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StepChange_James

photographer1953 wrote: »

I need some advice for my Sister who is at the end of her tether. She was made redundant a long time ago and after a year managed to get a temp job for 11 .months and then managed to find herself a permanent position elsewhere. The money was nowhere near as good as the job she was made redundant from but was far better than the JSA that would have been on offer had she of signed unemployed.
Anyway, she found that her new wage would not cover her repayments on loans etc etc. so she got a financial statement form online that the CAB supply.

She filled it in honestly and with everything being very transparent and checkable should anyone of these companies wanted to.
ALL of these companies, (including Lloyds TSB whom she owe's 17k to and accepted £39.00 per month without quibble ) accepted her repayment offer...............except one, "Over 50+" catalogue, She offered them what she literally had left, £3.00 a month, not a lot I know but all she had left. She sent them 4 financial statements as they claimed they had not received any and also spoke to one of the people on the telephone (she rang them). They sent her a letter saying they agree to the £30.00 per month repayment plan.........which is NOT what she offered and can not pay as she has not got anywhere near that left once she has paid the others out. They in turn have carried on adding interest and a "unpaid" fee on top. In a telephone call my Sister made to them yet again today they have said that they will not stop the interest or fees being added next month as the offer of £3.00 per month woukld take a long time to pay the balance off (approx'1k). My Sister argued that if that is all she has then that is all she can pay and that if they were going to carry on adding fees and interest the the balance would never get paid off as they were increasing it with their fees.
They then told her that they would stop it of she went o the CAB and they dealt with it. Even though the financial statement form showing her income/expenditure is supplied by the CAB online they say this is not good enough (it was good enough for all her other creditors). CAB will do it but they want to handle ALL the debts she owes but she is against this as she has sorted it all out with all the other creditors who have, fair play, bent over backwards to help her. It is just this one company. I have told her to send them a letter asking for a true copy of the agreement (she has been with them since 2006) and to stop payment until they comply a paying the £3 per month is sensless if they are going to continue to pile on the fees.

She is at her wits end with worry. What can she do? is there a standard template letter she can send them as they are also refusing to stop the fees.

Sorry for the long winded post but needed to give some background and details.

Thanks in advance.

Keith

Hi Keith,

Thanks for posting.

Creditors don't have to accept reduced payment offers, but as you've seen with most of your sister's debts, most will if they are being offered a reasonable amount.

Obviously it's not great if the payment being offered isn't going to clear the debt for a long period but this if often unavoidable and usually not a long term situation.

It doesn't seem fair that payment are being rejected simply because the offer is being made directly by your sister rather than a debt advice organisation. In fact this area is covered by the Offic of Fair Trading Debt Collection Guidelines (the full guidance is here: http://www.oft.gov.uk/shared_oft/consultations/OFT664Rev_Debt_collection_g1.pdf).

The relevant section is 3.9 c:

An example of unfair practice would be:

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 it may be worth submitting a complaint along these lines. If the payment was rejected because it came directly from your sister then it could be argued that this was unfair.

I'm afraid I don't have a template letter for such a circumstance but complaint letters don't need to be anything too fancy. Just a short letter outlining the issue and asking them to investigate your complaint.

Your sister should receive a response to a complaint within 8 weeks and if she's unhappy with the response then she could then ask the Financial Ombudsman to investigate it.

I would recommend that your sister continues with her £3 payment, even if they say they don't want it, as it will show a record on her account of her trying to pay something. If the £30 she offered was too much for her then it'd be a bad idea to try and pay that as it is likely to mean a more important household bill would suffer.

I hope this helps.

James

StepChange_James

Roger_Rampant wrote: »

I don't really want to go to the expense of a Time Order application which the Reading finance company have said that they will contest.

Is there any point asking the Ombudsman in a case that already has a CCJ and Charging Order made?

Hi Roger,

There is a risk of expense with Time Order applications which means they aren't always a great option. If it's something you want to look into in the future I'd suggest seeking legal advice.

It's hard to say about the Ombudsman. The debt going through court and having a charging order set doesn't mean you couldn't complain. Their letter to you did make it sound like they're entitled to have added the interest they've put on, but putting a complaint to the ombudsman would be a way to get a neutral party's opinion. Here's more details: http://www.financial-ombudsman.org.uk/consumer/complaints.htm.

Either way, I'd suggest trying to get something arranged like a monthly installment set up with the company to deal with this debt as that may be enough to get them to stop adding further interest.

Kind regards

James

photographer1953

Hi James,
Thank you for your reply and I will look into what you suggest.
Just a point though, my Sister did not offer them £30.00 a month at any stage simply because she never had that to offer in the first place hence the £3.00 a month which is quite literally all she has left to offer and which she pays them. It was the company that wrote to her saying they would accept her offer of £30.00 a month..........something that she has never ever offered them so don't know where they came up with that figure.

Also, their fees will keep on inflating the balance owed because they will not freeze it. Her balance when this started in January was just over £700.00 but because of the "fees" it now stands at over £1000.00 and rising monthly and she has just under £40.00 a week to feed herself.

I can understand why some people take their own life when companies do this and there seems no way out for the debtor and they must know that this has no chance of ever being paid by the debtor.

Keith

lessonsinlove

So - i was stupid. I defaulted on my credit card and I'm now trying to resolve it to the best of my abilities.

I'm aware I can try to attempt to offer a settlement to get them to remove it (not settle it). Are there template letters on here that I can use and is this the best approach for me? My debt amount is for just over £5000 - I currently have about £1200 in savings - what's an acceptable (in your opinion) offer?

Finally, I never received the default warning letter, as I moved house. I'm aware others have been successful in the past with sending letters regarding not receiving the default letter, although it's a longer process. To be honest I just want to be able to resolve this as quickly as possible so that i can start applying for mortgages. I'm happy to take the hit financially as long as it solves my problem.

Advice please...

BigGirlPants

Due to an awful year my husband has been trying to shield me from how badly in debt we are, and has finally told me all an hour ago. Basically we are 10k in debt.

We need help and are approaching this together as a team.

We have a telephone appointment with Step Change on Thursday, but do want to retain control of our accounts (is this possible?).

Please can someone advise me what else we can do.

It is all credit card debt and a bank account, all below our max credit limit.

The bank account was having DD's return but we have managed to bring it below the overdraft limit so nothing further can be returned.

This is all a blow, and of course the fact that I was kept in the dark is hurtful, although I understand the reasoning but really I need to know what steps I and we can take to get things on track.
We could afford minimum payments but really I'm not happy with that.

If I can find some money from selling belongings and cashing it wherever possible. How do I prioritise what to pay and get this into a manageable plan?
It's very stressful, but I believe it's not the worst that can happen and just want to get it organised so we can cope.

Thanks

StepChange_James

photographer1953 wrote: »

Hi James,
Thank you for your reply and I will look into what you suggest.
Just a point though, my Sister did not offer them £30.00 a month at any stage simply because she never had that to offer in the first place hence the £3.00 a month which is quite literally all she has left to offer and which she pays them. It was the company that wrote to her saying they would accept her offer of £30.00 a month..........something that she has never ever offered them so don't know where they came up with that figure.

Also, their fees will keep on inflating the balance owed because they will not freeze it. Her balance when this started in January was just over £700.00 but because of the "fees" it now stands at over £1000.00 and rising monthly and she has just under £40.00 a week to feed herself.

I can understand why some people take their own life when companies do this and there seems no way out for the debtor and they must know that this has no chance of ever being paid by the debtor.

Keith

I'm sorry, I misread your earlier message. It's absolutely the right thing to only pay what your sister can afford, so £3 a month sounds like the best option.

Being in debt can be incredibly stressful, particularly when creditors don't co-operate with reasonable payment offers.

This page on our website provides some details about the impact debt can have on people: http://www.stepchange.org/debtinmind.aspx.

If an agreement can't be made with this company then there's a reasonable chance that the debt will be transferred to a debt collection company reasonably soon.

While this is often made out to be a bad thing, we find that debt collectors tend not to apply as many charges to accounts and usually are more willing to listen to lower payment offers (and they don't have any extra powers).

Kind regards

James

StepChange_James

lessonsinlove wrote: »

So - i was stupid. I defaulted on my credit card and I'm now trying to resolve it to the best of my abilities.

I'm aware I can try to attempt to offer a settlement to get them to remove it (not settle it). Are there template letters on here that I can use and is this the best approach for me? My debt amount is for just over £5000 - I currently have about £1200 in savings - what's an acceptable (in your opinion) offer?

Finally, I never received the default warning letter, as I moved house. I'm aware others have been successful in the past with sending letters regarding not receiving the default letter, although it's a longer process. To be honest I just want to be able to resolve this as quickly as possible so that i can start applying for mortgages. I'm happy to take the hit financially as long as it solves my problem.

Advice please...

Hello,

When agreeing a full and final settlement with a company some people negotiate so there credit rating is updated to show the debt was paid off in full rather than showing a partial settlement was made.

I think this is what you're referring to in the first paragraph, so the default would still show on your credit history but it would be updated to show the debt has been repaid.

As for removing a default because you were not living at the address the default notice was sent to, I can't say I've ever spoken to anyone who's managed to do that. Default notices are sent to the last known address and then registered on your credit file if the account isn't put back into order within the time given.

I suppose this might be possible if you'd advised a creditor of your new address and they'd not updated their records, as they would be at fault. Otherwise I can't see why the default would be removed.

Sorry if this isn't the news you were hoping for. It sounds like getting your credit file back into shape is important to you. Getting the credit card sorted out is obviously going to help with this.

To answer you question about an acceptable offer, £1,200 to clear a £5,000 would be quite an achievement. The amounts that companies accept for full and final settlements varies hugely, so the only way to know is to talk with the company you owe the money to.

Good luck with the settlement offers and the house hunting.

Kind regards

James

StepChange_James

BigGirlPants wrote: »

Due to an awful year my husband has been trying to shield me from how badly in debt we are, and has finally told me all an hour ago. Basically we are 10k in debt.

We need help and are approaching this together as a team.

We have a telephone appointment with Step Change on Thursday, but do want to retain control of our accounts (is this possible?).

Please can someone advise me what else we can do.

It is all credit card debt and a bank account, all below our max credit limit.

The bank account was having DD's return but we have managed to bring it below the overdraft limit so nothing further can be returned.

This is all a blow, and of course the fact that I was kept in the dark is hurtful, although I understand the reasoning but really I need to know what steps I and we can take to get things on track.
We could afford minimum payments but really I'm not happy with that.

If I can find some money from selling belongings and cashing it wherever possible. How do I prioritise what to pay and get this into a manageable plan?
It's very stressful, but I believe it's not the worst that can happen and just want to get it organised so we can cope.

Thanks

Hi there,

Thanks for posting. It must have come as quite a shock, I'm impressed with how you're dealing with it all.

The telephone appointment with one of our debt advisors should give you a good starting point and I think will answer all of these questions.

There are lots of different debt solutions and we'll help you plan out a budget - separating priorities (household bills and living costs) from non-priorities (unsecured credit debt). From there we'll then talk to you about the options you've got available.

Some debt solutions involve you dealing directly with the debts yourself others don't. On Thursday we'll only be looking to give you advice at that stage, so we can talk you through options which mean you can retain control.

Making sure your Direct Debits are going to be OK is a great step to have taken as it should help to steady things a little. If you're going to struggle to pay everything that's due out I'd suggest making small gesture payments to credit cards and making sure the household costs are covered wherever possible.

It tends to be that things seems worse at this point and once you've had chance to take stock and look at your options it doesn't feel quite so bad.

I don't think there's much more I can suggest you should do, it sounds like you've already done the most important stuff.

One small suggestion perhaps. In preparation for your appointment on Thursday I'd recommend thinking about what you spend on things like food, clothes, travel and telephones as the Debt Advisor will go through these with you.

Kind regards

James

photographer1953

Thank you for that James.
Can you tell me what can or would happen if she continues to pay the £3 per month (as this is all she can only offer this last company) which they will not accept and still pile on the charges as stated previously. She has already been told by the one person she spoke to that they would not take her to court but would instruct a collection agency.

They keep sending her letters saying the she is ignoring them and that she should contact them but she has sent 4 letters and made 2 telephone calls. As far as I am concerned this is now amounting to harassment.

I have a template letter from this site that I intend to give her to fill in the blanks and send to them. 1 is a letter asking for a True Copy of her agreement with them and the 2nd is about them harassing her. Will either of these be of any use?
I have told her that they cannot take what she has not got regardless of their demands but the concern is the mounting interest and fees and all this stress is now beginning to have a affect on her (restless sleep, tearful).

Keith

lessonsinlove

No, not quite the news I wanted to hear James! Thanks anyway though, appreciate your honesty.

Out of interest, which do approach do you think would be more successful? I indeed did let Barclaycard know that I was moving, in a telephone conversation regarding managing my debt - but fear they would not believe me. Would i have a chance? Or would it be better to pay off the default, but with it still on my credit report? Would i get a mortgage like that?