haven't heard from either Isme or Very until recently when I received a letter from a company called Lowells which are collecting the debt for Isme and NDR which are collecting the debt from Very. I have spoken to both these companies and explained the situation to them and have had a reply back from both which states that no payment plan was put into place and the 2 accounts was never merged which is what I had agreed with them both! I have been paying £50 for both but it has only been going onto the Very account and I have now being charged by both Isme and Very for not paying! I don't know what to do, I don't remember ever receiving a CCA. I apologise if any of this doesn't make sense but I am getting so stressed with it. If anyone can help it would be much appreciated. Thank you

StepChange_James

em.chid wrote: »

Hey, I hope someone can help me on here ... My problem is ... I have got 3 catalogues, Littlewoods, Isme & Very. In June last year I was made redundant, I spoke to all 3 catalogues about this and they was very understanding. I started employment again in October and rang the catalogues up to start a payment plan to pay off my debts, this was fine with littlewoods as my debt to them was only £150, I was told that the Isme and Very account would be put together so that I would just have the 1 account to pay which I have been doing £50 in total (£25 each) which is all I can afford. I haven't heard from either Isme or Very until recently when I received a letter from a company called Lowells which are collecting the debt for Isme and NDR which are collecting the debt from Very. I have spoken to both these companies and explained the situation to them and have had a reply back from both which states that no payment plan was put into place and the 2 accounts was never merged which is what I had agreed with them both! I have been paying £50 for both but it has only been going onto the Very account and I have now being charged by both Isme and Very for not paying! I don't know what to do, I don't remember ever receiving a CCA. I apologise if any of this doesn't make sense but I am getting so stressed with it. If anyone can help it would be much appreciated. Thank you

Hello,

It might be worth making a complaint about whichever company told you they were going to merge your accounts but didn't follow through with it. You could also complain that you set up an agreement which they've ignored.

It also would be worth checking to make sure all your £50 payments were received and added to the Very account. They probably have been but it does sound like things have got confused so there's no harm in checking.

It's usually best to complain in writing, to the company you originally had the problem with (in this case the catalogue company that said they'd accepted your agreement and merged your accounts). If you're unhappy with how they respond to your complaint you can then involved the Financial Ombudsman Service, who can make an independent decision on the complaint.

While all this is ongoing there's no harm in trying to come to arrangements with the debt collectors. They don't have any more power than the catalogue companies and it's possible to set up affordable payments with them.

We can help you work out the best thing to do with them. Our free advice tool, Debt Remedy(http://www.stepchange.org/msehelp) will ask you for some details and then provide you with a personal action plan to get back on top of things.

I hope this helps.

James