Cap One/Fredrickson + other debts. What to do do next?

JamesC71

Have a defaulted credit card account with Cap One (£4200 balance) which I have not paid since around Feb 2015.
Usual story - business failure, loss of income for several months, currently on low income (£670 per month), etc, etc.

In Sept 2015 Cap One wrote to say the debt would now be handled by Credit Solutions, Purley.
Received letter from them. Informed them would deal only in writing. Offered token payment of £1 per month consistent with what I am paying all other CC creditors (who all accepted). No reply from CS.

In Nov 2015 Cap One wrote to say debt would now be handled by Fredrickson.
After a week of attempted phone contact (no answers obviously), have just received first letter from them, reasonably tame.

I'm unsure as to which way to go with this debt and all the other CCs etc.

Firstly I am not worried about protecting my credit rating here - it is shot already and no doubt will remain so for a few years no matter which route I take, so that is not a deciding factor here.
I also have no intentions of taking any credit again.

For the record my full list of debts are:

Post Office Credit Card £4500 *
HBOS C Card £2100 *
New Day C Card £2100 *
Barclaycard £3600 *
Virgin CC £3500 *
Capitol One CC £4200
Barclaycard £4900 *
Tesco Loan £1700 *
Argos Card £495. *
Santander Personal Guarantee (former Ltd co. bank account) £2450
Utility Warehouse £420

Of the above all marked * are on 3-month agreed token payments of £1 per month. This agreement expires Jan 2016.
Utility Warehouse have passed to Churchill Recovery, who have also been offered £1 per month but failed to respond to letter offering this (they just persist at phone attempts to contact, despite me requesting all contact in writing - they also threatened doorstep visit, my response was to inform them that they were not permitted to set foot on my pathway and if ignoring such an instruction they would be trespassing and police would be called - they have not shown up as yet).

A couple of debts have already been declared defaulted.

My income is presently £670 per month which doesn't even cover essentials, with my wife paying a greater share of these.
It is likely that this may increase to £1200-£1500pm, but this will not be until at least 6 months (building new business).

I'm kind of torn between the following courses of action.

1) In Jan 2016 offer all creditors a further £1 per month for 6 months. Then should income increase attempt to freeze interest and agree an affordable repayment plan - i.e. pay back honestly!

2) Go Bankrupt. Not ideal. My key objective through all this would be to retain family home. After mortgage, secured loan and secured bank OD, I have approx £20k of personal equity, which my wife could possibly purchase, though funding this would be a struggle. So while an immediate solution to the backlog of debts, still a bit of a chancer as far as the house goes.

3) Do nothing, let all accounts default and see what happens. I made my previous token payment offers prior to discovering this and other forums. I'm intrigued to have since read that so many debts are not followed through to court level once passed to a DCA and never get recovered / no action taken. Is it really THAT easy? Do the DCAs really just go away once they can see blood cannot be extracted from stone?


Any advice on which way to go with this collective of debts overall?

Also how should I handle the letter from Fred ref Cap One? Ignore? Make Token Offer? Other response?


Any help appreciated.

Cheers

Anthorn

That's new to me: In my own experience Fredrickson are the collectors for Lowell who buy debts.

No doubt others will offer advice but here's my tuppence worth: The inescapable fact is that they cannot have money you don't have although they will try. Do they expect you to rob banks? What I did was submit to the collectors an income and expenditure statement showing the residual income I have available which at that time wasn't a lot. You need to quote everything, even haircuts and don't quote the price at a cheap barber either.

Again in my own experience, Frederickson were very good to deal with. They provided me with a payment card to use for free at paypoint and a login for their online service. They also queried my stated residual income and reduced it during a telephone income and expenditure statement. It's a shame all collectors are not like Frederickson.

Lastly, you owe the money and you have to pay it back according to your means.

JamesC71

Thanks for your help.

slink85

sell whatever you spent the 25k on?

chanz4

Is the utility warehouse your current electric and gas provider, if they are expect pre-payment meters soon

Westminster

From my own experience, I would be prioritising the process of getting all these accounts to be defaulted ASAP (seeing as your CRA files are shot already) and defaults will limit your future exposure to this adverse history.

Some creditors will not default you unless forced - my sceptical nature believes that this is because they are aware of the 6 year limit once defaulted and want to 'keep you keen to repay' for as long as possible by not defaulting the accounts so they remain visible for 6 years from when you settle (i.e. when your finances finally improve) rather than when your finances first deteriorate.

The difference can be many many years.

Anthorn

Westminster wrote: »

From my own experience, I would be prioritising the process of getting all these accounts to be defaulted ASAP (seeing as your CRA files are shot already) and defaults will limit your future exposure to this adverse history.

Some creditors will not default you unless forced - my sceptical nature believes that this is because they are aware of the 6 year limit once defaulted and want to 'keep you keen to repay' for as long as possible by not defaulting the accounts so they remain visible for 6 years from when you settle (i.e. when your finances finally improve) rather than when your finances first deteriorate.

The difference can be many many years.

That was not my experience. A little background info here: In 2007/2008 the banks went down, my employer went down, I was made redundant and only received statutory redundancy pay and could not find a new job due to employers in the electronics industry moving to India and Poland previously. To cut a long story short I was disowned financially. The big surprise was Alliance &Leicester which not only kept my account going but provided me with a £250 overdraft facility. Hey when your income reduces to 66 quid a week you need all the help you can get.

So based on my experience I'd say expect the worst. They will demand immediate repayment of the full amount you owe and then compromise with demands of hefty regular repayments you just don't have. Then they will sell the accounts and the new owner of your debts will be more reasonable and. will work with you to find a compromise. There is a light at the end of the tunnel.