Affordability complaints & DMP

ManyWays

Get the bank statements, it is hard to win affordability complaints without them. your wage slips do not help much.

Karonher

I have just Googled "how far back do banks have to be able to provide statements?" and the majority of them are saying 7 years, so unless you have copies, you may stuggle to go back 13/14 years.

ManyWays

I think banks need to keep the records for 6 years (no idea why google thinks 7), but some banks keep them much longer. The Lloyds banking group can go back much further, and TSB may be the same. Also Barclays sometimes.

Totalnumpty

Just to clarify, I just stop paying, ignore them and wait for defaults. There is no recourse for legal action (however rare) prior to a default. Then deal with whomever sends me letters saying pay up? I have 11 creditors so that part should be fun.

Thanks for your help on here, for years I have been trying to find a way out of this constant stream of robbing Peter to pay Paul, and didn't think there was anything that would'nt involve bailiffs and I didn't want to put my kids through that. The knowledge and experience (I hope) of people on here has opened my eyes to the options, and instead of feeling fearful and anxious, i'm actually feeling a bit defiant and excited. They need to make this information more widely available.

RAS

Good.

Makes sure accommodation, other secured debt and CT are paid. Do you have any Credit Union debts?

Transfer the money you are not spending on debt repayments into an instant access savings account, possibly an ISA. You need an emergency fund when I have you can't access credit.

They can't commence legal proceedings without registering a default. It's important that you open letters because once a default is issued they can send a Letter before Action, which has a form that needs to be returned. Come back here if you get one.

Totalnumpty

I'm assuming if I set up a payment plan prior to this letter but following a default that this is unlikely. Or is it practice to offer a payment plan once this letter arrives?

ManyWays

If you get a Letter Before Action come back and ask here what to do immediately!

RAS

Once you receive a default the creditor may sell the debt on, assign to a debt collector or keep in house, the last being least likely.

They should write and tell you if it's sold or assigned and thousands of debts being transferred but when you've got two computer systems not synchronising, the first may be a letter from new creditor. If the letter refers to "our client", or on behalf of, it's assigned.

Whatever, there will be an account or reference number and usually details of the account into which to pay. Remember secured debt, HMRC and CT are much higher priority. You can the consumer debt on-line or set up a standing order. Make sure you include the account or reference number.

Make sure you've got a decent emergency fund, and in the first instance pay less than you can afford, saving the rest until you've lived with your budget for a while. Save the extra in separate account so it doesn't get mixed up with living costs. Once you are confident in the budget, you can make one off payments or even settle a small debt.

sourcrates

When you sign a credit agreement, both you and the lender are bound by it.

So should you stop paying the debt, that sets into motion the process of defaulting that account.

There are certain guidelines set out by the consumer credit act, and approved by the FCA, that must be followed during this process, guidance states a default can be registered after between 3&6 contractual repayments have been missed, in practice this can vary lender to lender.

Once a default notice has been sent, under sec 87(1) CCA, and the 14 daytime limit has expired, the lender can officially default the account, and register said default on your credit file, where it will show as "in default" "D" status for 6 years regardless of anything else that happens, paid or unpaid.

At this point the lender has options on what to do, they can sell the debt to a 3rd party, they can assign it to a collector, they can manage it themselves, or they could start legal action to recover the balance.

Usually it will be sold or assigned to a debt collector, whatever happens, the creditor will write to you and tell you what is happening, don`t expect this to be lightening quick either, debt collection is a long term affair, and can go on for many years, debt buyers/collectors always start by sending the first of their range of collection letters, this can go on for a year, even longer in a lot of cases.

One letter you should take notice of and look out for, is a "letter before action", a prelude to legal action, that one you must respond too if you get one, action through the courts is usually reserved for much later in the process, if at all, its not something you should fear, but most people don`t want the added CCJ, so best to respond quickly to it all the same.

Just to add, you don`t actually attend court, its all done online and by post, and is simply a way of securing a payment arrangement via a CCJ, so you should not worry or be afraid of the process, it can be avoided if you respond early enough, but its not the end of the world if you don`t.