Which one do I do?

silverhandbag

I would appreciate some help.

Background

In 2007 (or it might have been the year before) I got a credit card with M&S.

To try to help with my debts that were starting to build, in 2008 I applied for a credit card with Halifax and they sent a card and then another card days later. I don't recall asking for a second card but I wasn't well back then so can't recall.

I always made minimum payments, but had to switch money between accounts to do this and eventually starting taking out cash from my credit cards to make the credit card minimum payments.

In 2020 I could no longer make the minimum payments as my job went due to covid. I phoned both M&S and Halifax often, gave them my budget that showed I couldn't make any payments. I rent, get full SP and a small private pension, plus some Housing Benefit and some off council tax.

M&S defaulted their card in early 2021. During one of my calls to tell them my income still hadn't changed, they decided to refer this as I couldn't afford to pay anything. I recieved a letter that told me they had wiped the just over 7k debt due to affordability. I hadn't asked for it to be wiped - I didn't know they did that, but it was such a relief.

Halifax kept their 2 cards as an arragement to pay for another 7 months (even though they knew I couldn't pay) and then defaulted it. I was under their vunerable? section as I was unwell. 

Early last year Halifax wrote, something along the lines of, how was I going to pay. I replied by signed for letter and asked them if they would write off the debt as my circumstances hadn't changed zand that M&S had already done that. I didn't hear from. At the end of last year they told me they had sold the just under 18k debt to Lowell.

Lowell wrote this year. First asking for full payment of my Lloyds Banking Group on interest free payments. Then writing with 50% off; then 60% off; and now 70% off. 

I've stuck my head in the sand, but need to do something.

My questions are:-

1. Do I ask them for a write-off? What do I do if they say no? Offer them £1 a month?

2. Having looked at the Debt Camel site on two credit cards issued (as mine were in days), do I put in an affordabilty complaint with FOS? 

Brie

Yes an affordability complaint to Halifax (not FOS initially) would be a good starting point.  There's a template on one of the top stickies in this forum.

But taking all this at face value and making a mad stab at a solution I'd suggest there are 2 other things you might think about doing 

1. Set up a payment plan for the Halifax debt at £1 a month.  They'll never get their money back but at least they're likely to back off and only bother you once a year to make sure you haven't won the lottery or something.
2. Talk to a debt advice agency with a mind to getting a debt relief order.  These are sometimes called mini bankruptcy - basically if you have no assets, no car worth much of anything (£4k max), very little savings and debts under £50k you may be able to apply to get a DRO.  What that will do is get Halifax to stop contacting you for a year and at the end of it the debt disappears.  

Info here from DebtCamel What is a DRO (Debt Relief Order) ?

A debt agency can help you work through doing either of these things  - and you can do the affordability complaint while you're working things out.  StepChange and NationalDebtLine both work either by phone or online.  Christians Against Poverty (CAP) and Community Money Advice (CMA) both work in person and may take a more holistic approach to getting your whole financial situation sorted out better - point you towards benefits you might be missing out on etc.  There's also Citizen's Advice but not all areas have debt advisers but can certainly help if there's benefit support required. 

Hopefully you'll find the help you need and get Halifax off your back once and for all.

fatbelly

You have one debt, with Lowell, for 18k

You have not made a payment to it for over 5 years

Lowell are offering to settle for 30%

Why do you feel that you need to do something now? Your strategy seems to be going quite well and it will soon (1) drop off your credit file and (2) go statute barred.

I would suggest that acknowledging the debt by infinite £1 payments would not be a good move and I would avoid insolvency unless really necessary as it may be free but creates a fresh mark

sourcrates

I would do nothing for now, if Lowell are going to get legal with you, you will get prior warning as to what’s coming, as they will first assign the debt to their in-house solicitors, Overdales.

They would then write to you, to set up a payment plan, which may lead to an LBA if ignored.

So unless that happens, I’d stay radio silent for the time being.

Hopefully you can get this over the line and it will no longer be an issue.