Writing off debts

ashopper327

Hello,

When our joint income was reduced to just benefits, we came to agreements (with the help of the CAB) with all our creditors to repay our debts at the basic minimum of £1 per month.

We have been paying them since 2009 and changed the agreements to £1 in Feb 2011. All debts have been "assigned" to debt collection agencies, none are with the original creditors.

We are quite happy to continue paying at this rate (it's the only one we can afford), however it would take us over 30 years to completely clear all the debt.

My questions are -
a) are there any laws that would allow us to ask the debt collection agencies to write off a portion of our debt? (we are not under IVA and don't want to be)

b) If yes - how long should we continue to pay before we can ask them?

c) how would we go about this, are there any templates that cover this type of thing?

thank you

forgotmyname

There is no law to make them write the debt off. If you stop paying them and do not acknowledge the debts for 6 years and have no assets then you could go for statute barred.
The debt will still exist but they cannot take you to court after 6 years of non payment/acknowledgement.

They will keep trying to contact you though to get you to pay. Naughty ones may contact friends/neigbours to track you down. Not nice.
Then 5 years and 11 months down the line they could take you to court for the money.

IVA or Bankruptcy will make it go away sooner. But with the negatives to gp with them.

dancingfairy

If you have under 15,000 I think it is and do not own your own home then you may qualify for a debt reduction order( dro). If you owe more than this then you would have to consider bankruptcy. If you go bankrupt then you'd need to find the fees which are about 750 each I think? but you would qualify for some fee remission but you'd still have to pay a huge amount. If this wasn't possible you'd have to approach a charity to pay the fees for you.
Other than that continue to pay 1 pound per month or you could stop paying and wait to be taken to court (if they'd bother) or you can write and ask that the debt is written off due to circumstances but I don't know how successful you'd be I'm afraid.
df

happy_bunny_2

No legal way to write them off.

For cards and loans taken out pre April 2007, you can do a CCA request. They need the correctly formatted signed original to enforce in court. If they don't have it they can't legally make you pay, but can hassle you.

The above can also be used to negotiate reduced balance full and final offers.

What do teh debts show on your credit file? Defaulted, arrangement?

[Deleted User]

forgotmyname wrote: »

If you stop paying them and do not acknowledge the debts for 6 years and have no assets then you could go for statute barred.

Two points.

1. Whether you have assets or not, is irrelevant to whether a debt becomes SB.

2. You don't "go for statute barred". A debt automatically becomes SB, after the specified period of no acknowledgement or payment, and no CCJ.

As for writing off debts, the only way a credit has to to write off a debt, is on the death of the sole (or final) debtor *.

* Assuming said debtor leaves no estate.

fatbelly

happy_bunny wrote: »

No legal way to write them off.

For cards and loans taken out pre April 2007, you can do a CCA request. They need the correctly formatted signed original to enforce in court. If they don't have it they can't legally make you pay, but can hassle you.

The above can also be used to negotiate reduced balance full and final offers.

That's the only way to speed things up, short of an insolvency option.

On a 30-year plan, the choice between say 25% now in full & final settlement or £1 per month for 30 years should concentrate their minds.

You can always ask for a write off - National Debtline has a sample letter. Obviously you wouldn't try this if you are a homeowner or employed or have assets. The big lenders and the debt buyers are unlikely to agree as your account always has a sell-on value. A locally based creditor may be more sympathetic if this is genuinely a hopeless case and court action would not get them anywhere.

Dear Sir/Madam

Account No: 4563210025897412

Further to my/our recent letter, we enclose a copy of our budget summary which gives details of our present financial circumstances.

As you can see, our outgoings are more than our income and we are experiencing extreme financial hardship.

We would be very grateful if you would consider writing off the outstanding debt owing. We have always taken our financial responsibilities very seriously but unfortunately, our circumstances are so bad that we
cannot realistically maintain payments of any kind. Please take the following special information into account when making your decision.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

As you can see our situation is very unlikely to improve in the future and our continued high debt level may have a serious effect on our physical and mental wellbeing.

We would be grateful if you would seriously consider our request for the debt to be written off.

We look forward to hearing from you.

Yours faithfully

ashopper327

fatbelly wrote: »

That's the only way to speed things up, short of an insolvency option.

On a 30-year plan, the choice between say 25% now in full & final settlement or £1 per month for 30 years should concentrate their minds.

You can always ask for a write off - National Debtline has a sample letter. Obviously you wouldn't try this if you are a homeowner or employed or have assets. The big lenders and the debt buyers are unlikely to agree as your account always has a sell-on value. A locally based creditor may be more sympathetic if this is genuinely a hopeless case and court action would not get them anywhere.

Thank you for the sample letter. We wouldn't have enough funds to be able to provide even 1% now. However we have been paying now for 5 years so in effect we have paid about 20% of the original debt value.

We shall just continue to pay the £1 per month. It's no bother to us. We don't have savings, no assets, not working and only benefit income. No children either. The payments are automatically made via bank transfer so it's not inconvenient either.

Think we'll stick with just paying as our debts won't be passed onto anyone else once we're gone.

ashopper327

happy_bunny wrote: »

No legal way to write them off.

For cards and loans taken out pre April 2007, you can do a CCA request. They need the correctly formatted signed original to enforce in court. If they don't have it they can't legally make you pay, but can hassle you.

The above can also be used to negotiate reduced balance full and final offers.

What do teh debts show on your credit file? Defaulted, arrangement?

These debts no longer appear on our credit file. The default dates are over six years ago and these were removed from our credit file within the last year.

Which is why we don't want to "rock the boat" by asking for them to write of the remainder of our debt - if it means they might treat this request as a new default and reapply the debt to our credit file (although how they could create a new default date, when we are still paying and haven't defaulted I'm not sure, but debt collection agencies seam to be a law unto themselves sometimes).

ashopper327

forgotmyname wrote: »

There is no law to make them write the debt off. If you stop paying them and do not acknowledge the debts for 6 years and have no assets then you could go for statute barred.
The debt will still exist but they cannot take you to court after 6 years of non payment/acknowledgement.

They will keep trying to contact you though to get you to pay. Naughty ones may contact friends/neigbours to track you down. Not nice.
Then 5 years and 11 months down the line they could take you to court for the money.

IVA or Bankruptcy will make it go away sooner. But with the negatives to gp with them.

Thank you for your response.

As we already have arrangements in place and they haven't chased us for any more than we arranged 2 years ago.

Any "legal" course of action such as IVA, DRO etc would just have negative impact on our credit file. We've only just started to recover our credit rating, as these debts no longer appear on our credit file (the default dates being over 6 years ago) - so they are not options we want to explore.

We don't want to rock the boat, but we were hoping that they might be a legal way to get them to write off the debt so we aren't paying for the next milleneum. Oh well paying til' 3013 it is then :-)

ashopper327

dancingfairy wrote: »

If you have under 15,000 I think it is and do not own your own home then you may qualify for a debt reduction order( dro). If you owe more than this then you would have to consider bankruptcy. If you go bankrupt then you'd need to find the fees which are about 750 each I think? but you would qualify for some fee remission but you'd still have to pay a huge amount. If this wasn't possible you'd have to approach a charity to pay the fees for you.
Other than that continue to pay 1 pound per month or you could stop paying and wait to be taken to court (if they'd bother) or you can write and ask that the debt is written off due to circumstances but I don't know how successful you'd be I'm afraid.
df

Thank you for your response.

As we already have arrangements in place and they haven't chased us for any more than we arranged 2 years ago.

Any "legal" course of action such as IVA, DRO etc would just have negative impact on our credit file. We've only just started to recover our credit rating, as these debts no longer appear on our credit file (the default dates being over 6 years ago) - so they are not options we want to explore.

We don't want to rock the boat, but we were hoping that they might be a legal way to get them to write off the debt so we aren't paying for the next milleneum. Oh well paying til' 3013 it is then :-)

happy_bunny_2

ashopper327 wrote: »

These debts no longer appear on our credit file. The default dates are over six years ago and these were removed from our credit file within the last year.

Which is why we don't want to "rock the boat" by asking for them to write of the remainder of our debt - if it means they might treat this request as a new default and reapply the debt to our credit file (although how they could create a new default date, when we are still paying and haven't defaulted I'm not sure, but debt collection agencies seam to be a law unto themselves sometimes).

You can legally only be defaulted once.

DCAs do change them sometimes, but it is possible yo get that corrected.

Good luck

HB