Debt management - advice

playlister82

Hi everyone,

new poster here. I'm posting this on behalf of my mother who doesn't use internet forums. Advice is needed on what to do about a debt management plan and I'm quite worried on her behalf. To cut a long story short, she took a loan out of £20k with the Natwest about ten years ago. After a couple of years I'm not 100% sure what happened, but I think she defaulted or got into some difficulty with repayments, and it ended up with a debt management company. Since then she's been paying back around £150 a month to various of these companies - every couple of years they seem to change and the debt gets passed onto a new one, and she's had to arrange new plans with new companies several times.

This week it's been passed on again to another company called Money Plus Group. They appear to want to up her monthly payments to £500, which is quite a worry as she was paying £150 up until now and can't afford such a large increase.

My main questions are as follows:

1) Does she have to pay Money Plus Group what they're asking or is she allowed to negotiate an amount that she feels comfortable with?
2) Is there a way of doing away with these companies altogether and just going direct to Natwest to arrange repayments? Or is a debt management plan with a specific company legally binding?
3) Has anyone had any experience with Money Plus Group and how helpful are they?

I'm aware that debt management companies pay a minimal amount to creditors and that most of their fees go straight into their pockets, which is why it would be a relief to know whether cutting them out of the equation is possible. My mother seems willing to do this but doesn't really know where to go for advice, and I unfortunately don't know a lot on the subject either.

sourcrates

Hi,

First off let's call them there correct title, they are debt collection agency's, (DCA) not debt management companies (DMC) two entirely different animals.
I would assume Natwest have not sold this debt if so many DCA's have been doing the rounds with it, what does it say in the paperwork, do they say they have bought the debt, or do they refer to "our client" ?

Anyway, 10 years is a long time, she dosent have to pay any more than she can afford to pay, a DCA has no power to enforce payments except by use of the legal system, and a judge would not set payments that were not affordable, they know that, they are trying it on basically.

No agreement with a DCA is legally binding.

She should just write to these chancers, tell them she will continue to pay the £150, and to take it or leave it.

Now, one more thing you should do for her, make a section 77/79 request for information (CCA request) to the creditor writing to you.
Lots of info on that here, fact sheet 39 from national Debtline :

https://www.nationaldebtline.org/EW/factsheets/Pages/gettinginformationfromyourcreditors/creditagreementadvice.aspx

If the creditor can't supply what there supposed to, the account may become unenforcable and she may not have to pay it.

Do some research on the process first, any questions, just ask.

playlister82

Hi sourcrates,

Thanks for your advice and thank you for clarifying the terminology, I wasn't sure of it. I don't think Natwest have sold the debt as statements show that a proportion of the monthly payments are still going to them. It doesn't refer to 'our client' in any of the letters. Out of interest, what would the case be if they were a DMC and not a DCA? Would it be much worse?

I had a feeling she was only bound to pay what she can afford and no more, I guess I just panicked and wanted confirmation. It makes you wonder, how the people who work for these companies can sleep at night, putting people through this! Indeed, how is it fair that they get to keep £9 out of every £10 that customers pay them? Is it because she defaulted on the loan and the law just says "tough luck"?

I may be in a better position to pay this off than her. If so I guess I could make that information request to find out the total amount and step in to pay it off. If I decided to do that would the company have to accept it or could they turn around and slap some dodgy charge on top to discourage early payment? Going back to my original question, how easy is it to get these companies out of the picture?

sourcrates

Hi,

Failure to comply with a CCA request can make a debt unenforcable in court, that would get them out of the picture permanently. it's unlikely they will have the paperwork from 10 years ago, but you won't know until you make the request.

Debt collectors try to collect on delinquent accounts, debt management companies manage people's accounts for a fee, two completely different things.

Once an account defaults, no one can add any further charges or interest to it, unless the original agreement allows them to do so, 99% don't allow this.

Have you read the national Debtline fact sheet ?
Get the CCA request sent off ASAP.

fatbelly

Money Plus are a DMC, and a fee-charging one.

The only ones we recommend on these boards are stepchange and payplan, who are fee-free

Money Plus charge

An arrangement fee which is spread evenly over the first six months of the plan. This fee varies according to the customer’s needs, but will be confirmed in writing on your initial paperwork. (nice and vague)

A monthly management fee of 17.5% of your monthly payments, subject to a minimum payment of £30 for disposable incomes of £0–£100, and £35 for disposable incomes of £100.01–£200.00.

On £150 they will retain £35, and pass on £115.00, extending your repayment period by 30% or about an extra year for every 3 years with a fee-free dmc

If there's only one debt, you don't need a DMC - just go direct to the creditor and set up a repayment plan...if they can produce a valid cca (good idea from sourcrates)

sourcrates

fatbelly wrote: »

Money Plus are a DMC, and a fee-charging one.

The only ones we recommend on these boards are stepchange and payplan, who are fee-free

Money Plus charge


On £150 they will retain £35, and pass on £115.00, extending your repayment period by 30% or about an extra year for every 3 years with a fee-free dmc

If there's only one debt, you don't need a DMC - just go direct to the creditor and set up a repayment plan...if they can produce a valid cca (good idea from sourcrates)

I was slightly confused why the OP was talking about a DMC when there was only one debt.

I assumed they meant a DCA.

OP, How on earth did your mother get talked into using a fee charging company to send payments to just one account ?

fatbelly

sourcrates wrote: »

I
OP, How on earth did your mother get talked into using a fee charging company to send payments to just one account ?

They might have cold called.

Or maybe she saw an ad on a satellite channel or something.

It looks like [STRIKE]these sharks [/STRIKE]this company has also traded as

PDHL
Beterway
Chiltern Debt Solutions
The debt People
Debtfreeme
Easierdebt
Hamilton locke

Anyway, the advice to do a dmp on ONE debt was clearly wrong so, given the attitude of the FCA now to this sort of thing, I think a claim for all fees to be refunded might be interesting.

8 years @ £35 per month, with 8% statutory interest rolling up... probably enough to do a full & final settlement with Nat west and have some money over.

sourcrates

fatbelly wrote: »

Anyway, the advice to do a dmp on ONE debt was clearly wrong so, given the attitude of the FCA now to this sort of thing, I think a claim for all fees to be refunded might be interesting.

8 years @ £35 per month, with 8% statutory interest rolling up... probably enough to do a full & final settlement with Nat west and have some money over.

Good point, I'd second that.

Shocking example of taking advantage of someone in debt.

playlister82

Thanks all. I too was confused as their website would suggest they are a DMP rather than DCA.

I think originally she was worried about the cost of the debt, saw an advert online for this company that claimed it could help to reduce costs, and ended up going over to them. No point in regret after the fact I guess, but I do feel that she's been taken advantage of and its quite angering if you think about it too much.

My next step is to do this CCA then - can I do it on her behalf or does she have to request it herself? Only problem is she's quite reluctant to accept any help from me (mother's pride etc) so I am wondering if it comes to it could I just step in, pay off the debt and give it closure without her cooperation?

sourcrates

playlister82 wrote: »

Thanks all. I too was confused as their website would suggest they are a DMP rather than DCA.

I think originally she was worried about the cost of the debt, saw an advert online for this company that claimed it could help to reduce costs, and ended up going over to them. No point in regret after the fact I guess, but I do feel that she's been taken advantage of and its quite angering if you think about it too much.

My next step is to do this CCA then - can I do it on her behalf or does she have to request it herself? Only problem is she's quite reluctant to accept any help from me (mother's pride etc) so I am wondering if it comes to it could I just step in, pay off the debt and give it closure without her cooperation?

Well yes you can, but why should these people get away with acting like they have.
They have taken advantage in order to profit from your mother, I wouldn't stand for that !!!

In order to do the CCA request, just print off the template letter from the national Debtline website, all you need is the account reference number, and the creditor address, enclose the £1 statutory fee, you can do that yourself I would assume ?

Next, stop paying these vultures straight away, cancel the payment, tell them they are no longer needed.
Also send a written complaint to them telling them they have taken advantage of a vulnerable person, a DMP is never a suitable option when you have only one debt, especially when that company charge a monthly fee !!!!!
The regulator, the FSA frowns on such practices.

Ask for a refund of all fees paid, plus statutory interest at 8% added to the total, otherwise you will escalate your complaint to the financial ombudsman service.

Get a little payback for your mother !!!

playlister82

Thanks, so we can just stop paying them and tell them where to get off? We don't need to pay any further fees or charges?

They've clearly made it sound like she has to pay them £500 a month and got her worried, it's sickening really and I do intend to complain.