Barclays debt ultimatum: close account and default or make higher monthly payments

SpongebobsMum

Hi,

I owe Barclays some money and it's considerably more than I can settle in one go.

Barclays contacted me
They have contacted me to say that I can close the account, receive a default but be able to pay off the debt at far lower repayments, or I can keep the account open and pay them back at at least £40 a month.

Confused
Something confused me and rang alarm bells, they seemed to suggest that I should ask Debt Management companies, two of whom I have other accounts with, whether they would be willing to buy the debt from Barclays.

Questions
I don't want to incur a default notice (?or account closure notice?) But I cannot afford to pay Barclays back at £40 a month at present.

1. is there a benefit for me in closing this account?
2. can Barclays force me to make higher payments than I can afford?
3. if not, presumably though, they could seek to sell the account themselves, are they allowed to sell the account if I am making the payments I can afford?

Many thanks,

Becca

SpongebobsMum

p.s. I'm a full time student at university. That's how I got the debt and that's why I'm unable to pay it at present.

sourcrates

Hi Becca,


You should steer well clear of debt management companies, they are bad news, and charge you fees, I don't know what Barclays have been telling you, but you cannot instruct a DMC to buy a debt, they don't buy debts, they manage them.


Are you thinking of a Debt collection agency perhaps ?


Even then, you cannot instigate the sale of anything, only the creditor can do that.


With regard to the debt itself, if you cant afford what the bank are asking you to pay, just pay what you can afford, although you may not be able to avoid been defaulted unfortunately.


If there not happy with that, they will just sell the debt on.
In your situation, you wont be able to avoid negative info on your credit file.

timefortea

Have you asked your university for help? Most have a hardship fund, and they may be able to give you some extra money if you're struggling.

SpongebobsMum

timefortea wrote: »

Have you asked your university for help? Most have a hardship fund, and they may be able to give you some extra money if you're struggling.

thank you! i didn't think about that. I will ask them.

SpongebobsMum

Hi Sourcrates,

>> Even then, you cannot instigate the sale of anything, only the creditor can do that.


Yes, this is why I thought it was a very unusual thing to say. The advice they seemed to be given me was, 'call the debt collection companies you have accounts with and ask them to consider buying the barclays account'.

Perhaps he was just trying to be over helpful, im not sure.


- You think, even if I pay Barclays what they want, I'll still receive negative info on my credit file?

I think I can probably afford to pay them £50 a month. But is it really my best option at this stage? Why can't they accept lower? In debt collection it would be lower?

thanks, Becca x

KirstyO

Becca,


If they are at the point of offering account closure as an option on a debt, the chances are the damage is already done on your credit file. If you were to force them to default the account NOW then this would drop off in 6 years time. If you try and appease them say for another year or 2, then defaulted, you've only continued to trash your credit record, and you'll have the extra time for the default to drop off.


In the world of debt that this forum sees, defaults are often seen as a good thing, as it draws a line for people to rebuild from, and is infinitely preferable to a CCJ or bankruptcy in terms of affecting credit files.


However if you can reasonably, and sustainably, prevent them from defaulting at all then that is clearly the way to go. As long as you're sure that you aren't just delaying the default. If the account was to remain open with no default, the info that shows on your credit records would indicate which months you were in arrears, and what stage these arrears were at.


Kirsty