Help required with large Persistent Credit Card Debt. Have had a recent first Default.

SpireCaptain

theville32 said:

SpireCaptain said:

sourcrates said:

After 30 plus years in debt to various banks, and financial institutions, one IVA, and a DRO, as well as time spent in debt management, I became debt free some 12 years or so ago.

I have not used credit in the vast majority of those 12 years, my modest income is my credit, and when its gone its gone, I never intend to be a slave to a bank ever again, so can I ask you, why do you want to stay one?

Chapeau sourcrates. In 2 paragraphs you've saved me trawling through your tens of thousands upon thousands of posts to dissect your backstory!

No wonder you are one of the true oracles on here. I've spent the last hour reading various threads from 2007 though to the present from pred credit crunch to post covid, dri, IVA DMP etc.

To know you have first hand knowledge of all 3 of the debt solutions I've been weighing up is phenomenal. I can finally  feel positive in undertaking this journey alone as I know the support/constructive critique  of my decisions on these boards is ready and willing to be given.

To hear you've come out the other side and can help others so passionately but also so matter of fact is incredible. Thank you. 

Hi SpireCaptain, I just wanted to say thanks for posting here and thanking sourcrates for sharing his story and offering such frank advice. It is easy to get consumed with our own problems and having had a quick look at your thread I have realised there are a lot of other people on this forum in similar or more complex financial situations. I fully understand and appreciate how stressful it can be as well as how isolated one feels. This Forum has been incredibly supportive and a breath of fresh air that I wasn't expecting. When contacting debt help in the past, I always seemed to fall through the cracks as my debt was too large and I wasn't making enough money for DMP's. So a big thanks to all of you who are replying to our desperate and sometimes inarticulate posts each day/week. We would all be completely lost without you! 

If I can help in anyway, please let me know. I will be calling Business Debtline again tomorrow about the Barclays Commercial CC and Bounce Back Loan, to try and confirm what the last guy said about defaulting on these accounts. I will update this thread with the info, for people like yourself who also have these types of unsecured debts. All the best and thank you again for sharing your story and journey.

Thank you theville32. It'll be interesting to see how you get on with that phone conversation.

 With my BBL I can't see the direct debit instruction coming from my Business Account or in account management. I assume if I don't manually move the direct debit in loan management to another account where I could cancel it from, it'll have to keep taking the direct debit from the business account until there is no more overdraft for it to use. 

Can you see the direct debit in your business account management menu? I presume as it's in house with Barclays they keep it in-house so can't cancel DD manually. 

theville32

Hello, sorry for the delay in replying about my chat with Business Debtline. I have called a few times and will try again today, but they have been very busy and the line always gets disconnected :-(

I did receive my Barclaycard Business credit card Terms and Conditions back. There is a line where it says (attached): "Credit Agreement regulated by the Consumer Credit Act 1974". Does this mean that it falls under the same protection as my personal credit cards and I can stop worrying about this particular debt?

Thanks in advance for any help. 

theville32

With my BBL I can't see the direct debit instruction coming from my Business Account or in account management. I assume if I don't manually move the direct debit in loan management to another account where I could cancel it from, it'll have to keep taking the direct debit from the business account until there is no more overdraft for it to use. 

Can you see the direct debit in your business account management menu? I presume as it's in house with Barclays they keep it in-house so can't cancel DD manually. 

Hi SpireCaptain, sorry for the delay in responding to your question. I was able to see the Direct Debit in my Barclays Business account management area and cancel payments towards the loan. If you can't see this, it may be worth calling them to try and cancel payments - if they will let you?
Hope that helps.

theville32

theville32 said:

Hello, sorry for the delay in replying about my chat with Business Debtline. I have called a few times and will try again today, but they have been very busy and the line always gets disconnected :-(

I did receive my Barclaycard Business credit card Terms and Conditions back. There is a line where it says (attached): "Credit Agreement regulated by the Consumer Credit Act 1974". Does this mean that it falls under the same protection as my personal credit cards and I can stop worrying about this particular debt?

Thanks in advance for any help. 

Further to this and concerned about the part in point 1 which discuuses whether the CCA applies to businesses. From what I can find online, it seems that the CCA covers Sole traders (which I am). I am also the only person named in my business.

I found this link which seems to support this:

https://www.tlt.com/insights-and-events/insight/consultation-reforming-the-consumer-credit-act-1974---10-key-points

"Scope of the CCA

The CCA currently has limited application to business lending. Sole traders are protected under the CCA as individuals, but, in its current form, the CCA does not apply to limited companies, LLPs, or lending/hire for business activities over £25,000".

It looks like th government is lookig to change the rules with how the CCA applies to businesses, but I am unsure if these have come into affect yet. I don't think they have, as they were asking for feedback in 2023.

It would be great to get other people's thoughts on this as well. Thanks!

theville32

I have found this weblink on the Bounce Back Loans: https://www.businessrescueexpert.co.uk/bounce-back-loans-and-liquidation-what-happens-next/

One point that I also recall the Business Debtline also mentioning, was that "The bounce back loan was security and personal guarantee free which means that lenders don’t have any physical security over it". 

However, it is a little scary when they then go on to mention this: "That doesn’t mean that they won’t take the matter seriously – they will.  They will use their usual collection methods and systems including payment reminders and demands which will escalate (once temporary restrictions are lifted) into potential court action and the use of bailiffs if the debt isn’t eventually settled". 

I have also found this link, which is interesting reading as well: https://www.gov.uk/government/publications/voluntary-repayment-scheme-for-bounce-back-loans-guide/voluntary-repayment-scheme-for-bounce-back-loans-guide

I am wondering if this is one debt that I might have to consider continuing to try and pay? I obviously don't want to to be taken to court or have Bailifs coming around to my home. Any help and thoughts greatly appreciated.

SpireCaptain

theville32 said:

I have found this weblink on the Bounce Back Loans: https://www.businessrescueexpert.co.uk/bounce-back-loans-and-liquidation-what-happens-next/

One point that I also recall the Business Debtline also mentioning, was that "The bounce back loan was security and personal guarantee free which means that lenders don’t have any physical security over it". 

However, it is a little scary when they then go on to mention this: "That doesn’t mean that they won’t take the matter seriously – they will.  They will use their usual collection methods and systems including payment reminders and demands which will escalate (once temporary restrictions are lifted) into potential court action and the use of bailiffs if the debt isn’t eventually settled". 

I have also found this link, which is interesting reading as well: https://www.gov.uk/government/publications/voluntary-repayment-scheme-for-bounce-back-loans-guide/voluntary-repayment-scheme-for-bounce-back-loans-guide

I am wondering if this is one debt that I might have to consider continuing to try and pay? I obviously don't want to to be taken to court or have Bailifs coming around to my home. Any help and thoughts greatly appreciated.

When I was doing some research before Christmas ni bookmarked this forum and discussion. Granted it's from Insolvency of Ltd. Companies but it's interesting to see they can't strike off their company whilst having an outstanding BBL as the Government hasn't agreed to guarantee and wipe out the defaulted loans yet. And it may seemingly be years yet. That's sort of made my mind up to continue to pay it. It doesn't show on my credit file (not does my business account overdraft) so if I continue to service it, at least I won't be seen to favour one lender over another. 

It was taken out yo consolidate debt but it just ended up doubling my debt. At least the interest is still so low and I've got one more 6 months capital repayment holiday to kick the van further down the line. 

https://www.ukbusinessforums.co.uk/threads/bounce-back-loan-advice-needed.428051/

Thank you for telling me about your direct debit servicing. I realised after I posted it I could also see it in regular payments and have the option to cancel. I got confused as what I couldn't see and it's the bank account fee and overdraft interest I can't search for so have to totally it all up through statements for my tax return. 

theville32

I have just received a text from LLoyds Credit Cards, after I recently cancelled their Direct Debit for the minimum payment. 

They are saying that if I do not pay the minimum payment by tomorrow, then they will charge a fee of £12.00. 

Is this normal and something I should be expecting from all my Credit Cards eg MBNA, Halifax, Nationwide and Barclays. 

This whole process has been a bit scary and I guess I am at the start of receiving lots of generic messages from everyone. Thanks for any help and advice you can give me.

curlu

https://forums.moneysavingexpert.com/discussion/comment/81858469#Comment_81858469

Yes, credit cards all charge a late payment fee. As you are not planning to pay, I imagine the charges will just continue to accrue and get added to your balance. I’m not sure are what point interest and charges get stopped. As you know I’m in the same boat as you in terms of just having started on my journey.

Interestingly one of my loan companies said that it wasn’t a given that interest and charges would be stopped under a DMP, so I’d be interested to know others experiences. They were trying to refinance my loan over a longer period to persuade me not to include them in a DMP so were probably trying to scare me.

theville32

I finally got through to Business Debtline this morning. It seems the best time to call is early in the morning if anyone else is having trouble contacting them.

I must say they were really good and the call was very reassuring. With regads to the Business Debt they had this to say:

Barclays Business Credit Card. I read out the line in the T&C's that said the credit agreement was regulated by the Consumer Credit Act 1974. He agreed that this card would then be dealt with in the same way as personal non-priorty debt. He also said that the big high street banks have reputations to uphold and will generally behave in a similar way to non-priority personal debt.

Barclays Bounce Back Loan (BBL): He said it was extremely rare for them to push for Bankruptcy. Will careful management of the debt, he thought I could avoid any CCJ's etc. With BBL's, the banks don't sell the debt on to debt collectors. However, they do use them to try and recover the money owed. Eventually it is likely they will stop contacting us and give up as the debt if deemed unrecoverable.

The takeaway was to treat all personal and business debts in the same way and bundle them together.

Careful management of all debt is required to avoid the situation escalating and court action/CCJ's.

He pointed out that when/if we stop paying, banks may look to freeze access to overdrafts and look to close accounts. Especially with a Bounce Back Loan, they will look to close the associated account. He also warned that Banks may use their "Right to set-off' clause, which enables them to take money from your account to pay any outstanding debts/missed payments. This is the reason why it is important to change banks to a banking group that you do not owe money too. I know some of this has been mentioned on here before.

One thing he did suggest to do was to call all of my Credit Card / Barclays Bounce Back Loan companies and ask them to put a "Hold Action" on each account. Saying I was having financial difficulties and asking them to freeze interest/penalty payments etc. He said this would give me time to put a budget together for Business Debtline and work out a plan.

I wondered what other members thought of this approach though? I was worried that this might delay the companies Defaulting my accounts, which I understand is the goal eg the sooner they Default my accounts, the sooner I will be able to clear my credit rating.

If anyone has any questions about the Business Debt, I would be happy to pass on what I was told. However, I would advise on calling Business Debtline yourselves to get personal feedback on your own situation.

Any help greatly appreciated as always.

sourcrates

£12 is the standard late payment/over limit charge, that a bank can charge you.

As long as you are behind with your payments, they will charge you this, on a monthly basis, they will refer to it as a "default sums in arrears charge" and this will continue on all card accounts until the debts actually default usually after 6 missed payments.

Look at the T`s & C`s of your credit card accounts and the charges are all listed, as well as the actions creditors can take, so non of this should be scary, or come as any shock to you, its simply a process that you must go through to get a default.