Dealing with £39K debt

DisabledDan

bcs7 said:

DisabledDan said:

bcs7 said:

I have had some problems with illness over the last year so much of what was discussed above was put on hold. The monthly payments were being made but I didn't get anywhere with making offers.

I have recently made an offer to my lowest creditor where I still owe £820 which is being paid at £10 per month.
I offered £180 as a final settlement which is 18 months payments, pointing out that I have 5 other debts which are much larger so this small debt would not be a priority. With my letter I did include a copy of my expenditure (as it was advised in the template). After reading some other threads on here I'm wondering if I should have left that out?

They called me today and said they would be willing to settle for £656 (80%). 
I've said I can't afford that so it will have to stay as the monthly payments and they've put a note on my file.

Is it now a case of just waiting and see if they come back again in future with a lower settlement amount?

I have 5 other larger debts totalling about £36K which I eventually want to make offers on also but was using this smallest one as a tester for the process first.

How you deal with this is up to you, but you already trashed your credit record and you are at the halfway point of the debt becoming statute barred unless they get a CCJ.

My approach to this would be to wean then off the £10 a month by writing them an email saying that due to a change in circumstances you are not going to be able to make any payments to your debts.

Do not be in a hurry to settle the cheapest or the ones with Link, the interest rate and amount matters when interest is being added but that is no longer the case so debt is debt is debt.  Also reaching a generous settlement at less than 60% off tells the other lenders that they can squeeze you for more, more per month and more as a settlement.  

While if you pay nothing to any of them you just prepare the ground for the next stage, they will threaten blah blah and you just ignore them, do not engage, not to emails nor calls, SMS nor letters.  You can demand they limit communications to just Royal Mail BTW. 

They have a choice, put it on ice hoping your circumstances change or start the cycle of letters that may lead to a settlement offer between 60% and 90% although the latter is usually reserved for debt they know they can't enforce or if the company or debt is about to be sold.

The mindset I have is that I have paid enough interest over the years and I consider 

What is Money
What is Debt

It turns out that they are the same thing; debt on a promise.

Money is debt, whether it be Government bonds where the Gov secures the bond on taxation of their citizens or money you are paid which has a promise to pay the bearer, but even that money does not really exist, it was created in computers on the back of these promises.

So basically all transactions are based on one thing, Confidence of repayment.

If a member of your family lend you £10,000 they would have paid tax on the gross of that, they can't lend you money they do not have.  

The lending institutions on the other hand create the money out of thin air, the amount they can lend is limited by their liquidity ratios, when they lend you money it make their ratios worse if they are not getting payments so they sell it and replace it with good debt.

The people who bought your debt paid between 5p and 12p in the pound for it, they are in an entirely different game, they are governed by FCA rules and for them it is all about getting as much as they can by using all sorts of threats and intimidation.  If you engage with them they can put pressure on you and gather information from you.  So they look at your credit record and make a decision.

They can disappear for a year or the debt can be assigned to a different collection company.  In my experience they only thought about a CCJ in year 5 but only one consumer debt company went through with it and that was from far bigger debts and far more players.  If I cared about my credit record I might have settled that debt, it was the smallest of my debts.

So when they write a letter before action your response can be,

I am sorry it has come to this, feel free to get CCJ, my circumstances are not going to change, I have spoken to debt charities  and they suggested that I will pay £1 a month to the Court for each debt as it is all I can afford.  So they can do the casework get a CCJ and probably get £72 back in 6 years. 

By reducing your payments to nil now you get them used to this being a delinquent debt, while if you pay or service a debt they see someone who has lump sums and a chance of repayment.

How you proceed is up to you, you won't be getting a new credit record any time soon and it might be that is a good thing if you need it for self discipline or if like me you want nothing more to do with any debt.  I pay my energy on receipt of bill and my water too, I don't like owing money to anyone and I would rather not participate in the debt game.

You might take a different route which is why you should be paying something to your emergency fund, maybe not to settle the debts but to cover an unexpected expense.

So if I wanted to reduce the size of the monthly payments I could just write to them telling them so and then reduce them?

I gave Intrum an expenditure form with my settlement offer letter as that was advised in the template I used (I think this was National Debtline).

I'm being chased by Link (email/texts/letters) telling me it is now time to review my monthly payments and to fill in an expenditure form. It's all worded to say they want to make sure I can still afford my payments but I assume this is just a ruse to find out the state of my finances in order to pressure me in other ways?

Why pay more than £1?

why pay anything?

Why given them a form, you do not have to and any information only hurts you. YES it is a ruse.

Really this is a power technique, by asking you to do things and you complying you give them power, stop that immediately.

I have learnt over the years that companies do not respect your wishes on sharing your data or how they use data, so the only way to opt out is to never provide the data in the first place.  You can't do that, so when suggesting a DMP I always suggest getting a £1 pay as you go sim and putting it in a dumb phone and then using a different email provider to get a new online email address. 

Then you log into the portal of each of your creditors and update your data, change the phone number and change the email, note do not add to existing one.  Respond to any confirmation links and check back a week later to make sure old contact data is gone.  For the moment you only respond to contact via this new email and phone, you do not answer your main phone unless it is a friend or family in your address book, if it is important they will leave a message. If a creditor leaves you a message after the update to no respond to it in any way.  I actually report SMS messages and debt collector emails as spam, it is unsolicited contact so why not.

Then when a bit of time has passed and contact is now being made by the proper channels you can stop all the contact by simply sending an email saying 

=============
Dear Sir/Madam

Please accept this email as a formal request in accordance with GDPR and the Financial Conduct Authority Consumer duty which says you should pay due regard to customers’ reasonable requests in respect of when, where, and how, you can contact them.

Therefore, this request is for you to immediately cease all contact with me via phone, sms and email. To be clear from now on you are to only contact me via Royal mail. 

Your abusive and overbearing level of contact has caused me profound mental health anxiety and stress.
=============


If you want to speed up the DMP you can add


=============
Whilst writing I must also inform you that due to a change in circumstances I will no longer longer be making any contribution to any debts I have with any companies.  This is not an acknowledgement of any alleged debt I am simply making you aware.
=============


The mindset you need to develop is that you have had enough, the deal was they would lend you money for low interest rate, but they did not have the money to lend you, only a means to add it to their computer and to expect you to repay it with interest.

When you default they will sell it for between 5% and 12% of the value of the debt. So that is it's real value, regardless of the fact that the debt purchasers can ask for the full amount.

Now there are several options, but the main two for you are DMP which you have chosen or not paying anything until the debt expires. They start with the same steps, Internal Collections, External Collections V1 and 1.1, default, interest freeze,  sale of debt, External Collections V2 & 2.1, & 2.2, & 2.3, & 2.4, & 2.5, & 2.6, & 2.7, & 2.8, & 2.9.  Those external debt collectors will send a cycle of letters and when they fail they stop and the next one comes.  You rinse and repeat your Do Not Engage policy until you are offered between 60% and 95% discount, not a vague discount that tries to get you to acknowledge the debt but a clear number.

The only difference between the DMP and not paying is that you achieve a full and final settlement within a few years and so there is low chance of a CCJ even being considered, except for certain types of lender.  

Consider for £39,000 charged at 39.9% (which is where they will put you once you are trapped), where you pay at least £800 or 4% (whichever is more) it will sake 11 years to pay off and you will have paid around £95,000 on top of the £39k.  You probably paid more than this in interest already because people keep tapping into the remaining credit.  The money never existed, they will sell it for as little as £1950 when it defaults and so why would you pay more than you need to? Even at 60% off you pay 

£15,600.00 which sounds OK at the moment only because you are paying through the nose,  The longer you hold out the less you will pay.

bcs7

DisabledDan said:

Why pay more than £1?

why pay anything?

Why given them a form, you do not have to and any information only hurts you. YES it is a ruse.

Really this is a power technique, by asking you to do things and you complying you give them power, stop that immediately.

I have learnt over the years that companies do not respect your wishes on sharing your data or how they use data, so the only way to opt out is to never provide the data in the first place.  You can't do that, so when suggesting a DMP I always suggest getting a £1 pay as you go sim and putting it in a dumb phone and then using a different email provider to get a new online email address. 

Then you log into the portal of each of your creditors and update your data, change the phone number and change the email, note do not add to existing one.  Respond to any confirmation links and check back a week later to make sure old contact data is gone.  For the moment you only respond to contact via this new email and phone, you do not answer your main phone unless it is a friend or family in your address book, if it is important they will leave a message. If a creditor leaves you a message after the update to no respond to it in any way.  I actually report SMS messages and debt collector emails as spam, it is unsolicited contact so why not.

Then when a bit of time has passed and contact is now being made by the proper channels you can stop all the contact by simply sending an email saying 

=============
Dear Sir/Madam

Please accept this email as a formal request in accordance with GDPR and the Financial Conduct Authority Consumer duty which says you should pay due regard to customers’ reasonable requests in respect of when, where, and how, you can contact them.

Therefore, this request is for you to immediately cease all contact with me via phone, sms and email. To be clear from now on you are to only contact me via Royal mail. 

Your abusive and overbearing level of contact has caused me profound mental health anxiety and stress.
=============


If you want to speed up the DMP you can add


=============
Whilst writing I must also inform you that due to a change in circumstances I will no longer longer be making any contribution to any debts I have with any companies.  This is not an acknowledgement of any alleged debt I am simply making you aware.
=============


The mindset you need to develop is that you have had enough, the deal was they would lend you money for low interest rate, but they did not have the money to lend you, only a means to add it to their computer and to expect you to repay it with interest.

When you default they will sell it for between 5% and 12% of the value of the debt. So that is it's real value, regardless of the fact that the debt purchasers can ask for the full amount.

Now there are several options, but the main two for you are DMP which you have chosen or not paying anything until the debt expires. They start with the same steps, Internal Collections, External Collections V1 and 1.1, default, interest freeze,  sale of debt, External Collections V2 & 2.1, & 2.2, & 2.3, & 2.4, & 2.5, & 2.6, & 2.7, & 2.8, & 2.9.  Those external debt collectors will send a cycle of letters and when they fail they stop and the next one comes.  You rinse and repeat your Do Not Engage policy until you are offered between 60% and 95% discount, not a vague discount that tries to get you to acknowledge the debt but a clear number.

The only difference between the DMP and not paying is that you achieve a full and final settlement within a few years and so there is low chance of a CCJ even being considered, except for certain types of lender.  

Consider for £39,000 charged at 39.9% (which is where they will put you once you are trapped), where you pay at least £800 or 4% (whichever is more) it will sake 11 years to pay off and you will have paid around £95,000 on top of the £39k.  You probably paid more than this in interest already because people keep tapping into the remaining credit.  The money never existed, they will sell it for as little as £1950 when it defaults and so why would you pay more than you need to? Even at 60% off you pay 

£15,600.00 which sounds OK at the moment only because you are paying through the nose,  The longer you hold out the less you will pay.

I came to the arrangements with paying them before I had the knowledge of a lot of things that are explained on this site. As explained before, the form I sent to Intrum was because it advised to do it in the template which was supplied by a debt charity that give advice on this things.

With my phone I already don't answer numbers I don't recognise and let them go to voicemail if it is important.

In terms of defaults, all of the debts have already defaulted in early 2021. Having last looked there are 16 defaults in total. So there is no interest being charged on any of the debts now.

I assume the reason for the multiple defaults is because they are from the original creditor and then when they handed over to another creditor and at that time I wasn't paying it meant it created another default for the same debt?

I assume with the defaults the original creditor ones which show as £0 balance will now drop off after 6 years (early 2027)? Under the current situation I assume that will also happen with the others? However if I stop paying or reduce my payments, will that create more defaults that will take 6 years?

I'm also going to send CCA requests for 5 of the 6 debts to see if any come back as un-enforceable. 1 of them was an overdraft so I assume that won't count?

It may seem like I'm a bit all over the place but I'm now trying to find out all the info before deciding how to proceed and then stick to a plan.

fatbelly

Seems organised to me

The original default date travels with the debt, whoever buys it. No new default is created. All the entries drop off after 6 years

Yes you cannot cca an overdraft. Well you can, but most creditors are aware of the rules and will tell you

bcs7

fatbelly said:

Seems organised to me

The original default date travels with the debt, whoever buys it. No new default is created. All the entries drop off after 6 years

Yes you cannot cca an overdraft. Well you can, but most creditors are aware of the rules and will tell you

Ah ok, I thought that stopping agreed payments created the default.

So for example, take my lowest debt, on my credit reports there are 3 defaults as follows:

Secure Trust Bank PLC (original creditor) - balance £0 - defaulted amount £1070 - date of default 24th February 2021
Debt Managers Limited - balance £0 - defaulted amount £1070 - date of default 24th February 2021
Intrum UK Finance Limited - balance £810 - defaulted amount £1070 - date of default 24th February 2021

All 3 of those defaults will disappear by 24th February 2027 and not be replaced by others in the meantime, regardless of what I do in regards to payments on the account?

RAS

In practical terms, it depends on whether debt collector reports to the credit record company and can take a month or so. So sometime in March 2027, you'll be clear regardless of whether you've paid in full or not at all. This would only get extended if they decided to go for a CCJ, which is more likely if you don't pay anything. 

What's common is that they will offer a settlement figure down the line. PRA are difficult, others more likely to ask for 30-60% of the debt outstanding.

fatbelly

bcs7 said:

fatbelly said:

Seems organised to me

The original default date travels with the debt, whoever buys it. No new default is created. All the entries drop off after 6 years

Yes you cannot cca an overdraft. Well you can, but most creditors are aware of the rules and will tell you

Ah ok, I thought that stopping agreed payments created the default.

So for example, take my lowest debt, on my credit reports there are 3 defaults as follows:

Secure Trust Bank PLC (original creditor) - balance £0 - defaulted amount £1070 - date of default 24th February 2021
Debt Managers Limited - balance £0 - defaulted amount £1070 - date of default 24th February 2021
Intrum UK Finance Limited - balance £810 - defaulted amount £1070 - date of default 24th February 2021

All 3 of those defaults will disappear by 24th February 2027 and not be replaced by others in the meantime, regardless of what I do in regards to payments on the account?

That's correct.

Technically that's only one default, issued by Secure Trust in 2021. Subsequent buyers have to keep the same date. It's now owned by Intrum

DisabledDan

RAS said:

In practical terms, it depends on whether debt collector reports to the credit record company and can take a month or so. So sometime in March 2027, you'll be clear regardless of whether you've paid in full or not at all. This would only get extended if they decided to go for a CCJ, which is more likely if you don't pay anything. 

What's common is that they will offer a settlement figure down the line. PRA are difficult, others more likely to ask for 30-60% of the debt outstanding.

Not sure if I agree that not paying anything makes a CCJ more likely, based on my experience, anecdotal comments over time and a family member who works in debt industry, I think it depends on

who owns the debt
who is collecting
whether you have ever engaged with them or others
What your credit record looks like.

Some organisations do not sell debt so they seem to almost always go for CCJ, I am thinking Credit Unions etc. 

Some of the Debt Solicitors go for CCJ, but not always four of my debts went to two such firms, but they did not take me to Court on any of those, but they did obtain one at a very old address for a relatively small debt that had no enforcement since defaulting. They made threats, warrant of control, something about earnings but it went nowhere.

I think when you engage with such firms it gives them hope, the more you do for them the more it seems to encourage them. My understanding is they create a debt profile and if they get no engagement at all they have nothing to populate it with. 

If they see I have fallen off the face of the earth, never engaged, taken extra measures to become untraceable like not going on voters roll,  then they possibly think I have left the country or died. 

I am absolutely convinced that if they see any healthy activity on your credit record they will go for the CCJ, I know exactly what triggered them on the only CCJ I got.  

I relaxed my visibility to test the water, sure some fools like Lowell still pursue debt they know has expired but why give them oxygen, if they want to waste money sending cycles of letters then I am happy to waste their money.

Of course as this forum is testament to the fact that many companies lie about there being an CCJ obtained or about a small payment made by some anonymous stranger which extended the debt, although no evidence of these is ever provided.

I don't think we can know all the factors that make them go for a CCJ but I suspect it is some sign of hope to recover something, it may be that they just sell it to an even lower form of scum and reduce their losses for buying a debt at 5%.

bcs7

DisabledDan said:

RAS said:

In practical terms, it depends on whether debt collector reports to the credit record company and can take a month or so. So sometime in March 2027, you'll be clear regardless of whether you've paid in full or not at all. This would only get extended if they decided to go for a CCJ, which is more likely if you don't pay anything. 

What's common is that they will offer a settlement figure down the line. PRA are difficult, others more likely to ask for 30-60% of the debt outstanding.

Not sure if I agree that not paying anything makes a CCJ more likely, based on my experience, anecdotal comments over time and a family member who works in debt industry, I think it depends on

who owns the debt
who is collecting
whether you have ever engaged with them or others
What your credit record looks like.

Some organisations do not sell debt so they seem to almost always go for CCJ, I am thinking Credit Unions etc. 

Some of the Debt Solicitors go for CCJ, but not always four of my debts went to two such firms, but they did not take me to Court on any of those, but they did obtain one at a very old address for a relatively small debt that had no enforcement since defaulting. They made threats, warrant of control, something about earnings but it went nowhere.

I think when you engage with such firms it gives them hope, the more you do for them the more it seems to encourage them. My understanding is they create a debt profile and if they get no engagement at all they have nothing to populate it with. 

If they see I have fallen off the face of the earth, never engaged, taken extra measures to become untraceable like not going on voters roll,  then they possibly think I have left the country or died. 

I am absolutely convinced that if they see any healthy activity on your credit record they will go for the CCJ, I know exactly what triggered them on the only CCJ I got.  

I relaxed my visibility to test the water, sure some fools like Lowell still pursue debt they know has expired but why give them oxygen, if they want to waste money sending cycles of letters then I am happy to waste their money.

Of course as this forum is testament to the fact that many companies lie about there being an CCJ obtained or about a small payment made by some anonymous stranger which extended the debt, although no evidence of these is ever provided.

I don't think we can know all the factors that make them go for a CCJ but I suspect it is some sign of hope to recover something, it may be that they just sell it to an even lower form of scum and reduce their losses for buying a debt at 5%.

What are the consequences of CCJ's being requested?
Does it mean that the court looks into your accounts and determines if you can pay more so then forces you to pay more?

fatbelly

I prefer the phrase 'issue a court claim' as it seems accurate as to what happens. CAB use 'take you to court' which is hugely misleading as no-one takes anyone anywhere. 

When you get a claim you get the chance to challenge it, which 9/10 times you should do.

More than that, every court claim has to be preceded by a a formal preaction letter and that should always be responded to.

As for who issues them it's pretty random but I have also observed that contact encourages them.

sourcrates

Commercial debt buyers can get litigious, but by far the majority of CCJ`s granted just sit unactioned on an individuals credit file for 6 years, then drop off due to limitation.

They never get enforced, its all a number s game to them, the more clients they can "scare" into paying by obtaining judgement against them, the better for them.

Occasionally an attachment to earnings may be applied for in some cases, but each stage of enforcement costs the creditor money, money they cannot be certain they will ever recover, they have shareholders to satisfy, so they want quick, easy profits.

Dan`s "off grid" approach certainly has merit if your circumstances are suitable for such a strategy.