Overwhelmed by debt - Progressing down Default and DMP route - Advice and help needed

sourcrates

Debt Camel covers the process here:

Affordability refunds from large loans and car finance · Debt Camel

Rob5342

I've made a number of affordability complaints with good outcomes. It's very common for the lender to reject the complaint initially, don't get put off if that happens, escalate the complaints to the financial ombudsman service. 

Don't have any moral qualms about making them, the FOS understand that people can end up in desperate situations. They put some responsibility on the borrower but also a lot on the lender regarding making sufficient checks so they don't give people unaffordable loans to people.

It can take a long time but the results can make a huge difference. After two years pushing a complaint against Nationwide I got £16,000 of interest back. I think that was quite an exceptional case but a lot of people have got decent amounts back. 

Always_Fishing

Rob5342 said:

I've made a number of affordability complaints with good outcomes. It's very common for the lender to reject the complaint initially, don't get put off if that happens, escalate the complaints to the financial ombudsman service. 

Don't have any moral qualms about making them, the FOS understand that people can end up in desperate situations. They put some responsibility on the borrower but also a lot on the lender regarding making sufficient checks so they don't give people unaffordable loans to people.

It can take a long time but the results can make a huge difference. After two years pushing a complaint against Nationwide I got £16,000 of interest back. I think that was quite an exceptional case but a lot of people have got decent amounts back. 

That's encouraging to here thank you for sharing that, appreciate it 👍

Always_Fishing

sourcrates said:

Debt Camel covers the process here:

Affordability refunds from large loans and car finance · Debt Camel

Thank you once again. 

Rob5342

Always_Fishing said:

Feels like a huge weight off not playing the CC game of paying minimum payments then getting the funds back from the cards asap. 

I was in a similar situation, taking cash out with a credit card and then paying it into my bank account to use to pay off the same credit card, all so I'd be making the minimum payment. Starting a DMP was an immediate weight lifted for me, and I very quickly started to feel very confident and on top of things. I started with £44k of debt in 2021, and through a combination of repayments, cca requests and affordability complaints I have now got it down to £1700. I've got the money to be able to clear it but I'm holding out for a decent settlement offer as they will only accept 90% so far. 

Always_Fishing

Rob5342 said:

Always_Fishing said:

Feels like a huge weight off not playing the CC game of paying minimum payments then getting the funds back from the cards asap. 

I was in a similar situation, taking cash out with a credit card and then paying it into my bank account to use to pay off the same credit card, all so I'd be making the minimum payment. Starting a DMP was an immediate weight lifted for me, and I very quickly started to feel very confident and on top of things. I started with £44k of debt in 2021, and through a combination of repayments, cca requests and affordability complaints I have now got it down to £1700. I've got the money to be able to clear it but I'm holding out for a decent settlement offer as they will only accept 90% so far. 

Thanks for sharing that, that's really encouraging to hear how much progress you've been able to make in a similar situation! 

Always_Fishing

Hi,

Regarding my emergency fund, reading through the forum it seems the consensus is to use an ISA for this, which I have now in the way of a cash ISA with my main bank NatWest. Is there any particular reason that an ISA is advised over a regular savings account other than the interest free 20k threshold or is it purely for that reason? 

I'm asking as I'm wondering if it would be more beneficial whilst my emergency fund is low, to use the higher interest regular savings account until my fund grows large enough to worry about paying tax on interest earnings. 

Thanks 

RAS

Up to you, for higher interest accounts, do check that you can make as many withdrawals as you need, when you need.

Always_Fishing

Rob5342 said:

Always_Fishing said:

Feels like a huge weight off not playing the CC game of paying minimum payments then getting the funds back from the cards asap. 

I was in a similar situation, taking cash out with a credit card and then paying it into my bank account to use to pay off the same credit card, all so I'd be making the minimum payment. Starting a DMP was an immediate weight lifted for me, and I very quickly started to feel very confident and on top of things. I started with £44k of debt in 2021, and through a combination of repayments, cca requests and affordability complaints I have now got it down to £1700. I've got the money to be able to clear it but I'm holding out for a decent settlement offer as they will only accept 90% so far. 

I'm just starting to gather some info for affordability complaints now, I feel more at ease doing so now as some of it seems almost criminal! The first 2 CC's I have looked at, Fluid and Aqua, have both given me credit limit increases in the past, either during the same month or the month directly after they sent me documents saying my account was temporarily suspended due to exceeding my credit limit!

Always_Fishing

I've had my first affordability complaint rejection from M and S for my CC, they said there checks showed my disposable income was over £1600 when issued. Waiting on my bank statements that I've ordered now to arrive to send my complaint to the ombudsmen, might need help with that but will cross that bridge when i come to it. 

I'm can only imagine there affordability figures will have come from what I've entered in the application rather than them checking? Considering I was earning over £10k a year less at the time it wasn't close to the figure they've quoted, statements will show that. 

On another update, some bad news but taking the positives from it, we had an unexpected emergency trip to the vets yesterday resulting in an £800 bill. All is now ok and whilst it's never a good thing to be parting with funds unexpectedly, I can't stress enough how easier and stress free the situation was having started this process, I had £680 in my emergency fund and have managed to look at my budget and sacrifice in some areas, like fuel due to low usage this month whilst off work, and kids pocket money which they understand in the situation to balance the budget. 

It was so refreshing not to have to panic about money in an already stressful situation, only a month ago I'd have been trawling the internet all last night for a loan on terrible terms or similar to pay for this, or even worse we may not have been able to pay for the treatment and had to have her put down 😞. 

Now to start building back up again, Ive gotten a few quid due back in from Vinted sales today so I don't have to sit and wait until my next salary 🤞