Rollercoaster from debt to debt-free (nearly) and back to debt again!

Garlic_boy

I've had a total rollercoaster this last week and today's been horrible. If you're finding recent events tough then it might make you feel like you're not the only one struggling to hear what's happened to me recently.

Last month I had one more month of repayments until I was debt free. Yes you read that right. Can't tell you how hard and long I've worked for it. Probably about 4 years+ in earnest (paying hundreds p.m.). I've always tried to meet repayments all my life and never knowingly avoided them. Even my tax files were completely up-to-date and for the first year this year I'm dealing with current finances! Like a dream come true!

Then I got a letter about a very old debt of about six thousand pounds (the only one from my past, never really left my mind) and in a panic called the company and agreed a repayment straight away of two hundred pounds p.m.

I have been feeling like a complete idiot about myself since, cursing my stupidity. I believe that by contacting the company I have extended the 6yr period during which the debt is recoverable. Great. I made the arrangement last week and my first payment went out in the last few days.

It just didn't occur to me at the time not to begin to settle the debt when sent a threatening letter because I wasn't thinking straight. I saw the finish line and that I could be debt free, and then paniced when this happened. It was like an old familiar response grabbed me and made me act in a way that I probably realised at the time wasn't sensible.

Years ago I spoke with my Bank about this debt (approx. five thousand) -- it was from my student days -- and never tried to run or even walk away from it. Just because you find yourself in debt it doesn't mean you've necessarily acted badly purposefully. It is a fact that the Bank stopped communicating with me in the first place when I was out of work and we seemed to be in a stalemate situation. I didn't move for some time, and it demonstrates my commitment to resolve the situation as I went back to the same bank. (I needed to find a resolution to what had been a difficult chapter in my life.) Believe it or not they listend and sympathised and agreed to give me a second chance to prove myself. I had no letters chasing the debt. Meanwhile I was having bank statements from the same bank at the same address.

Truth is the bank just stopped writing to me about it (I always imagined because I had a new account with them and we were making a new start). They had every right and opportunity to ask for the money back then but after a few letters it all went silent. My banking manager made a big deal about it being a new start and that the matter was not his concern so I let it go from my mind (it never does fully though). I have operated the new current account for 6 years+ without any problems and have recently relished the prospect of finally being debt free.

Which is why I badly resent this happening now and am struggling to deal with it. I am normally a very calm person but this has made my blue sky grey beecause as I say I've worked very hard for years to get myself back in the black.

Then I went back onto the web and found out from this site and the equally excellent Consumer Action Group site that because the debt (or should I say the date of last contact about this) is 6yrs+ it's outside the 6 year time limit and the company has no right even trying to collect it. (I moved out of my previous address in Nov 2002 and did not have contact with the Bank for some time before this I remember. They had time for sure, I never went away.) This post I'm referring to also mentioned that it's not a disaster to have arranged a financial arrangement until the matter is resolved as it demonstrates at least a willingness to cooperate in getting the matter resolved. (That's what I'm telling myself anyway to make myself feel better! I fear I've opened a can of worms, but it does seem the law is clear and actually on my side.) I've read posts that suggest that I could sort this out in 12 days (plus a couple of days' admin. time) by issuing a CCA request and a harassment by telephone letter and if the organisation defaults (Lowell) then to cancel the direct debit on the 14th day following the documents I will send by registered post.

Hardnered consumer action and money saving heros would never have paid in the first place given that the debt was out-of-date, or even telephoned the company and I was wrong to react the way I did. Let this be a lesson to other people. My initial instinct was to pay because that is the right thing to do (it is after all my debt.), and we all want to do the right thing, but then I remembered all the bank charges that were placed on the account, how nobody would sympathise and help me at the time and I didn't know better, and thought of how I'd acted responsibly by going back to the bank and discussing (including complaining informally about my former treatment!) what happened, and thought about how while they have been good to me since I have kept my promise and my accounts within limits at all times. (Lloyds TSB.) Etcetera. It's in everybody's interest that I am debt. free so that I can spend money again! (But never outside my budget!)

So this really spoiled my day when it happened as you can imagine. I'll post what happens in the forums when I send the CCA and harassment letters (Wednesday) so everybody can see what happens when you take action, if you get anywhere. I have another 28 days before my direct debit fires next and by then this matter will be done and dusted if all operates as I'm told it should (in my dreams probably). I need to ensure that the debt collection organisation have a legal right to collect this debt if I'm going to pay it. And, if I'm going to pay it I don't want to pay it to a DCA. I'll go back to my Bank first and talk to them. So far as I'm concerned it's them I owed the money to.

I'm a newbie, don't really know what I'm talking about, but needed to vent. :-) Look for a post on Wednesday and more to follow. :-) All advice from those who know better is most welcome. If I'm doing the wrong thing I'm hopeful somebody will put their hand up! As I say, I won't post the letters 'til Wednesday.

Here's the post that so inspired me: http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/116041-lowell-debt-collectors-old.html. Have a great day everybody. I'll add to this thread and let you know how it all turns out. Here's crossing my fingers and hoping for the best. I might just hit that deadline of being debt free after all. Just like me to have an eleventh-hour wobble! :-)

R.

P.S. If this works out I'm going to reclaim the PPI insurance I can tell you I was mis-sold by Yes Car Credit (since gone out of business). If anybody has ever used them they'll know customers were told they had to purchase this insurance as they were deemed a poor credit risk. In fact I believe it was fundamental to their business model (as it was for others). I want everybody to know that I have had latent money saving tendencies all my life I'm sure like a lot of people on these forums. I just needs for organisations to stop acting like sharks so we can all live an honest financial life with no blurred barriers. Thanks to Martin those days are dissappearing. For me at least. Time to take back the power. What's the worst that can happen now?

Garlic_boy

Update: I've just read that you can't issue a CCA request when it's related to a current account. Or rather you can, but there is a strong possibility a bank will fob you off, saying their terms of conditions are implied by common law or similar, as they know they don't have to comply. This looks like very bad news and could be a fatal blow to my case before it's even started.

If the burden of proof is on the DCA, how come you can't request that they produce the original documents showing dates/times/amounts, etc. to verify the debt is legally collectable I wonder? I can't seem to find out what the proper rout is when current accounts are involved. I have a suspicion that what seemed straightforward at first glance is not straightforward when you're talking about current accounts. I have read a lot of posts and it's taken a while to notice this very important detail!

Can anybody tell me have I completely blown it by corresponding with this company, am I right about the CCA not applying to current accounts? And how do I prove this debt is too old, if indeed the burden of proof is on me? Or does anybody know if it's still going to be possible for me to demonstrate that this debt is more than 6 years old?

One last thought, when I spoke to the DCA they told me to take the matter up with Lloyds TSB if I had a problem. At the time I thought little of the statement but I wonder if this is an avenue I can pursue to demonstrate that this debt is older than 6 years. This might be a stupid question but how come they're referring me to Lloyds if they're claiming to own my debt? It seems to me these companies live off obfuscation. (It's their debt now, but they don't know and can't do anything about it seems to sum it up. A weird sort of limbo I now find myself in. As no doubt to countless others.)

Aaaargh! The subject name for this post is right. Rollercoaster! Advice most welcome. Thanks to all here, really appreciate the help this forum provides.