How long can I pay Token £1 a month?

barshamhillbilly

Hi all ,
not sure if this is the right place to post this, as I have only just arrived on the forum.

Have recently reduced my income due to change in job and stress at work, and found that we could not really manage due to one thing and another.
We have really overhaulled our finances and can safely say that I don't think that there is a penny more that we can save or scrimp on.
However, we have had to stop paying our £8000 unsecured loan and the company (Egg) have just accepted a token £1 amonth for the next 6 months, as we just have no money left now. I realise now that we were actually just getting further and further in debt.
I don't really see that we are ever going to be any better off than we are now, with a win on the lottery (which of course I don't do any way!), and I don't have an old rich aunt.
The question is - how long will they keep accepting £1 before they take us to court?
We have a lot of equity in the house, but can not release any, as i don't now earn enough (and of course my credit rating has just exploded)
Any advice / ideas greatfully received.
Thanks
Andy

CCCS_Sarah

Hi Andy,

Welcome to the boards!

There is no set time limit on making token payments so no matter if its 1month or 12months, if that’s all you can pay then stick to that!

Token payments are good if there is going to be a change in your situation but it’s not a long term solution to debt problems, so it maybe worth setting a time limit on token payments and if there has not been a significant change then at maybe worth considering other options.

Have you been to any of the free advice charities for your advice on your debt?

If you have any questions give me a shout

Sarah

barshamhillbilly

Thanks Sarah,
yes we have taken some advice, and have acted as advised and they have accepted the token payment for 6 months.
I was just wondering though, long term if they were going to take me to court sooner or later whether it would be better to get it out of the way now or just hang on as long as we can?
Our finances might change a little in the future, but not much - eg we might be able to make a payment of £10 a month as opposed to the £165 or so we were paying,
It will still take a million years (seems like) to get rid of the debt.
Luckily they have frozen interest, and it is our only debt.

Thanks again
Andy

barshamhillbilly

Sarah,
I forgot to say ... what might the other options you mention be?
No money left at the end of the month for a formal DMP or anything like that ???
Thanks again

CCCS_Sarah

Sorry long one


There are certain routes creditors have to take in what we call the “collection process”. What you need to try and remember the letters they send are there to try and make you pay, so generally are quite strongly worded. They usually use the words MAY or COULD to imply a lot more!

If you are offering any type of reduced payments then a creditor will send Warning letters – these usually go along the lines of “your account has fallen into arrears, please get in touch to bring the account up to date”. As long as you are paying what you can afford you don’t have to respond to these.

After a couple of missed payments – A creditor may issue you with a default notice. This is noting to be worried about, it’s a legal requirement that ends the contract between you and the creditor & will also be a mark on your credit file that will stay there for 6 years.

A creditor could choose to pass the debt onto a Internal or external collections agency – Again nothing to be worried about, if this does happen just change who you are paying and send a new copy of your budget, don’t be pressured into paying anymore.

Eventually a creditor MAY (not always happens) choose to pursue you for a County Court Judgement (CCJ). Again don’t worry! All done through paperwork and it’s and blue and white form. Will ask you for details of your income and expenditure and an offer of repayment, so as long as there is nothing excessive in your budget it will get set at £1 if your budget is the same!

CCCS_Sarah

barshamhillbilly wrote: »

Sarah,
I forgot to say ... what might the other options you mention be?
No money left at the end of the month for a formal DMP or anything like that ???
Thanks again

As I dont have all your details I wouldnt be able to answer that one, sorry. If you want you could call for a appointment and speak to a counsellor our helpline number is 0800 138 1111

barshamhillbilly

Thanks again Sarah,

barshamhillbilly

Sorry - One last one...
If it went to court and we kept up the payment that the court set, nothing else could happen? ... Just to ease my worry (definitely no excessive expenditure in this household! ...well not any more)
Thanks

CCCS_Sarah

If you defaulted on a CCJ the creditor could apply for a charging order to be added to the property. This is a way the creditor can secure the debt against the house, so if you ever did come to sell then you would clear off the debt then.

As long as you keep up with your £1 payments you will be fine I know you have a lot of worries at the moment but after a while it does start to calm down as many people on here will tell you. Just stick to your guns!

chappers

Is this loan your only problem debt and apart from that can you meet all your other monthly commitments long term.
You are half way there having frozen the interest and obviously even at £10 I don't think EGG will wait the 60 odd years to get their money back.
However with a little bit of effort I'm sure you could sort this, any reason why you couldn't get a part time evening job?
Your monthly payment of £165 could pay off your loan in 5 years

£165 per month even at the minimum wage is only about 45 hours so thats 22.5 hours each per month or 5.5 hours per week each.

Do you have any stuff you can sell on ebay etc. Your tat may be someone elses treasure.
You say you gave up your old job , could you go back to a similar line of work, just as atemporary measure to pay off this loan.

Hope this all helps it seems like you are far from a hopeless situation

barshamhillbilly

Hi Chappers
yes - the loan is the only debt (apart from the mortgage on which we are up to date).
Ill health is the reason for the reduction in wages, and I have now found work hours that I can manage and am happy with. So not much chance of more work. I now can manage without trouble, the first time for about 20 years.
Unfortunately most of our stuff came from Freecycle, so not much worth selling really - even the car cost only £375.
We definitely have nothing that would make any impact on the debt whatsoever, even cumulitively.
Will have to have another look at our outgoings I guess?? as incomings are pretty much fixed.
Oh for a rich aunt!