Credit Card Blues -

Wilbering

I've decided to post this message here, but it also appears in the "Loans Section of this Forum"

In 2001 I secured a loan from an bank. Although the amount was for £5000, this included the consolidation of an existing loan of £1500 (plus interest payable over the full term of that loan) and a retail credit account (plus interest payable over the full term of the repayment plan), and accordingly I only received around £2000 in cash.

Sadly, I was forced to quit my job in May 2002, and overnight this £5000 loan turned into a £8000 debt, as the bank added the interest I would have paid over the full term of the loan (54 weeks). That said, the bank was kind enough to let me pay off this amount at £1 per month, until I sorted myself out.

Question: how can I reduce the level of debt, not the actual physical monies owed, but the interest upon interest owed, and why am I force to pay back insurance, beyond the date at which my loan was suspended – with an additional £600 being added to my debt.

Credit Protection Insurance


I paid Credit Protection Insurance of £11.14 per month. But this wasn’t money I paid them each month from my own pocket (wages). No, this was in the form of an additional ‘loan’, which paid the insurance. The total amount over 54 months was £372.82, but I paid interest on this amount of £228.74. That’s a total of £602.56. Despite defaulting on the loan, why am I force to pay for insurance I didn’t claim on for the entire 54 months?

Credit Card


At the same time I received this £5000 (£2000) loan, the bank also sent me a credit card, which I did not ask for (I didn’t sign any application form). The credit limit was £500, and foolishly I signed the back. That £500 credit card turned into an additional £780 worth of debt, which is also being paid back at £1 per month. That is until the debt was recently sold to a debt collecting agency.

The other day, they telephone me to say that they were no longer willing to accept £1 per month. I said that I am still in receipt of Job Seekers Allowance, and due to by other debts totally £12k, I was willing to continue paying them £1 per month. They refused to accept my offer. I offered to send them proof of benefits and a financial statement, but they insisted that I pay them, £3 per month.

My understanding is that if I agree to this higher amount, in a few months, they will demand more and more and more. Taking advice from the CAB, I’m sticking to this amount of £1 per month.

I have only put the phone down on two people in my life – my sister back in 1996 and the aforementioned person from this debt collecting agency. I’m so angry, because my agreement was with this bank and not with some money grabbing debt collector. I also have a problem knowing that the bank has written off this debt – selling it off for a fraction of its worth, yet the debt collector is demanding the full amount. This is morally wrong.

Now considering, that I didn’t ask them to buy this debt, and considering that I owe other people money, and considering I might have them over a barrel, in that I didn’t actually apply for this credit card in the first place, what can I do to sort out this problem?

Now I know I owe people money. I have no problem with that, and when I am able to pay them back I will, but I’ll be damned if I’m going to be dictating to by some debt collecting Nazi. I owe a lot of people money and I will pay back what I owe, but my views have changed. Being unemployed at the bottom of the social pile isn’t fun. I know that if I finally secure a paid job it will be for minimum wage, and that any excess, beyond my current level of income will go towards paying off my debts, I find life demoralising.

Can anyone suggest a solution/s to my problem/s? I also owe the NatWest around £50 and HSBC around £80. In both cases, I paid enough in bank charges, which if reclaimed would probably write off these debts. Capitol One, I owe them around £500 on a credit card, with a £200 limit. Overall, I would imagine that 50% of the total amount I owe is made up of interest and charges. That’s £6k, and I have enough on my plate without dealing with this stress inducting debt.

Regarding the credit card, I’m worried that if I contact the bank, they might forge the paperwork, or claim that it’s been lost. What do I do?

Best Wishes

Wilbering

Bokkens

Wowa too long for me to read.Just kidding,

"I’m worried that if I contact the bank, they might forge the paperwork"
You need to contact you bank and sort it out.
Banks may have high charges but they are not into forgery,your talking about the UK here not Columbia.
You are doing the right thing keep in contact with the CAB and ask them the questions you are asking here and get the answers form them ,get them to make an action plan for the coming month and stick to it like glue after that is should become easier to stick with the plan,it won't be easy but if you want a better life then you have to work at it.
Check you are getting the correct benefits are there any courses that you can do and that pay get stuck in and life will improve.
Life can be demoralising shift over to the Debt Free Wannabe forum and get some insiration from their efforts and have a chat with them.
Good luck