savings while paying DCA's?

AngryDog

I keep seeing posts about people being told to "pay £5 and save some money up to make a F&F offer", but surely if the person has for instance £200-£500 free each month, shouldnt they be paying that to the DCA instead? Or is this a case of pay the DCA little if your debt has defaulted etc, and you've more chance of an F&F working?

National_Debtline

AngryDog wrote: »

I keep seeing posts about people being told to "pay £5 and save some money up to make a F&F offer", but surely if the person has for instance £200-£500 free each month, shouldnt they be paying that to the DCA instead? Or is this a case of pay the DCA little if your debt has defaulted etc, and you've more chance of an F&F working?

Hello there,

The general process is that all available surplus income should be used to make offer of payment to the creditors. It's important to consider that a creditor is only likely to accept a payment of £5 per month if they can see via a financial statement that the offer is realistic. If they can see that someone has a higher surplus spare but are still offered only £5 per month it could lead to further action - potentially through the legal system.

There could be exceptions to this general rule, however. One example is where a creditor has not been able to provide information that has been requested through a formal information request under the Consumer Credit Act. If a creditor hasn't been able to prove that someone has entered into a credit agreement, for agreements entered into before the 6th April 2007, the agreement could be 'legally unenforceable'. In situations like this, it could be advisable to save up a small pot to offer in full & final settlement - although some people may prefer simply not to make payment until the request information has been furnished.

Best wishes,

David @ National Debtline.

AngryDog

Thanks David, that is what I thought, so it would appear that bad advice is being given. I myself was told not to send an SOA unless it shows that I can only pay so much, which reading between the lines would suggest that I was being told to lie? I am not sure how well this would go down with the DCA's!

National_Debtline

A creditor is only going to consider a lower payment and to freeze interest and charges if they have a supporting financial statement. It's standard procedure to send one. Some people may argue that only a court can order a financial statement to be disclosed, and whilst that is true it should be born in mind that a creditor isn't going to reduce a monthly instalment without justification for doing so.

- David.

AngryDog

Thanks David. I myself am paying a "nominal" amount each month to my creditors. I am hoping that I can get them to accept some settlement offers so that I can start to rebuild my credit slowly but it is hard going as you'd expect!