How do I make offers to debt collection agencies?

animalhouse

DH and I have been in a debt management plan for 8 years, starting with debts of over £60000 (this included interest added to monies owing when they agreed to our setting up the dmp). We increased our payments each year and have at times really struggled to keep going (i regularly worked 40 hours a month overtime to ensure that we increased payments each year). Our monthly payments were £500 per month and we have never missed a payment. We now owe approx £18000.

At the end of November I moved to a new job, but just before I was due to start the new employer contacted me and said that the position was no longer available as they didn't have funding for the post. My old job had already been filled so I could not go back to my old employer.

I immediately contacted the dmp company who were great and have agreed that we make hugely reduced payments in the short term while I try and get a new job.

I am now on zero hours 'bank' contracts with two companies and estimate that my salary will be £4 - 500 each month which although not great, is better than unemployment benefit. I am looking for permanent work in the meantime.

So, our dmp payment will be just under half what it was.

OK sorry for the long post....here is the crux of my dilemma.

My uncle recently died and left me £8800, which has just been released to me. I want to use this money to make offers to our creditors to clear the debts.

I asked the dmp company to do this and they agreed but have said that the creditors will probably not agree as we have paid so much off so far. They also said that they could only ask for partial settlements and not make full and final offers.

The dmp company rep also said that I must pay the £8800 into the dmp account and that if the offers are not accepted then the dmp will still run.

I would like to contact the creditors directly, explaining our position and to make full and final offers.

I don't want to 'stiff' our creditors, but as most of them added extra interest to each sum owed at the start of the dmp, we have paid off much more than the original sums owed - one added almost £6000 to the debt when we entered the dmp for instance.

Do I have to use the dmp company to make offers? How do I approach the creditors?

Any advice would be greatly appreciated.

x

Stevie_Palimo

You do not need the DMP to do this and can take this into your own hands.

Simply contact all the collection agencies you owe money to and say that you are dealing with them directly and would like a full and final settlement offer sent to you in writing, Try and get each amount down by at least 25% but some will allow you to push even lower at around 50%.

Do this all in writing and state that the full and final settlement must be reflected upon the account and on your credit file to, Do not bother with the DMP here as they are chatting rubbish about having all the money in the account to start with as this is not on at all.

Stevie_Palimo

The ones that higher costs I'd push for a low offer of a F&F settlement to, Also make sure that once you contact all the creditors that you cancel the plan as well, They will probably try it on by saying that you need 1 to 2 months fee's prior to doing this, Check your paperwork but stand your ground with them.

animalhouse

Thank you.

MrsTinks

A couple of warning bells: DMP "company"? Please tell me this is a free charity and NOT a vulture taking a significant chunk of your payments for your debts each month???
F&F offers you are far better to negotiate directly yourself.

Separately - have you looked into potential compensation from the new employer? I assume they sent you an offer letter and possibly even a contract? I would seriously look into that!

Adding £6000 to the debt when you entered the DMP... that doesn't sound quite right... what on earth happened there?? and what was the DMP providers view on that?

animalhouse

The dmp company is a charity and don't charge. The creditor told us that the terms of our loan allowed them to add the interest to the debt and at that time we were more naive than we are now. Regarding compensation from the new employer - my field of employment is quite close knit and I feel that if I make trouble then it will effect my chances of getting a permanent contract.

I was thinking of contacting the debt collection companies that now own the debts and asking them about interest added and also possibly PPI. Of the debts that had interest applied, two were from egg and one was barclays.

I'm on the hunt for template letters now.

Thank you for your input.

sourcrates

Hi,

Numerous template letters here for you :

https://www.nationaldebtline.org/EW/sampleletters/Pages/default.aspx

Creditors can only add interest if the original agreement allows them to do so.

You should ask for copies of your agreements (CCA request) to check if that is the case or not.

Template for that here :

https://www.nationaldebtline.org/EW/sampleletters/Pages/Information-about-your-agreement-under-the-Consumer-Credit-Act-%28sole-name%29.aspx

MrsTinks

Phew on the DMP provider

Definitely look into the front loaded interest - the whole point of a DMP and defaulting is that they don't charge you interest - sneaky !!!!!!s

Think Ocean and Egg were prime offenders on this years ago so most definitely pursue this and PPI payments. You never know - this might be over sooner than you think!

National_Debtline

Hi

When you come to make full and final settlement offers you might find this factsheet useful. It includes a link to a sample letter you can use to make offers with. Make sure a creditor accepts your offer in writing before you make the payment. It's worth requesting the CCA agreements first though using the link from sourcrates.

www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

James
@natdebtline

fatbelly

Although your dmc is a 'charity' they seem to be not very keen on helping you settling this. I wonder if this is connected with them losing 3 years of rake-backs from the creditors. Surely not.

But as I often say, you're always influenced by how you're funded.

So definitely do this yourself with the resources outlined. This thread is also worth looking at. You are in a position to go to 50% as a settlement (start lower, say 30%) so this is perfectly feasible.