£250 debt became £2700 owed!

Hollysastar

Hello, I am in a terrible situation. Pre-2004 I took out a Monument credit card with a £250 credit limit. I used and maintained the repayments. One day a purchase went through and it took me around £5 over my limit. Charges were applied and as I paid via DD I didn't realise. I was paying the monthly repayments often without opening the letters. Over-limit fees plus monthly interest were more than my monthly repayments which I continued to pay relentlessly. Once I'd realised I was building a huge debt despite maintaining monthly repayments I tried to call Monument but they were seemingly uncontactable via phone. I wrote to them and asked them to look into my case. I then received a letter saying they'd passed my debt to a collections company. I paid over £1500 on the £250 debt and the amount still owed was apparently over £1200. This was all due to the fees and interest being more than my DD monthly payments. I paid like this for years. I wrote and said as far as I was concerned the debt was unfair and I had more than repaid enough. I have had various debt collectors write to me over the years but I've ignored them all. I have now received a CCJ for the outstanding amount from Moriarty Law with £50 monthly repayments starting from just before Christmas. I can't pay this and really feel the whole case is completely ludicrous. I have retained most of the paper monthly statements from Monuments showing it was a £250 debt and the excessive charges and that I diligently met my monthly DD payments. They show how the debt was allowed to build. I feel like I have been set up to fail.

Hollysastar

I would really appreciate some advice on this. The CCJ states if I fail to meet the repayments my possessions may be seized. I have posted a letter to Moriarty Law and received no response except to progress with the CCJ case and emailed and attached another letter today explaining I cannot afford £50 monthly repayments and again, explaining it was a £250 debt and I've already paid £1500. The auto e-response says I can expect to wait up to 7 days for a reply. My repayment is due in 3 days. I don't want bailiffs turning up over Christmas.

Karonher

There are people who will be able to help more than me, but I doubt bailiffs will be involved yet.

If there is no CCJ - you don't make it clear as in one post it says you have one but the second one says they will progress with it you need to answer to that and try and prevent it. As for the amount to pay I am sure the courts decide that.

With regards to the paperwork, it may show it is just a £250 debt, but from what you have put about not opening letters, they may also show that you were not paying what you should have been for a period of time.

Hollysastar

Yes there is a CCJ. My second post was to explain the only response I have had from them was that they would be progressing with the case which they have now done and it has been issued.

I could not afford a solicitor and the court was too far away for me to travel to. The amount has been set by the court in my absence.

I was paying the monthy requested amount. On time. Every month. This was 14 years ago when banks and cards were happy to apply excessive charges to accrue debt. Despite me continually paying, the debt increased and I am now in this awful position.

Lanzarote1938

wonder if there was PPI on this. Might be worth checking via Resolver.

National_Debtline

Hi Hollysastar,


I understand your frustration in a situation like this, but unfortunately, it has gone further than being able to be resolved through a complaint. As a CCJ has been entered you must now deal with the matter through the courts and have two ways to deal with this. You can either apply to the court to vary the CCJ to request payments are set less than £50 per month as that is more affordable. Or you can apply to challenge the judgement through a set aside application. The later is the more complicated (and expensive) choice.

It sounds like you received the original claim forms and possibly even filed a defence as a hearing was scheduled. But, as you did not attend the hearing, for various reasons, the court will normally rule in favour of the claimant. If that is the case a set aside is unlikely to be entertained unless you have exceptional reasons for not going to the original hearing (i.e. a sudden bereavement) which I don't think is the case. It is £255 to file this application and if you are unsuccessful you can also incur legal costs of the other side, so it is not something to be done lightly.


Unfortunately, failure to comply with the payments set by the court can result in bailiff action. This would take time for the claimant to apply for (as you actually have to default first), so whether anything will happen before Christmas is hard to say. But you do need to be aware that county court bailiffs can only come inside your home if you let them in or if they find open or unlocked access. You will get 7 days written warning before they visit and if you receive this you should ensure your home is secured and any assets (like cars) hidden away from the house. The variation application can also be used to suspend the bailiffs, and it sounds like you need to do this sooner rather than later. Good luck,


Laura
@natdebtline

Hollysastar

Hi Laura,

Thank you for your reply. I can't afford the costs to pursue putting up a defence against the claim. I also can't afford the £50 a month repayments.

But because I can't afford those it looks like I am going to have to pay £2700 on a £250 debt.

Moriarty Law has not replied to me via post or email to discuss the situation including my explanation that I won't be able to pay the £50. This is due on the 23rd December.

Do my previous repayments of £1500 count for nothing? The debt was only £250.

Hollysastar

This was my letter I sent today. I would really appreciate any steps I could take. This is a Monument credit card pre-2004, notorious for applying excessive charges. How can it be acceptable to repay £2700 for a £250 debt? Please help.

Dear Moriarty Law,
I am writing in response to your previous correspondence. I have yet to receive a reply from you to my posted letter dated 17th November in which I explained that this was a debt for £250 [two hundred and fifty pounds] taken out over 14 years ago. I diligently/naïvely paid the minimum payment every month by direct debit to Monument, which over time amounted to me paying around £1500 for a £250 debt. The excessive fees caused me to build up a ludicrous amount owing despite maintaining regular monthly repayments and repaying the original debt many times over.
This is the reason why this account remains outstanding. I wrote to Monument and requested someone to look into my case. I informed them I believed I had far beyond repaid my debt and it was the unfair and excessive charges that had contributed to an amount still owed. I then received a reply saying my account had been passed to a collections company.
I have suffered from years of phone calls and threatening letters. I retained the majority of my monthly paper statements from Monument to prove how much I paid and demonstrate how the excessive charges were allowed to accrue on my account making it impossible for me to repay. I have years of these statements available to view, all showing the debt was £250 and all showing my repayments.
I am not in a position to make the £50 monthly repayments as instructed by the county court judgement you have instigated against me. I am self-employed and my income this month, for the entire month has been around £50. This would mean any repayment would have to come out of the child tax credits I receive for my 2 children and would leave me unable to pay my rent each month.
I have completed a Step-Change questionnaire which advised I file for bankruptcy. Can you please respond to this emailed letter and advise me what to do. It is my full intention to now refer this case to the financial ombudsman for consideration in which I will be requesting a repayment of the excessive fees, the closure of the debt and the removal of the county court judgement against me and all records associated with it from my credit file. I will upload and submit all the historical monthly statements I have to demonstrate how utterly unfair and immoral this case has been. The fact that I knew it was so wrong shows why I have kept the statements for so long.
I would appreciate your swift response.

fatbelly

You can't refer a case to FOS once it has been through court.

If stepchange have recommended bankruptcy then I assume you have substantial debts and so it may be best to put all this behind you and apply for bankruptcy.

However, I have many experiences of stepchange giving poor advice. You may wish to post a statement of affairs here and let us have a look at the whole picture.

Hollysastar

I would rather not file for bankruptcy. I have put repayment plans in place for other debts I owe and I'm managing them. The total debt owed excluding this ridiculous one is around £7000. I have no assets. Although I'm awaiting the results of 2 ppi reclaims. One is for around £1500 and the other £2500. I have an overdraft with Barclays of £2000 and I pay around £90 in charges per month on that. This is about 8% of my total monthly money going into the account including child payments. I really would like to pay off my overdraft should I receive any ppi refund so I can reduce this monthly fee asap. I am also looking to move into a council property shortly and need to carpet it, buy an oven and fridge and with no savings I had mentally planned to use some of the ppi money for that. So, I have no money leftover each month but have been almost managing on what I do have.

Until this. This CCJ will financially tip me over the edge and push me into bankruptcy which I didn't want to do.

I cannot understand how it's even acceptable for me to have to keep paying this debt.

I don't know where else I can go. It seems Moriarty Law are free to go ahead and do this because I can't afford to fight it.

enthusiasticsaver

Unfortunately you have left it too late to do anything except as Laura suggests. A negotiated lower payment or set aside which you say you cannot afford. The amount of the original debt is irrelevant now and there is a CCJ in place. I think you now need to approach the court to ask for a lower payment you can afford.