DMP Question HSBC Credit Card

Coggers_76

Hi all.
sadly I had to arrange a DMP about 3 years ago due to the breakup of my marriage. I started one with Stepchange and have paid every payment for the last 3 years.

I owe I think about £40k across all debts and am paying £275 which is obviously split between each creditor. I am hoping to increase this significantly soon as a I have just qualified as an IFA.

one thing I am a little worried about is in my new contract it states if I get a CCJ I will lose my job…

recently stepchange contacted HSBC and all
the creditors to say after a budget assessment I was able to increase my payments (was paying £250) but HSBC have come back and said they are not looking after my debt now and it has gone from my online banking and they gave me the number for the new department which inwas
told was the insolvency department.

now I’m extremely worried now because if they issue me with a CCJ then I won’t have a job to pay them anything… I’m also a bit surprised that after 3 years they have only just marked it as a default on my account which has screwed me being able to get a remortgage to repay all the debt as it is so recent.

it’s possible I could maybe pay the amount as it’s about £1500 and I could ask my employer to advance me the money however if they do this and I repay that then they may well do the same for the £30k loan which I am obviously in no position to repay that which is still
showing as in arrears after 3 years I.e still no default on that!

is it likely that HSBC will issue a CCJ bearing in mind I have been making the payments to Stepchange? At the moment they haven’t even told me where to send the payments for the credit card (there fault) so I am not even making any repayments on it.

this has got me pretty worried tbh.

any advice would be very helpful.

thank you

sourcrates

Nothing to worry about, lets make one thing crystal clear, creditors do not issue CCJ`s, only the court can do that, it`s more than likely HSBC have just passed your account over to internal collections, or perhaps just sold your debt, that`s all.

If, they were considering court action, it would be their tame solicitor contacting you, and they would have to observe the civil procedure rules, so a "letter before action" would be a first step, this is a document with a 30 day return window, which allows an agreement to be made, without the need to resort to legal action, as you already have an agreement in place, do you see how this would not be appropriate in your case ?

Creditors don`t like dealing with long term bad debt, so they either refer it to internal collections, or an external agency, or they simply sell your account onto a debt purchasing company, who will be happy to take whatever is affordable from you.

All perfectly normal, run of the mill stuff.

You will be written too in regard to the above, all in good time.

Coggers_76

Thank you so much I have worried about this a lot so you have put my mind at rest.

Im really grateful to you

sourcrates

Legal action can never be ruled out 100%, but at this stage, its much more likely to be one of the option`s I have described above, this is why we have a collection industry, legal action is usually a last resort, when all attempts at contact have been ignored, much further down the line than you currently are.

fatbelly

I agree with sourcrates - court action is unlikely here.

I note you were thinking of remortgaging to pay off your non-priority debt. If I may give financial advice to an IFA, please don't do that.

It moves the debt to a place where it will accrue interest and it also moves non-priority debt to priority, which is pretty much against rule 1 of debt advice.

Sticjk with the debt management plan and try to save a fighting fund on the side.

Coggers_76

Thank you I think I was just a bit worried about further action and would of liked to have paid it off. I didn’t mention that my ex wife is still on the mortgage as NatWest wouldn’t let me take her off (due to the dmp) despite me earning enough to be able to do it so that was another reason for looking at the remortgage.

having said that I’m on a great rate with NatWest for another 1.5 years and she isn’t hassling me to come off the mortgage so I’m happy to continue as I am.

thanks for your advice it really means a lot.

Rob5342

The thing to remember is that your debt is an investment for whoever owns it. If they are getting the money back for free by you being on a debt management plan then they are not all that likely to want to incur the cost of getting a ccj against you which would probably only result in them getting the money repaid at the same rate. There's no guarantee they won't but as Sourcrates says it's normally a last resort when they can't get it back any other way.

I'm on a debt management plan and have had some initially scary sounding letters saying my debt will be passed to the recoveries team who may consider legal action. In reality they have all been sold straight on to debt collectors who just accepted the same monthly payments without any questions. Debt collectors also sound scary at first, but they are just companies that focus on buying debts and have no more rights than the original debt owner. They can actually often be better to deal with since they will have bought the debt at a significant discount and may be open to reduced settlment offers.