Advice for freezing interest.

EssexHebridean

One thing it's important to know is that your credit score is literally a made up number - this is why it will be a different number depending on which agency you look at. lenders don't even see it - but what if they did? If you're not planning on needing credit again, why would it matter? 

As has already been said above your credit history (that's the important bit) is going to show this anyway - (possibly) from the late payment you made previously, through to any DMP you enter - whether that is one arranged via Aqua or one you take control of and set up yourself, which would also cover any other debt you may have. Personally if you're going to go into a DMP of some form anyway I'd suggest you would do far better being in the driving seat for it rather than letting a card company take that role! 

As for your worries about debt collectors. Nobody is going to knock on the door for you defaulting a couple of CCs. And even if they did, you could quite legitimately simply tell them to go away, in whatever terms you chose. You default, you then make an arrangement with the provider to pay an amount per month - set as Sourcrates describes above - and then that's what you pay. they may occasionally write and ask you to increase your payments, you write back and say you can't, and again, they go away for a while. note also I'm saying "write" - once debt is involved it's usually best to try to keep everything in writing - that is the case for anyone, not just because of your position with your disability. It means there is always clarity over what both parties have agreed. 

Own_Worst_Enermy

Bennyblanco187 said:

Thank you for your reply.

I really dont want at this point to default and have the stress of debt collectors and ruining my credit score.

I am able to live without credit card, and wont he using the Aqua card anymore.

I am considering to just start sending letters but my thinking is fragmented and am trying to find out what the nest approach would be with most chance of success.

Should I start with a phone call?

When I ran into difficulties with Aqua earlier this year - it took about 4 weeks of them phoning before I could bare to answer to them, when I did they were perfectly lovely and sent me income/expenditure form to complete (this was a timed response) I was actually going to post it back to them but one day in the Spring I thought easier to call and discuss the contents of the form over the phone. (I was on UC at the time) I started of at just £12 ((could have been as little as £1 being on benefit)) with interest frozen. 

They have never taken any further action/not sold the debt on and my account interest remains frozen.

They have recently wanted to do an update, but again to my surprise their contact now is only ever via text message.

Myself personally I do not look at the credit report. 

Just my personal experience.

Bennyblanco187

Thank you everyone for your help and replies. I took a day to think about things and am unclear on a couple of things.

If they freeze interest on a payment plan is that an IVA?

If I default will I end up having to pay the bill? What would I do when they send those letters you have to reply to about whether you owe the debt?

Sncjw

I doubt you will get anything in regards to unfair lending as you state that you were working at the time of getting the card so you would have used that I come on application and not just the benefits solely. 

EssexHebridean

No, them agreeing to freeze interest is not the same as you entering into an IVA. Them not agreeing to freeze interest, but you choosing to default before starting a Debt Management Plan is also not the same as an IVA. 

If you default you'll still need to pay back what you owe, but once a debt defaults the interest stops on it, and you will be able to pay back at a rate you can actually afford while still being able to cover your outgoings and save an emergency fund. 

In this instance there really isn't any question about whether you owe the debt - you've acknowledged it and been paying it so that's pretty straightforward. Down the line if you got letters from them that you didn't know how to handle you could return here and someone would be able to make suggestions. 

enthusiasticsaver

I agree that defaulting is the best way of getting the interest frozen.  I would not worry about your credit score.  Yes your record will be affected but unless you plan on borrowing more (not a good idea) then it really does not matter. 

Bennyblanco187

Hello everyone, I am not worried about the default anymore, I am now mostly worried about being taken to court and having a ccj against me. I dont know how likely it is that could happen?

TripleH

It's possible, but nearly everything is.

BUT, if you are paying off a debt, it makes little sense for them to get a CCJ against you. This is a method used when parties are owed money and the other side is unresponsive (for whatever reason). You would have plenty of time to prepare if they do take you to court and if it does go in front of a judge, provided you have a sensible budget and repayment plan in place, they won't get the debt repaid any faster so pointless.

As long as you are communicating and paying what you can afford, other means of pursuing the debt bring no benefit to the lender.

sourcrates

Bennyblanco187 said:

Thank you everyone for your help and replies. I took a day to think about things and am unclear on a couple of things.

If they freeze interest on a payment plan is that an IVA?

If I default will I end up having to pay the bill? What would I do when they send those letters you have to reply to about whether you owe the debt?

Benny, there are 3 regulated debt solutions, and 1 informal debt solution, available in England and Wales (Scotland has similar, but slightly different arrangements).

Regulated debt solutions -

DRO - Debt Relief Order
IVA - Individual Voluntary Arrangement
Bankruptcy

The above are regulated debt solutions laid down in statute by Parliament, and are only obtainable using either an Insolvency Practitioner, or the Insolvency service.

Informal debt solution -

DMP - Debt Management Plan

Anyone can organise a DMP if you have a small number of debts to different creditors.

You can make informal arrangements yourself with your lender, by agreeing a payment plan, with reduced, or no interest, for a short period of time, that is just an agreement between yourselves, nothing more.

Debt collection is a long process that goes through many different scenarios, most creditors will sell bad debts to specialist companies, you are free to make whatever arrangements you please as long as it is affordable to you.

Only if you consistently ignore these companies is legal action possible, once defaulted and sold on, its much easier to make an affordable payment arrangement.

I would suggest reading up on as much information as you can from this forum about defaulting/debt collection etc, the more enlightened you are, the easier it is to deal with.

Bennyblanco187

Hello, thanks for the information am waiting for Citizen Advice to contact as well for more advice. You stated to get a CCJ the only way really is to completely ignore the creditors. What if I am not ignoring them but at the time dont have money to pay the amount they are asking, then can they get a CCJ?

I am going to be making a complaint to find out if I was unfairly lent to but in the meantime will try to keep understanding more.

Its very difficult without someone sitting down and helping me, I am getting phone call from citizens advice so hope I can actually meet up with them, Thanks