Advice appreciated re my bank debt

missgone

I shall take time to have a look at the other threads here for info however I just wondered if someone could give me a bit of guidance.

I have a total debt of approx £30k and am currently not working (gulp!). Most of this debt is with Abbey (£23k fixed term loan which over 3 years amounts to £28k. (I have paid some of this off already before losing my job). I have considered bankruptcy although I have an emotional barrier against this because I equate it as a personal failure to get to grips with my financial responsibilities. So I contacted CCCS a few weeks ago who prepared a budget summary and list of creditors for me to present to my various creditors, which I did.

I phoned Abbey Collections dept re the loan today to check the status on this and they said the weren't prepared to accept my proposal to pay £1 a month until I find work again. They said I needed to go back to CCCS and get them to deal with everything for me. (I have left a message with the person who dealt with me at CCCS who I hope will contact me after the Bank holiday).

My question is can a bank force you to pay the original monthly balance (which was £785 - an amount which I was able to afford prior to becoming unemployed)? Or are they just using bullying tactics and are not legally able of taking this money from you?

The rug has been well and truly pulled out from under my feet and the moment I feel I've been proactive in trying to sort things out, I am faced with another hurdle. I am beginning to wonder whether bankruptcy may be the best option.

I know my lack of employment cannot continue in the long term (for self esteem reasons apart from anything else), I have had emotional problems anyway for the last year (depression) which have probably affected my motivation and enthusiasm, but it would be nice if I could just take a break from all this just for a little while without banks breathing down your neck demanding payment.

I also know that I'm the one who got myself in this mess and I'm the only one who can get me out of it.

Many thanks for listening and any input would be appreciated.

gravitytolls

I think pretty much all financial institutions refuse the token payment of £1, and yes they do try to scare you.

At this stage, all you can do is continue to make your monthly token paments, until your benefits are sorted, and both you and your advisor know exactly what's going in and out, to make a reasonable offer of payment that you can meet.

You will receive letters and phone calls for some considerable time, you will find yourself repeating your circumstances over and over.

I know things look dire now, but if you follow the advice of the CCCS and let them help you, things will improve. In the meantime, if you leave your SOA here, there are lots of people who will be able to help you increase your payments by making small changes to your life.

One other thing ~ depression is a real illness, and if you were suffering from depression before losing your job, now you are unemployed and struggling with finances, this situation may feel worse. Trust the CCCS to do their job, they know their stuff, but trust your GP with your health, they know their stuff too.

missgone

Thanks gravitytolls, that's really helpful.

(sometimes it does wonders just to share - it's easily to feel isolated when you're in dire straits!)

Thank you again.

Conor_3

missgone wrote: »

My question is can a bank force you to pay the original monthly balance (which was £785 - an amount which I was able to afford prior to becoming unemployed)?

In short, yes. You signed a contract with them.

They also don't have to take notice of CCCS or similar either although most do as they realise they're better having something than nothing.

fermi

missgone wrote: »

My question is can a bank force you to pay the original monthly balance (which was £785 - an amount which I was able to afford prior to becoming unemployed)? Or are they just using bullying tactics and are not legally able of taking this money from you?

If they are insisting that you pay something you cannot afford then they are trying to intimidate and mislead you. In order to take legal steps to recover the debt they must first end the contract by defaulting the account.

Once this is done the OFT guidelines on debt collection apply.

Guidance for debt collectors on how to deal fairly with debtors. Aimed at all consumer credit licence holders and applicants and applies to collection of debt once an account is in default
Debt collection guidance (pdf 117 kb)

Which in particular say:

2.6 Examples of unfair practices are as follows:

a. ....
b. ....
.....
f. pressurising debtors to pay in full, in unreasonably large instalments,
or to increase payments when they are unable to do so

etc

DEBTMONKEY1A

Hi! I know you feel this 'emotional barrier' but honestly, if you've had/or got advice from CCCS & ot/payplan/CAB, & it's an option they suggest-DO IT!

I felt exactly the same as you did about the 'failure' bit-once you've gone BR the Official Receiver deals with your debts-you don't have to any more & you'll be DEBT FREE. If you are not earning you won't have to pay ANYTHING back to the OR (you just meed the BR fees) & in all honesty you'd probably be discharged early-6 months approx. seems to be the norm.

Then you have a whole new life ahead of you. I too was depressed before-beleive me that go's as soon as you become BR! 2 months doqn the line now for me-no letters/phone calls-all sorted & I feel great!

If you start offering token payments via CCCS the debt will take years & years to clear & they'll always be after you for more/to increase the monthly ammount.

What price your own mental health?? S*d the 'failure' bit-you have NOT failed-you've taken an option that's available to you.

I would look at doing it asap (assuming of course you've had all the advice)-if your'e not earning the Court fee (approx £150) will be waived-the BR fees are approx £350. I'd look at geting this money by hock or by crook!

Oh...ignore conner. DOn't know why he is so insensitive. They CAN'T force you to pay the monthly rate-sure-they can take you to county court (so what!!) but the court will only let you pay what you can afford-if it's £1 then that will be it.

Let us know how you get on!

debt_doctor

Missgone, I am a debt case worker for theCAB. Bankruptcy seemsto be 'perfect 'for you. I understand the emotional thoughts but you have to look after your self. Give yourself peace of mind asap.

It will cost you £ 335 ( court fee not applicable ) and you will not have to pay anything to an IPA . WHY LET THINGS DRAG ON FOR YEARS - GET THE PROTECTION OF THE COURTS NOW !!

Good luck