140k Unsecured debt - advice

ldn83

sourcrates said:

ldn83 said:

Just getting ready to take action in dealing with the debt finally. Just got a question, for those that set up their own DMP’s, firstly, did most accounts default without issue or did you have people knocking on your door trying to establish contact (eg Fieldcall) and endless letters and phone calls hassling? Also, did any debts not default within 6 months? And secondly, when you eventually negotiated a re-payment plan after default, did they want to see a budget to see how much you can afford or did they take the first figure you offered? Currently I’m looking at paying back 15% of the original monthly payment per debt until we have more cash free to pay down a higher amount. 

"Affordability" and "treating customers fairly" are the key issues highlighted by the FCA in a recent report to creditors.

What this means in practical terms is that defaults are taking longer, and SOA`s are being asked for, to ascertain whether proposed payments are affordable to the debtor.

You don`t negotiate a payment plan, as such, you supply a budget showing what you can afford to pay, most are accepted on that basis, debt collection companies with assigned debts are given certain scope to accept payments within a defined amount, without referral back to the client, making for a lot smoother ride all round.

Only certain creditors use companies such as Field call/Resolve call, to name but two, by far the majority will use a call centre based debt collector, the threat of a home visit is a phycological approach to try to re-establish contact so that a payment plan can be arranged, mind games in other words.

There use is generally restricted to mainly built up, inner city areas, or large towns where many addresses can be visited in a short space of time, they are just self employed collection agents with no more power than you or I and can be dealt with on that basis.

Thanks Sourcrates, very helpful as always. The information provided by yourself, others like you and this forum in general is a true public service, truly changing peoples lives daily and I’m very grateful for all the advice and info I’ve absorbed so far.

The more I understand about dealing with debt the more I realise what an absolute disaster an IVA would have been.

ldn83

Just a little update, we have now moved to Monzo and have cancelled all direct debits to unsecured debts and have started the process of defaults.

Just a quick question regarding claims for irresponsible lending, I have at least two creditors (Admiral, Zopa and possibly AA and Updraft too) that I think would be deemed as lending irresponsibly, do I try to default these now and also put in the initial complaint or wait for default and then put in the complaint? Thanks in advance.

sourcrates

@ldn83 In the words of Arnold Schwarzenegger "Do it now" !!

ldn83

Another update on our debt journey. 

6 months into stopping contractual payments completely, we now have 2 defaults. First one was with Zopa - 2 months ago end of May, which we’re now paying £20-£70 a month depending on disposable income, they’re asking to set up a repayment plan but we’re just paying what we can afford without providing any income details or affordability calculations as and when we can but never less than £20 a month. Our Lloyds debt has now been passed to Lowells, we have set up an account and paid in £25 as first payment (their minimum for the debt size is £50 when I tried to set up a plan online), they have got in touch to thank us for the payment but asking to contact them to set up a proper plan to stop any potential further action.

My question at this stage is can we just carry on like this and just pay what we can afford every month to each creditor (never less than £20 each) without setting up formal plans or providing formal evidence of income/expenditure and making contact? My understanding is that as long as there’s some kind of ‘reasonable’ repayment effort court action is unlikely? 

Thanks in advance for any advice or info.

Andyjflet

Why are you continuing to service the other debts when you now have defaults on two? Surely the best action is to now stop paying all the consumer debt, let them default and then offer settlements? During this time you are stashing away all the money you can in an unrelated bank account to help with the settlement's.