Self-Managed DMP - First Contact/Payments to Creditors Advice

Gustygoat

Hi there,

Just after some brief advice having recently embarked on a self-managed DMP due to a big change in personal circumstances and large uptick in outgoings due to needing a second address.

Am in the process of half a dozen loans/credit cards being defaulted, sold, managed by third parties etc, having stopped all payments in Q3 last year.

The three largest debts are all 7-8k each and one is now with PRA Group, another with Cabot Financial and a third with Wescot - who are acting on behalf of debt owner Tesco. All three are fairly recent so CCA route likely closed for now, and irresponsible lending complaints lost at the FOS.

To date, I've ignored all texts/emails/calls and letters via snail mail, though appreciate token payments of £1-5 per month will need to commence soon given I can't let them proceed to legal action for work reasons.

I'm not overly concerned about Wescot as reading this forum they'll simply bounce it back to Tesco further down the line, but I'm trying to figure out the best way to interact with PRA and Cabot.

I have no desire to share financial details or speak to them AT ALL, so would like to simply set up a standing order and try and "buy some time" in the hope my financial situation improves in due course.

In the past week, PRA and Wescot appear to be trying to get me to bite with correspondence saying time limited "discounts may be available and to contact them to discuss".

I assume this is simply bait and that any discount would likely be 5-10%. Even a 50% discount would not be manageable just yet, but perhaps later in the year that could be an option if the old family home is sold.

Has anyone any experience of such offers? (Especially PRA who are known to be very stingy).

For background, I was on a DMP via Payplan many, many moons ago but those debts were far smaller and not handled by PRA or Cabot, so am just trying to determine my best approach; ideally small monthly payments with no further interaction.

Thanks for reading.

GG

Rob5342

Yes it's not likely to be a big discount at this point, they just just want to get you to engage. They will have bought the debt for something like 10% of its value but will try and make out that offering 5% or 10% off is very generous of them.

All you need to do is set up a standing order and send them an email explaining what you are doing.

Gustygoat

Hello again,

So, rather a surprising update on this matter as I have this week received a near 70% "time-limited" discount offer from PRA to settle one of my larger debts.

There were no previous offers of 5%, 10%, 20% etc, so am rather shocked at this initial discount given their fierce reputation for legal action and tightness when it comes to F&F settlements.

The debt is relatively recent (credit card taken out about six years ago) so I assumed all the paperwork would be correct. However, I'm now wondering if that's not the case and I need to file a CCA request sooner rather than later.

Has anyone experience of receiving such a "generous" settlement offer from these guys and any view on whether there might be room for further negotiation?

For background, I've yet to engage with any of my creditors.

Thanks,

GG

Grumpelstiltskin

My first thoughts would be they know something is not correct with the debt, as they don't usually jump in with such a large opening offer. Yes ask for a CCA, no reason not to.

ManyWays

Do you have the money to settle this? If you do not, then it is all a bit irrelevant.

RAS

Someone recently suggested on here that PRA are a bit stressed recently, so may be more inclined to make better offers. Do make sure they agree in writing to mark the debt as settled and not to sell it on.

sourcrates

PRA Group have been struggling with "increased legal expenses" of late, and suffered a downgrade in their fitch credit rating, due to cashflow issues caused by weaker than expected collection efficiency on their debt funded portfolio purchases.

Basically they are haemorrhaging cash, overspent on buying debts, and not bringing in enough returns.

A 70% discount from PRA would have been unheard of a few weeks ago.

Gustygoat

https://forums.moneysavingexpert.com/discussion/comment/81964479#Comment_81964479

Interesting, thanks Sourcrates. That certainly would explain why such a discount arrived out of the blue.

I was able to haggle them down even further (will post full details on this thread once the F&F payment - have deleted total below - is made later today).

Before I contact them, I assume this wording is fine from a legal POV?

"We are happy to accept £XXXX to clear the balance on this account. Paying this amount will be accepted as a full and final settlement on the account, which means, once we’ve received your payment, your account will be closed and we will not contact you again about it."

Cheers,

GG

SPM87

why are you in a rush to pay them?

ManyWays

"We are happy to accept £XXXX to clear the balance on this account. Paying this amount will be accepted as a full and final settlement on the account, which means, once we’ve received your payment, your account will be closed and we will not contact you again about it."

that wording looks fine to me

Gustygoat

https://forums.moneysavingexpert.com/discussion/comment/81966880#Comment_81966880

Thanks, MW.

I've settled the account for a discount of just over 81%.

As above, their initial offer that came out of nowhere was 65%, and then via a short call I managed to negotiate slightly beyond my absolute best-case scenario of 75-80%.

If I was younger, in better health and had the time and energy, I would certainly have pursued the CCA route as I did for all my older debts that will be S/B next year. However, life right now is very, very chaotic for various reasons and a small gift from a family member has allowed me to banish this large debt for good.

Having spent a lot of/too much time on forums and websites such as this for the best part of a decade, PRA was the one shark I was most worried about, so I'm going to sleep a lot easier tonight knowing I've reached an agreement that was better than I dared dream.

I appreciate others may have a different view, but I didn't want to be (again!) having to watch the letterbox and dodging/blocking calls and texts for the next 6-7 years while also looking out for a backdoor CCJ that would have put my job at risk.

As before, the debt was relatively recent - it was actually nearly £13,000 at one point before MBNA upheld my irresponsible lending complaint and removed almost £5,000 in interest and charges - so I was not overly confident on choosing the CCA path. It will be recorded on my credit report as "partially satisfied".

I hope this post helps others who have debts with PRA to negotiate more favourable settlements. Despite their reputation, I found them pleasant and professional, especially when compared to the likes of Lowell who refuse to entertain any counter offers without a full income and expenditure inquisition.

Anyway, one down, seven left to go.

GG