Meeting with the bank tomorrow

seh567 · 4 June 2009 at 8:58PM

Hi, my son is in financial difficulties because he has no work, no savings and approx £15k in debt. I don't think he will find work in the short term as he was a suspended ceiling fixer in the building trade and he is having no luck in finding work in this field and unfortunately has no experience in other types of work.

He has signed on for Jobseekers, housing benefit & CTB. Spoke to CCCS yesterday, have given them income/expenditure based on benefits (not yet being paid). They gave us a reference and he has an interview with a counsellor on 17th July 09. In the meantime they told him to contact all creditors offering £1 token payment. He has written token payment letters to credit card - Barclaycard and Egg and personal loans with A & L and Nationwide, not sure if we should include Statement of Accounts at this stage because it shows that he has minus £95 left over each month. They are written and the £1 cheques (made out from my bank account) enclosed but not posted yet.

Because he has a £3k overdraft with Natwest bank he decided to face them because he was advised to cancel his DD's and set up a basic account with another bank, however they want him to have an interview tomorrow morning to discuss a payment plan and told him not to cancel the DD's because the creditors would just reinstate them again if he did not inform them of his situation. I am worried that they are going to pressurise him into coming to an agreement which he can't fulfil and he also needs to be seen to be fair to the other creditors, any advise as to how to handle this situation would be appreciated.

I am also worried that when he has his interview with CCCS that his situation has not changed therefore not being in a position to have extra income for a debt management plan which we were hoping would be the answer. Because of this I would be willing to give him £200 per month against a DMP or give him a lump sum of £5k to use to make offers of full & final settlements. Does anyone know if CCCS would agree to this for a DMP managed by them or would they assist us with the full & final settlement negotiations.

10past6 · 4 June 2009 at 9:22PM

seh567 wrote: »

however they want him to have an interview tomorrow morning to discuss a payment plan and told him not to cancel the DD's because the creditors would just reinstate them again if he did not inform them of his situation

Baloney, no company can set up a DD without the authorization of the account holder, I’d be tempted to cancel the interview as they may well try and talk him into a consolidation loan.

Out of interest, have you considered a DRO? take a look here

seh567 · 4 June 2009 at 10:32PM

Hi, yes we did think about a DRO but he has a car worth £1500 which he says he can't do without. Did think about buying it off him but letting him still use it although I'm not sure his insurance would let him continue if he was not the registered keeper. Also his debt is just above £15k limit, do you know if we would need to include all his debts?

Thanks for the advice about the bank and DD's I thought that was the case as well as the customer would have to sign another dd mandate I guess. Don't want to cancel the interview as he wants them to agree to token payment whilst we wait for CCCS interview. He won't be talked into a consolidation loan as it would be toploaded with interest I would think. I have a small mortgage (Nationwide) outstanding but I have an overpayment reserve of £15k which I can draw on at anytime currently at 2.5%. I don't want to use all of this but as previously stated I could draw down £5k for full/final settlement.

10past6 · 4 June 2009 at 10:37PM

He should include all his debts whether entering into a DMP / DRO.

If you purchased the car, could he be a named driver?

One other point, if you're willing, and have the funds availabke, have you considered making F&F offers?

seh567 · 4 June 2009 at 10:51PM

I am willing to give him £5k for full & final settlements which is approx 30% of the debt value. I could give him the whole £15k but I am a pensioner and I have to think about my situation. I have the funds but it would have to come out of my hard earned savings and I don't want to end up in debt myself in the future. Are the creditors likely to accept this at this moment in time. Up to now he has not defaulted on a payment but he is about to anytime now because he has no work or savings. I've been reading on the forum that full & final settlements are not usually granted until the debt is sold to a debt collection agency. I have been funding his debts for a few months now but I have to draw the line at some point.

10past6 · 4 June 2009 at 10:55PM

It's best if you / he make a CCA request for each debt asap (Depending on the debt) using the template letter below.

Depending whether the creditors have a VALID CCA to produce, will depend on what F&F offer you / he makes, use this letter:

Dear Sir/Madam

Re:− Account/Reference Number: XXXXXXXXX

With reference to the above agreement, I would be grateful if you would send me a copy of this credit agreement.

I understand that under the Consumer Credit Act 1974 (Sections 77−79), I am entitled to receive a copy of our credit agreement on request.

I enclose a payment of £1.00 which represents the fee payable under the Consumer Credit Act.

I understand a copy of my credit agreement should be supplied within 12 working days.

I understand that under the Consumer Credit Act creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under these sections of the Act.

I look forward to hearing from you.

Yours faithfully

PRINT ONLY - DON'T SIGN

seh567 · 4 June 2009 at 11:09PM

He has already sent this letter to Egg Credit card because he wanted to dispute the PPI insurance but he could not find the agreement copy. Not had a reply yet and the 12 days is almost up. What is the outcome if they don't reply within 12+2 days?

With the others should I send this letter with the request for token payment or separately. I still would also like to know if I should send a SOA with the token payments at this stage. Thanks

10past6 · 4 June 2009 at 11:12PM

seh567 wrote: »

He has already sent this letter to Egg Credit card because he wanted to dispute the PPI insurance but he could not find the agreement copy. Not had a reply yet and the 12 days is almost up. What is the outcome if they don't reply within 12+2 days?

Come back and post once the 12+2 days have passed

With the others should I send this letter with the request for token payment or separately

Just the letter alone

I still would also like to know if I should send a SOA with the token payments at this stage. Thanks

Normally I say no, it's your choice, you're under NO legal obligation to issue an I&E to anyone other than a court.

seh567 · 4 June 2009 at 11:13PM

Thankyou so much for the information 10past6. I'll keep you posted.

seh567 · 5 June 2009 at 11:03PM

Went to the bank today. Cancelled debt dd,s they advised him to ring services before cancelling relevant dd,s. They haven't closed the account because his overdraft was still within the limit so advised not to spend but just ensure a small monthly payment was received to cover charges. Said he'd done the right thing going to CCCS and wait to see the outcome of the counselling interview. Couldn,t offer loan to cover overdraft because he isn't working and earning a wage but that could be an option when he gets a job. Didn't tell them he has set up a basic bank account elsewhere to receive benefits, etc. Not sure how to proceed with the bank from now on though. Have sent letters to the other credits offering £1 token payments and included the payments, didn't include I/E sheet. Will be sending CAA letters to each over the weekend. Is there anything else I need to be doing before my CCCS meeting in July?

seh567 · 6 June 2009 at 9:04PM

I'm worried we did not send SOA with the offer of £1 token payments letters, is this ok

Meeting with the bank tomorrow

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