Token payments to DPC's pro's and con's

exponential

Hi all.

A few of you may be aware of my situation as follows:

Cabot - Fluid 2681.2
Cabot - Marbles 5737.45
Cabot - Halifax 6050.42
Lowell - Lloyds Bank 16012.2
Lowell - Capital One 7804.2
Lowell - Virgin Money 7448.09
Lowell - Lloyds Group 4723.96
Lowell - Lloyds Group 533.58
Lowell - Lloyds Group 530.62
Link - BoS 3635.38

Unsecured Debt totals 55157.1

Monthly income: £3800

Monthly Expenditure £3750 - £3850

I have been in regular communication with the above for a number of months now since my original accounts defaulted last August.
Keeping up with the continual letters is becoming tiresome and I'm thinking I should just offer a token payment of £1 per month to each account to get them off my back and ease some of the pressure so I can get on with my life and feel normal again.

Will this be accepted and if so, what is the long-term outcome likely to be?

ManyWays

You have started a lot of threads so it is not easy to see the full picture at a glance.

Have you made affordability complaints about the debts?
Is there any equity in the house now?

It is hard to predict when a debt collector will happily take a £1 offer, especially when the balance is large. Some will, some will not. And some will and then push for more in a few years and then look at going to court for a CCJ.

exponential

Yeah, I've been worrying at every turn so probably have been asking too many questions to be fair!

What are affordability complaints? I'll have to look into what those are.
I would imagine there is some equity in the house as house prices have increased considerably over the years but getting access to the equity is another thing altogether.
My credit rating is now up the wall and my wife is unable to work so being approved for a re-mortgage is out of the question.

Plus, even if it was something that we could do, substantially increasing my secured debt to pay off unsecured debt probably isn't the best thing to do.

I'm not shying away from my responsibilities and want to make some sort of payment if it's an affordable amount but I don't want to open pandora's box either in doing so.

I hope that made sense?

SpireCaptain

I lost track of all the threads also but has an IVA been ruled out to protect your house? Or even a DRO if you have less than £75 left spare but you'd need to somehow get your debts under £50k to apply.

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/81974980#Comment_81974980

Unfortunately DRO`s are not available to homeowners, an IVA might have been an option, but currently the OP does not have sufficient disposable income to make monthly payments with, so no debt solution is currently open to them.

Token payments are not worth bothering with, if you can`t afford anything by way of monthly payments, its better to say so, and pay nothing, rather than a token £1 a month, as under those circumstances, non of your debts will ever become statute barred.

The £1 per month would reset the limitation period with every payment made, so not a good idea, and it wouldn`t make any difference as to whether any lenders decided to take action through the courts or not either.

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/81975030#Comment_81975030

Oh yes, apologies about that, my mistake. Had a brain fade about the DRO. Not available to me either unfortunately so should've realised the same for OP.

exponential

Yeah, as you have all said, anything to do with insolvency is not on the table at all.

I just want a break from all the letters as it's becoming hard to mentally cope with it all.

So to summarise my position, the following has recently occurred after sending an accurate SoA to all parties as stated above:

Lowell responded with a letter with the heading "Tell us how much you can afford to pay" and at the bottom of the letter states "we may instruct debt collection agencies". This is the first letter from Lowell that has even the slightest undertone of potential action.

Mortimer Clarke have given me 35 days to seek advice. This is pointless as I know my position and, as my SoA clearly states, (which they have received) I have no available excess income. I don't know what their next tactic will be from here though. Likely a Letter before Action.

Cabot and Link have been quiet and not yet responded neither have ResolveCall.

sourcrates

Debt collectors standard approach is to hold your account for 30 days, to see if your situation changes.

How much of a change is likely to happen in just 30 days I don`t know, its just the silly game they play.

In your case, a copy of your budget, and an accompanying letter stating, "my situation has not changed" should be your standard response going forward.

Legal action may be a possibility in order to secure the larger 16k debt by way of a charge on your house, I`m not saying that will happen, but you should be prepared for it.

exponential

You would think that the collectors/purchasers would give more time as, like you've said, it would be impossible for a person's circumstances to change so drastically within such a short space of time.

I will continue to send the SoA with each letter to each creditor in the hope that it finally sinks in that we can't afford to pay anything right now.

I don't mid the charging order either to be honest although how enforceable a charging order is on a joint mortgage is something I would question.
I'm more concerned about a CCJ really.

sourcrates

A CCJ is simply the court agreeing you owe the money.

The court, if they can see you can`t afford repayments, could then issue a zero payment order for the deb.

A charging order for a single debtor on a jointly owned property, would only result in a restriction, so nothing to really fret about.

What is it about a court judgement that would be an issue for you?

exponential

https://forums.moneysavingexpert.com/discussion/comment/81976850#Comment_81976850

Ah ok, I see.

A CCJ would affect my ability to trade effectively as I'm self-employed and am required to hold Public Liability and Professional Indemnity as well as hold good financial standing with suppliers for materials.
It would have a massive impact and would likely prevent me trading (or at the very least make it very difficult) which in turn, which could potentially have an impact on income.

If I'm wrong about this then I'll accept that but it's still a worry for me from a financial perspective.