QuickQuid, Wonga, Mr.Lender Debts

badatmaths

Hi

I need some advice regarding the debt that I have piled on. The breakdown is as follows:

Wonga - £300 borrowed - was due 29 May.14 £418.50 (current balance £468.30)

Quickquid - £500 borrowed - was due 01/06/2014 (current balance£622.62-- I have cancelled their DD

Mr Lender - £250 borrowed - one extension - was due on 28 May.14 -Current Balance £397.50

FLM Quick - £500 borrowed by a friend (me as a guarantor) - monthly installments of 53.50 - £271.27 settlement amount as of 04/06/14

Very catalogue - Limit was £500- Current Balance £505.40

Aqua - Limit was £250 - Current Balance £279.40

I have sent them an email mentioning that I am struggling financially. And I do want to repay the loans but need to set up a payment plan that I can stick to.

Mr. Lender have got back with the below response:

"We would like to help you get your account back on track via a repayment plan, however we would need the initial token payment of £87.50.
We can then split the remaining balance over 6months at £51.67 a month.
Please confirm when this payment will be received, as until then your account will remain in collections incurring calls and late fees."

I cannot afford the initial 87.50 and also 51.67 each month either as I have got other debts listed here apart from monthly rent, bills, food, travel costs.

I am working full time but finding it difficult to get out of this mess. I was one of those people who used to stop others getting into this payday cycles. But here I am today.

I would greatly appreciate the help. Thanks

Monkeyballs

Hi BaM,

First thing is that if you approach your creditors without providing an Income & Expenditure form then they will do exactly what Mr Lender has done and offer a repayment plan which is "affordable" or more so than doing it all in one go but obviously they have no idea of your other debts...

Looking at what you have I would be thinking of going down the DMP route because in total that's about £2.5k give or take which at say £200 pcm (hard to say without your fiances) that'd take about a year and a bit to clear

You could go self managed or (as I'd advise) contact a debt charity such as Step Change.

Either way, you need to be looking at cancelling CPA on your PDL's anyway

MB

30_something

badatmaths wrote: »

I am working full time but finding it difficult to get out of this mess. I was one of those people who used to stop others getting into this payday cycles. But here I am today.

I would greatly appreciate the help. Thanks

I'm in exactly the same position. I help others get out of payday cycles (they're usually already in deep when I see them!), yet during a long spell off work sick I turned to them myself thinking I'd pay them back quickly. Wrong.

I've now contacted them (and other non-payday firm creditors) with a financial statement I drew up myself. All of the creditors, including wonga and quickquid were actually very helpful and payment plans are in place. According to my financial statement it'll take over 14 years to pay off :eek:
. The great thing is though, I now have money for essentials such as food/clothing which I didn't when I was in that payday loan cycle, and there's no longer any interest being added.

Although I did it myself, I would second the recommendation of approaching a charity such as Stepchange or CAB for help.

Well done for looking for help with this now :T

badatmaths

Thank you MB and 30 something. I have finally accepted that I need to go down the DMP route.:mad: Is it frowned upon? I am asking because when I tried to open a new bank account last month I was asked if I am in any Debt Management Plan or Bankrupt. At that time the answer was no. But it got me thinking is it something that would be visible on my Credit Report, obtaining credit in future? I want to get my own flat in the future and by that I mean in a year or two (private renting at the moment). Also is approaching those charities quicker and less hassle or dealing with it by myself? If I do it myself I am gonna have to get help from here regarding which forms to send and how to get my point across etc. which I have not got any problem with as long as I have some guidance.
I want the interest to freeze on my debts. I came across a thread a few weeks ago, there was a template letter I think to send to your creditors. Anybody got any advice on this? Thanks again

Powered_By_Pies

I'm in the same boat but a couple of months ahead of you, so I'll give you the advice I used:

Contact step change tomorrow. First thing. Don't be embarrassed about a DMP or think it's frowned upon, it isn't. I don't know which bank asked you that question but for a basic no-frills account with no access to overdraft shouldn't be hard to open.

Step change will go through a full statement of affairs with you so have the list of debts and the most current amounts you owe to hand. They'll draw up a DMP proposal and you can then hit the 'go' button. They'll then start contacting the creditors for you to let them know you're entering a DMP.

Wonga have been fine with me and only contacted me once. Step change will give you a reference and contact number to give to your creditors - when they phone up, provide them with those details and they should freeze the account and await further information from SC.

QuickQuid have, as far as I know, accepted my DMP without issue. They haven't even contacted me about it, they're just talking to my DMP provider. A lot of these pay day lenders had a rocket up their chuffs a couple of years ago and have since buckled their belts and are more for working with the debtor, not against them.

Step change will effectively confirm a set amount per month that you pay them via direct debit, which will then be divided between the creditors equally. I can't make any comment on whether interest on all accounts will be frozen - some will freeze outright, some will reduce accordingly so the monthly payment still clears a small chunk of the capital as well as a bit of interest.

Once step change have confirmed the DMP is ready to go, contact your bank and request Any CPA (Card Payment Authority) is blocked against the pay day lenders, so they don't pilage your account on the next pay day. Keep an eye on your account on payday as some will try and work around it - if they do, call the bank immediately and ask for the payment to be disputed and they should refund it.

Your payments will then start to the DMP and the ball will be rolling. Creditors will still be able to contact you, but I don't see anyone on your list bar Mr Lender who I don't know anything about who will get harsh or nasty. Most will just accept it and then let it run until the 6 or 12 month review comes up.

It's imperative you contact step change - or any other debt charity like Pay plan - as soon as you can
You will feel 1000% better once that first call is done. I guarantee it.

Good luck.

Kate_fixing_it

A DMP isn't frowned upon as such as it's an informal agreement to pay but if you are going to be paying less than the contracted payments your credit rating is going to take a hit.

Chances are that with multiple payday loans on your file is going to make any mortgage company run a mile. It shows (in their eyes) that you struggle to manage your finances. Also, how are you going to get hold of a deposit? You're going to need at least £10k and (sorry to be blunt) you are struggling with £2.5k of debt.

The good news is that these entries (and ensuing defaults) will be off your file in 6 years - going by MB's example 4 years after this will be paid giving you a chance to save a deposit. I'm not saying that getting on the property ladder in two years is impossible but it's highly unlikely.

Sorry, I know this isn't what you want to hear.

Kate x

Powered_By_Pies

To echo Kate's post, your credit file is likely to be ruined as it is if you've been paying and re-loaning the money to the likes of Wonga. Mine looks abysmal, so a DMP still made sense to me as it means instead of trying to keep my head above water but not doing a very good job and stretching the cycle of payday loans even further, my creditors will now be issuing defaults - as yours will - which will then fall off your record in 6 years. Gives you enough timentobget everything back in order and start putting some money away for a deposit.

There's no immediate fix you can perform on your credit file. All you can do now is haltbthe elongation and use now as a point to start working frugally towards getting it mended in the long term.

Monkeyballs

Yup, as mentioned above if you don't have a deposit then you need time to save anyway...

When you enter into the DMP then the likelihood is that your creditors will default your account which obviously looks bad and it's unlikely that you'll be able to get a mortgage while they are on your file but after 6 years they're no longer visible...

As for whether or not it can affect you opening a bank account? Yes, most banks won't offer an account while you're on a DMP (unless they provide basic accounts such as Barclays, Nationwide or the Cooperative... You certainly won't be able to get one of those £100 for transferring deals (I know, I tried LOL).

The other option I guess is to approach them and get them to agree to an informal arrangement yourself but I suspect you'll be defaulted on one or more anyway I'm afraid unless you can find some benefactor to pay them off or maybe you can get a bank loan at a reasonable rate of interest to cover them?

As for going it alone Vs. using a charity? If you feel confident then go for it! There are various threads (this is a good one: https://forums.moneysavingexpert.com/discussion/4896875) which include links to useful info including templates but personally I went the Step Change route and have nothing but praise for them even if I do intend to go self managed somewhere down the line

Good luck,

MB

thewhiteavenger

Don't worry about the effect a dmp will have on your credit file - with that many payday loans showing, it wasn't looking good anyway.


The banks all have a 'basic bank account' - see this article.


http://www.moneysavingexpert.com/banking/basic-bank-accounts?_ga=1.140101754.874221339.1402029137

sourcrates

30_something wrote: »

According to my financial statement it'll take over 14 years to pay off :eek:

This seems an awfully long time, have you perhaps considered an Individual Voluntary Arrangement instead ?
That usually lasts only 5 years, or 6 at most, or even a debt relief order, I know you say you now have money for things but sticking to this budget for that amount of time is nigh on impossible.

30_something

Thanks Sourcrates. To be honest although the financial statement says 14 years, I actually expect to clear it in less than 2 years. The payment offers to creditors have been low (more like token offers really) in order to give me some breathing space and get back on top of my finances now that I've returned to work. I'm getting a good pay-rise next month so I'll be throwing a lot of that at the debt to start with too.

I'm not going to be on an overly restricted budget by any means; in fact I'm a saddo who's looking forward to the challenge of playing with my spreadsheets and paying it off ASAP :rotfl: