Self managed DMP - do I start repaying now?

sourcrates

They may have sold these accounts on to 3rd parties, its best to wait until you are written too about them.

Things move at a snails pace in the world of debt collection, nothing happens quickly.

lea

Hello

Today I received a letter from Lowell regarding my old Lloyds credit card balance of around £11k, for which I have been paying a low weekly repayment to Lowell since I defaulted and Lloyds transferred / sold the debt to them.

It's offering me a 70% settlement discount and says if I contact them in the next month they will accept £3333 to settle the account.

I have approx £2k in my emergency fund but that's it.

Would it be worth offering this to clear that debt or should I keep my emergency fund for exactly that?

Is this likely to be the only discount opportunity settlement I'll get from them? It seems like a large discount and a good opportunity but I'm not sure....

Thanks again for your advice

RAS

Telephone them and advise that you do not have the assets required to fund this offer. 

sourcrates

Lowell will have paid around 2k for this debt, and yes, a 70% discount is unusual.

Which leads me to think there may be "issues" with the account, possibly.

Have you done a CCA request to Lowell for this debt?

If not, then that should be your next move, discounts of this nature usually means one of two things, either Lowell want to clear the decks for new business, or they think there may be some issue with the enforceability of the debt.

Only way to know for sure is to send that CCA request and see what response you get.

Rob5342

I agree, i don't think anyone should ever consider paying a settlement amount without first having done a CCA request. You'll need your emergency fund for emergencies so don't spend that. If it does turn out to be enforceable there will be other opportunities to settle, so don't feel pressured into settling now. 

lea

Thanks all.
I haven't yet done a CCA, not for any of my debts.
This one relates to a Lloyds credit card that I probably took out 15 or 20 years ago, certainly a very long time ago at least. Do you think that could be why the discount is so high?

Thank you again 

Rob5342

It could be, or as Sourcrates says it could also be because they want to clear some old debts off their books. I suggest you ask for the CCA for any debts that have been owned by debit collectors for a while as you can then simply just forget about them if the CCA can't be produced. I had a £7000 Barclaycard debt that I am now just ignoring as PRA couldn't produce the CCA, 

sourcrates

lea said:

Thanks all.
I haven't yet done a CCA, not for any of my debts.
This one relates to a Lloyds credit card that I probably took out 15 or 20 years ago, certainly a very long time ago at least. Do you think that could be why the discount is so high?

Thank you again 

The older the debt is, the less likelihood there is of compliant paperwork existing.

Of course Lowell are well aware of this fact, which could be the reason for such a large discount.

Lenders keep paperwork an average of 6 years, sometimes a little longer, see what happens.

lea

Thank you both, I was just worried about potentially passing up this huge reduction settlement offer. I'll request CCAs for all the debts now with collection agencies.

Thanks all for your help once again.

Rob5342

Settlement offers will always be an option, so never be tempted to pay one thst you can't afford, and never pay one without first having made a cca request.