1st CREDIT ADDING INTREST

Amanda1985

I need some help My partner and me have aot of debt, and after deciding not to go with an IVA, I wrote to all of the companys and gave the a copy of our income and outgoings, and asked if they would accept a payment term, All have agreed and we have been paying them all every month.

Today we had a letter from 1st credit who are one of the people we pay for Barclays, They have sent us a statement showing what we have paid, But this month they have added £300 worth of interest on the account, which has take it up to more than what we started with?? So what we have paid off in the last 6month has been for nothing, as now the balance is more than it started with.

I didn't think once we are paying an agreed amount they could add interest onto the account? We will never pay this off, if they keep adding interest, and the balance is getting higher? it will never get paid off and we will owe more?.

Surly this cant be right? :mad::mad::mad:

Karonher

Did they all agree to stop interest?

This is from the Stepchange site.


Stopping interest and charges on a debt

Your creditors may agree to reduce or stop interest and charges if you’re in arrears and struggling to pay. The Lending Code, which most banks and card companies follow, says they should ‘consider’ doing this, but they don’t have to. Their decision may depend on the amount you owe, how long you’ve been in arrears and how much you’re now able to pay to the debt.

In practice, most creditors stop interest and charges once your debt has defaulted, or has been passed to a debt collection agency. It’s not common for charges on a debt to continue increasing over a long time.

Charges will stop with an IVA but they don't have to with a DMP or payment plan.

sourcrates

What kind of account was this OP ?

If it's a CCA regulated debt, such as a loan, credit card, or catalogue account, then they cannot add further interest or charges, however, if it was a bank account/overdraught, and the original agreement allowed for interest to be charged, then they can charge you further sums, you need to clarify what type of debt this is ?

With you mentioning Barclays, then I am assuming it was an overdraught, in which case you would need to get hold of a copy of the terms and conditions in force at the time you opened the account, to see what 3rd parties can charge interest wise on a defaulted account.

You also need clarification on what 1st credits role is here, i would say they had bought your debt, but it may be that they are just managing it for Barclays, you need to clarify this also.

You next move would then be a written complaint to 1st credit, stating you think adding further interest is unfair, as at present levels of payment, you will never be able to repay your indebtedness to them, remind them of the lending codes view on this, (Google is your friend here) and also there responsibility to treat debtors fairly.