advice on debt collection company

rare_stuff

My partner owes nearly £16,000 to the HSBC, this debt was transferred to a debt collection agency almost a year ago who have been happy to accept £1 a week. The company is Metropolitan Collection Services and they have been ok to deal with having frozen the interest. Though it's going to take a long time to clear at £1 a week!
My partner is long term sick and prospects for her to return to work in the future are quite slim, though we do hope she will make a recovery, as part of her illness is stress related, the stress of this debt is contributing to her remaining ill.
What I want to know is how best to approach the debt company to make an offer to pay off the debt, having heard that sometimes these companies will clear a debt of this sort with a payment of 10%.
When I contacted them about this stating I was willing to take out a £2000 loan to offer to buy them out I was told I could apply for this in writing but would need a Doctors letter, as well as a letter stating I had been offered a loan of this amount. I was told that they would not consider an offer of loan off family but it had to be an official loan from a bank.

Has anyone got any experience/advice on doing this? Surely they'd rather get £2000 now, than be expecting a £1 a month for the next several years?

Thanks for reading, and I hope someone can give a few tips on what to say in the covering letter to the debt company!

KellsBells

rare_stuff wrote: »

Surely they'd rather get £2000 now, than be expecting a £1 a month for the next several years?

Yes, they would, or they would at least condsider it, all they are asking for is proof that you have got the funds arranged already.

However, are you sure that taking a loan out to pay further debt is the correct way to do things? The repayments on a £2,000 loan will be a lot higher that £1 a week, and if your partner is currently out of work, are you sure you can manage this??

I can only give my opinion, which in this case is until your partner returns to good health and returns to work, don't take out any further financial commitments. Paying £1 a week for the next couple of years is far better than £100+ a month for the next couple of years.

Cassa

May be worthwhile sending the following:

Mr A N Other
1 High Street,
Newtown,
Kent
R21 4RH
May 23, 2007
The Loan Company
Company House,
Church Street,
Newtown,
Kent,
R1 7HG
WITHOUT PREJUDICE:
Dear Sir/Madam
Re: 4563210025897412
We write with reference to the money which you are claming on the above account.
We can confirm that we are unable to offer to pay the money which we owe in full. .
However, I can raise £775 and I want to offer this an ex−gratia payment in full and final settlement of the
account. This offer is made on the clear understanding that, if accepted, neither you nor any associate
company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be
released for any liability.
We also request that, if accepted, you will make an entry on a credit reference agency file relating to the above
account as "satisfied" in full.
Payment can be made within 2 weeks of receiving your written agreement of this offer and method of
payment.
We look forward to receiving your reply.
Yours faithfully
Mr A N Other

If no joy, try asking them to write off the debt due to the circumstances?

More letter templates here:

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6

Coolmum66

Hi Rare-stuff

I too had debts with HSBC (they were really nasty - told me I had to default on my load before they would consider helping with a repayment plan) They were also paased onto Metropolitan. Again - they accepted £1 per week and froze the interest.

I think when I settled I got 10% off the outstanding amount and they mark your credit file as "satisfied" Unlike some companies they do not hassle you to increase your payment, so although it will take forever to clear your debt - is it worth taking on another loan and stressing over it?

Hope this helps!

rare_stuff

Thanks all for your advice.

Just wanted to clarify - although the company want to see a letter from a bank stating eligibility for a loan to make a full & final settlement, the loan will actually come from family so repayments may be a lot easier.
Also, due to the nature of my partners illness the stress of having this amount of debt hanging above her is actually contributing to her illness, even though MCS have been pretty good in regard to payments, it is still a factor that is hindering her recovery.
On the phone to them they did say the most they could discount was £1000, a little under 10% but I could write in detailing the case for consideration, which is what I intend to do in the hope they will accept 'jam today rather than bread tomorrow!'

I'll have a look at those letters and see if there are any more suitable or just get the idea to use on one I make up.

Also, HSBC were complete retards in dealing with this debt, though this was put into context by having dealt with a "debt management company" called spectrum financial services who took a large lump some and did effectively nothing, luckily got some legal advise on this and managed to get them to repay 2/3rds of the fee they had charged.

Thanks Again!

R.

Short_of_money_2

I have been with Spectrum Financial Services , (although i still don't know what service if any i have recieved).since Oct 2005, paid them £1300 and continue to pay them £25 a month, with £8 going to my Creditors.
I have now realised they have and are getting Money for doing Nothing. I have now decided to leave them and have cancelled the monthly D.Debit. Has anyone got any info on how i could try and at least get some of this Money back?, and how i should word a letter to them, i have tried to phone but as usual they are busy