Likelihood of CC refunds

scout33

Hi! 

Just wondered if anyone had any experience successfully challenging irresponsible lending? 

Virgin allowed a second CC so debts are 3k on one and 17k on another
Barclaycard increased limit and debt is 17k all with other bank loans and smaller CC debts. 

Mental health was a big factor as well as gambling and I’m just wondering if it’s worth challenging the lending and agreeing to pay back a percentage over time minus the interest? Otherwise an IVA is the best options 

Thoughts gratefully received!! 

Mark_d

I presume your income and your credit history suggested that Virgin could trust you enough to lend you more money?  Are you on a low income?  Do you have any credit defaults?  You have a large amount of borrowing but should that mean a person shouldn't be allowed to get any more credit?

ManyWays

Those sound like big numbers, so this is a sensible thing to think about before choosing an insolvency option like an IVA as there is no point in making these claims afterwards. 
Do you have a house with equity, is that why you are considering an IVA? 
Do you still have MH problems or gambling problems, or is all that in the past? 
It may be a good idea to start on a DMP and see where you can get with these large claims

scout33

Income was high but only the minimum payments were being made and lots of cashi withdrawals and money transfers. 

MH now being treated and gambling is no longer a problem. 

How likely are lenders to accept a low monthly repayment on a DMP? Have a house but not much equity- maybe 30k.
Any advice on what is best would be great. StepChange said it will be hard to remortgage with an IVA so I’m not sure what would happen then!

Rob5342

In my experience you are much more likely to win an irresponsible lending complaint when the lender has known you for a while and has increased your available credit on multiple occasions. It can take a long time to chase them through as your normally have to escalate the complaint to the FOS and if you win it's just the interest that will get refunded. I had a very good result with Nationwide but it took two years, a good result with PayPal credit whick took a year, and I had six other complaints that I lost.

Your priority should be to get yourself into a sustainable position with a debt solution that will clear everything. Once you hsve done that then make affordability complaints to see if you can speed it up, but dont rely on winning any as they might all be rejected. 

ManyWays

As you have a house, one of the biggest problems with an IVA is the requirement to release equity by getting a secured loan in the last year of the IVA, and these secured loans can be very expensive.
You cant rely on affordability complaints but when they work they can be a big help. In general its not good to delay them as it is much easier to get refunds for the last 6 years and to produce bank statements for the last six year as evidence of unaffordability. I think complaints plus a DMP, self managed if you want, is a better way forward than an IVA, then reconsider your situation in a year if you feel the DMP is not making enough progress.

scout33

Thank you so much. Do you have any idea of the minimum amounts usually agreed to in a DMP? Just wondering if it’s even something they would consider as it would be about a fifth of the current monthly amount! Also, when the card defaults does that just get marked once, or everything month? And in a DMP is every month recorded as a missed payment?

Grumpelstiltskin

Remember you are in charge and you decide what you can afford to pay so creditors have a choice accept  what you pay or get nothing.

Once a debt has defaulted then arrangement to pay doesn't come in, that's why we say let them default before starting payments, if you start before defaults then yes arrangement to pay are marked

scout33

Grumpelstiltskin said:

Remember you are in charge and you decide what you can afford to pay so creditors have a choice accept  what you pay or get nothing.

Once a debt has defaulted then arrangement to pay doesn't come in, that's why we say let them default before starting payments, if you start before defaults then yes arrangement to pay are marked

Thanks for this, sorry for my ignorance but can you explain the last paragraph to me please? Thanks!

Grumpelstiltskin

When you stop paying a debt it will default, that default will show on your credit  report for 6 years ( assuming you live in England or Wales ).
The original creditor will either sell or pass the debt on for collection to a different company. They will then contact you asking you to pay.

If you start making reduced payments before it has defaulted your credit report will show it as Arrangement to Pay, problem with that is it stays on your credit report for 6 years after you make the final payment. So if it takes you 4 years to repay it stays on your credit  report for 10 years.

Rob5342

scout33 said:

Thank you so much. Do you have any idea of the minimum amounts usually agreed to in a DMP?

There's no agreement required. You pay what you can afford as that's the only money you have and the lender just has to live with it. Debts often get sold on after they default for a small fraction of their value (maybe 10%), so what seems like a small payment to you could actually give whoever bought the debt a nice little profit over a few years.