Eeeek last big mess!

jellebabe

Hi everyone, Ive taken on a 2nd job, Ive just about cleared all my little debts, just the odd bits & pieces now.

Just Blackhorse are leaving me in a mess. (although its my own fault in the first place)
Original Loan £2500
Payments to date £2128.42

These payments have been at a reduced rate of about £50 a month over 4 years, Ive never missed a payment.

Outstanding balance £3800 !!!!!! rang them for an explanation, its all interest charges.

What on earth am I going to do??

Thanks in advance for any help

Burlesque_Babe

hi jellybabe - why not pop up a SOA and we'll have a look to see if we can free up a few pounds here and there to help you increase your monthly payments.

jellebabe

I know I can up my monthly payments but I really object to now paying nearly 4k in interest, is that really wrong of me? should i just take the hit?

woohoo_postingid

I may be completely wrong but as I far as I know they are entitled to the interest. Obviously if the original repayment plan had been stuck to, there wouldn't have been as much interest as it is normally added daily and you would have cleared the debt some time ago.

You could try asking them for a settlement figure - ie if you pay it all off now, what amount would they let you do that for?

jellebabe

I dont have a lump sum to offer them unfortuantely, I know I got myself into this mess but seems really unfair! Im going to be in debt to them forever

patricia1066

I totally agree that £4000 interest is hard to pay, and hard for them to justify on a small capital sum and in two years. What is the APR of the loan?

Just a few thoughts - can you get a breakdown of the interest charges and the APR applied from Blackhorse.

Then say that you intend to challenge the charges as representing penalty charges, once the OFT lift their waiver (if indeed it applies to them) Perhaps another poster can clarify this.

There is also the time order procedure, for which you will need legal help with the small claims but there are no legal costs to bear from the other side should you lose. This could lead to the T&C of the original contract under which your debt increased, would be rewritten in your favour by the court. If you are entitled to legal help do pursue this with a suitably experienced legal adviser.

You can negotiate based on a percentage of the remaining debt and offer it through a third party as a final settlement of the debt.

While you are negotiating, the interest is still being piled on, so complain and ask that they now freeze interest based on the payments made to date in good faith, and your intention to proceed with any legal remedies available to you.

jellebabe

Do you think CAB would be able to negotiate something like this or would I be better so seek specialist advice?

patricia1066

Some CABx have a specialist debt advice worker, working to the legal advice contract. Same issue of meeting meanstest as any other provider.

You can get free advice from CABx and from CCCRS, and the latter I believe will negotiate on your behalf in making a settlement offer.

However as you cannot offer this at the moment, why not approach Blackhorse yourself as I suggested; it may be ignored, and provides an argument later that any interest charged later was not justified.

You could continue to pay them £50 pm and save towards a settlement sum.... if you do not qualify for free legal help and the CAB cannot help you then you will at least have settlement sum set aside.

jellebabe

Ive spoken to B/Horse twice and they were just so rude to me, I think I will carry on with the £50 and save the money from my 2nd job to make an offer, but as Ive pretty much paid the loan and its only interest outstanding, how much do you think it would be fair to offer them?

Thank you so much

patricia1066

Definitely dont speak to them and explain that you wont respond to any calls they may make as you want all communication in writing.

I did a search on this forum (full final offer) and came up with some interesting threads, among which http://forums.moneysavingexpert.com/showthread.html?p=6799492&highlight=offer+full+final+settlement#post6799492
has very useful information in making the offer. It needs to be made from a third party as even f&f settlements can be overthrown as given without consideration and so not altering the contract.

Set matters in your favour by challenging them to justify the APR on the interest they have charged to your account. This will prepare the ground for your offer. They have not yet sold the debt to a collection agency it seems so you have that in your favour - if they do this they will perhaps only get 40 to 50p in the pound for a debtor in work.

Congratulations for clearing your other debts by the way!

Just to emphasise, the settlement offer is based on a proportion of the acknowledged debt - wait to assess the debt for yourself and then offer a proportion of this.