Debtors ignoring my SOA

fiveyearplan

I wrote to all my credit card companies in late May this year with the Debtplan template that I got from this site. Only 2 of them have agreed to my payment offer the rest ignored the fact that I had written. MBNA have been the worst although John Lewis is not far behind (RBS and GE Capital accepted my plan for a 3-6 month period which is what I asked for). When MBNA or John Lewis phone they initially demand payment then when I go on to explain I have written to them they finally acknowledge receipt but ignore the fact that I am in financial difficulty then ask what I can repay. As I can only afford £5.00 each they say this is not acceptable and want nearly the whole monthly payment now. John Lewis have now started default procedures for my £800 debt and MBNA are threatening to do so very soon. I've been to the CAB and they say they will write the same letter I have already written but on their headed paper. The only problem is since it is summer and they are all volunteers this could take weeks which will be too late. I have all my priority debts up to date. I'm self employed and my business isn't expected to pick up until mid September because of clients on holiday etc. What is the procedure and how bad is defaulting on these debts? I just have no way of paying them at this time.

SOA
John Lewis £800
MBNA £18,000 over 3 cards (2 in my name 1 in husband's)
RBS £3000
RBS £3000
Monument £3000
Barclaycard £3000
GE Capital £1400 (2 store cards)
Barclayloan £19,900

I cannot remortgage because I'm already up to the limit

HELP!!

CCCS_Emily

Hello fiveyearplan,

Sorry to hear about the trouble you're having with your creditors.

You are doing the right thing by providing a SOA to back up your payment. Creditors have to take any money you send them towards clearing your debt whether they have agreed to the amount or not, however, making reduced payments will start the collections process.

Creditors have to send you a default notice when you have broken your side of the contract, which you will have done by making reduced payments. You do not need to do anything with default notices, but they will be a matter of course while you cannot afford to pay your creditors the amount they want. Defualt notices go on your credit file for 6 years.

Once they have sent a default notice they can pass your debt onto a debt collection agency. Debt collection agenies are not bailiffs and all you need to do is make sure you send a SOA to them and start paying them instead of the origional creditor. So it is important you keep on top of your post so you know who is collecting your debt.

As I cannot advise you via this forum you may benefit from talking to one of our debt counsellors. You can book an appointment on 0800 138 1111. They will help you put a financial statement together and discuss short term and longer term options.

Keep us posted.