How to respond to Creditors Letters?

getmeouttahere

Hi all,

In an attempt to get our finances under control, my wife and I completed the Debt Remedy on the StepChange website. StepChange suggested a token payment plan so my wife and I wrote letters to all creditors enclosing the income/expenditure, list of other debts and asking them to look at our circumstances to see what assistance they can offer. We have had some responses and would like some advice on how to reply.

1. A couple of credits have replied saying they would like to talk to us over the phone. Can we refuse and insist on communicating in writing only? I have already had to change my phone number due to getting 10+ calls a day.

2. Vanquis have agreed to a £1 per month token payment plan, however, they are saying that the account will be closed upon completion of the repayment plan, which makes me think that they will mark the account as arrangement to pay rather than default. Can we insist that the creditors default the account rather than mark as arrangement to pay? If so, how do I word this?

3. Three mobile have responded saying that they will not discuss a repayment arrangement until StepChange contact them confirming they are acting on our behalf. I made no mention of StepChange acting on my behalf in my letter and the only reference made to StepChange was to say that the income/expenditure had been prepared by StepChange. Do I just re-write to Three asking them to read my letter properly this time,

We have 22 credit accounts between us so I'm starting to think it would be much easier to keep track of we let StepChange take over and we just pay StepChange but we are trying to manage it ourselves first.

mum2one

firstly stepchange is a debt free charity, so or every £1 you offer them, the creditiors get the full £1

When you sent saying stepchange and the budget the creditiors would assume that stepchange is taking your case over.

I've been with stepchange for 2 1/2yrs and it was the best thing I ever did. It tale a lot of the pressure off it all xx

sourcrates

Hi,
Yes you can insist on contact in writing only.

Vanquis are funny people to deal with, as they always insist an account is closed after repayment though any kind of debt plan.

Three mobile, again, are unlikely to keep your account open if your paying less than your airtime bills show you owe, with 22 separate accounts you may be better off allowing SC to deal with them for you, however, self management does have its advantages, it depends how much time and effort you are willing to put in.

You will need to write to each creditor insisting on contact in writing only, you could email, but a letter is better.

getmeouttahere

mum2one wrote: »

firstly stepchange is a debt free charity, so or every £1 you offer them, the creditiors get the full £1

When you sent saying stepchange and the budget the creditiors would assume that stepchange is taking your case over.

I've been with stepchange for 2 1/2yrs and it was the best thing I ever did. It tale a lot of the pressure off it all xx

Thanks. I will have one last go at writing to the creditors and see where that gets me. If that fails, I will hand it over to StepChange.

sourcrates wrote: »

Hi,
Yes you can insist on contact in writing only.

Vanquis are funny people to deal with, as they always insist an account is closed after repayment though any kind of debt plan.

Three mobile, again, are unlikely to keep your account open if your paying less than your airtime bills show you owe, with 22 separate accounts you may be better off allowing SC to deal with them for you, however, self management does have its advantages, it depends how much time and effort you are willing to put in.

You will need to write to each creditor insisting on contact in writing only, you could email, but a letter is better.

Thanks.

Any idea how I can push this with Vanquis? They have agreed to £1 per month which is obviously a default on the original agreement but if it goes down as an arrangement to pay, it will stay on my credit file for the next 90 years. Is it better to not pay Vanquis at all until they default the account? And then offer the £1 per month?

I am not interested in keeping the Vanquis or Three accounts, I just want them to show as defaulted on my credit file so that in 6 years I know they'll disappear from my credit file.

The reason I have wanted to self manage is because I can then pay more off as and when I can afford it.

sourcrates

90 years a bit of an exaggeration lol, but i know what you mean.
It would be better for you to have the default notice issued earlier, rather than later.
The way to achieve this is to withhold payment for a while, i assume you are aware of how the debt collection process usually works, as you seem pretty well clued up on it.

Self management can be the way to go, as you say, you can pay off smaller accounts as and when you choose, and it gives you more control over your affairs.

National_Debtline

Hi

Making token payments can work as a short term solution if you’re experiencing financial difficulties but it’s not ideal in the long term as the debt isn’t really going anywhere, although sometimes people find they don’t have any other options. If you anticipate being in a stronger financial position in future, perhaps through increase income or reduced outgoings, token offers can be effective until payments can be increased.

If you can’t see how you will ever be able to pay more it’s worth actually speaking to an adviser at StepChange or another free debt advice charity on whether there may be any alternative options such as insolvency. Of course, this will depend on your circumstances and may not be viable.

James
@natdebtline

getmeouttahere

National_Debtline wrote: »

Hi

Making token payments can work as a short term solution if you’re experiencing financia
l difficulties but it’s not ideal in the long term as the debt isn’t really going anywhere, although sometimes people find they don’t have any other options. If you anticipate being in a stronger financial position in future, perhaps through increase income or reduced outgoings, token offers can be effective until payments can be increased.

If you can’t see how you will ever be able to pay more it’s worth actually speaking to an adviser at StepChange or another free debt advice charity on whether there may be any alternative options such as insolvency. Of course, this will depend on your circumstances and may not be viable.

James
@natdebtline

Hi. Thanks for your post but it doesn't actually answer my questions does it? I've already spoke to StepChange and they don't feel it would be in my best interest to go down an insolvency route, etc.

Could you please advise on the issue with Vanquis? Would it be better to withhold payment until the account defaults as sourcrates suggested?

Thanks again

National_Debtline

I wasn’t sure whether you had only taken advice from StepChange’s online tool or actually spoke to an adviser so I wanted to make sure.

I agree that withholding payments to Vanquis should force their hand in marking your account as defaulted.

The ICO has guidance for when accounts should be marked as defaulted. Principle 4 states that default may be recorded if you fall into arrears or do not keep to the revised terms of an arrangement. It also says that a default should not be registered if an arrangement is reached jointly with the creditor and you keep to the terms of that arrangement.

If Vanquis have agreed to a £1 payment plan and you keep paying it they don’t appear to need to register a default according to the ICO guidance.

http://www.scoronline.co.uk/files/scor/high_level_prinicples_document_final.pdf

James
@natdebtline

getmeouttahere

National_Debtline wrote: »

I wasn’t sure whether you had only taken advice from StepChange’s online tool or actually spoke to an adviser so I wanted to make sure.

I agree that withholding payments to Vanquis should force their hand in marking your account as defaulted.

The ICO has guidance for when accounts should be marked as defaulted. Principle 4 states that default may be recorded if you fall into arrears or do not keep to the revised terms of an arrangement. It also says that a default should not be registered if an arrangement is reached jointly with the creditor and you keep to the terms of that arrangement.

If Vanquis have agreed to a £1 payment plan and you keep paying it they don’t appear to need to register a default according to the ICO guidance.

http://www.scoronline.co.uk/files/scor/high_level_prinicples_document_final.pdf

James
@natdebtline

Thanks for your advice. It seems like my best bet is to with-hold payment in that case, until the account is showing on my credit file as defaulted.

Would you agree?

Should I do this will all creditors?

National_Debtline

getmeouttahere wrote: »

Thanks for your advice. It seems like my best bet is to with-hold payment in that case, until the account is showing on my credit file as defaulted.

Would you agree?

Should I do this will all creditors?

As you particularly want Vanquis to mark the default on your credit file and they don’t seem to be doing so while you have a jointly agreed payment arrangement, yes, withholding payment temporarily seems like the best way to make them do so.

We generally advise that it’s good to be pro-active with paying creditors to show good-will, so you don’t necessarily need to do this with all of your other creditors unless you’re having the same issue you’ve had with Vanquis.


James
@natdebtline