Your views and questions.

Moderators: TalbotWoods, JaneClack

By NottinghamRed
#258863 Hi,
I have recently been using the letter templates on the National Debtline website in order to contact my creditors to try and arrange a DMP as i am struggling with the current mimimum payments.
I have included an income / expenditure sheet and then pro-rotaed my excess income to make an offer to each of my 7 creditors. I have also asked that interest / charges be frozen.
2 of the 'creditors' are family members and dont have any issues (theyve just said to pay what i can afford), while another 4 of them have accepted my offer (for periods varying between 3 and 6 months). However i am having problems with the final creditor Shop Direct Finance (Very).
They responded to my first letter by saying they couldnt accept my offer and to contact them by phone - i did this and was told they couldnt accept my offer nor freeze interest unless i went through CCCS and obtained a reference number. I explained i didnt see the point in getting a 3rd part to re-send the letters i had sent and that i was attempting to sort out a DMP myself. Again they wouldnt budge and said the least they could accept was £87.00 per month (£34 more than my offer) - APR would also still be added at a high rate.
I then sent a 2nd letter (from National Debtline site) explaining that my other creditors had accepted my offer, and how i had calculated the offer to my creditors and asked them to reconsider. I also said i would still make the payment of £53 i had proposed on the 22/04/11 as a sign of goodwill.
However this morning in reply to my 2nd letter i have recieved the exact same letter i got in reply to my first letter (ive no intention of phoning them this time) - and was just wondering where to go from here, and would appreciate advice on the following points

- Looking on the National debtline website the next letter would appear to be one saying im stopping all payments and inviting them to take me to court. Is this what you guys would recommend?

- Should i still make the 'goodwill' payment of £53 on 22/04/11 i said i was going to make in my 2nd letter? (if ive said i am going to make it and dont would it look bad should it get to court?)

- Are they likely to actually take me to court or would they pass the debt on to a collection agency? and if they did this would i need to start the letter process again with the collection agency? Do collection agencys add interest?

Sorry about the long winded post and thanks in advance.

By chandjay
#258913 Hi NottsRed,
The very first question that you need to answer is DO YOU HAVE ASSETS.
Creditors/DCA's act differently depending on whether you have assets or not.
We will be able to answer your questions better if you can let us know you're total debt and whether you have assets.
Again, creditors/DCA's act differently depending on the length of time it will take to repay your debt.(Hence why the total is req'd for better advice).
The more information that you can give the better.
By NottinghamRed
#258943 My total debt to creditors outside of the money owed to family is around 6k, give or take a couple of quid.
I do not have any assets whatsoever (no car, my property is rented)
By chandjay
#258973 Hi NottsRed,
Your debt problem is interesting because you are in a good position, yet at the same time you are in a bad position.

The good news is that you have no assets and you don't appear to owe much money(you don't say how much you owe your family).

The bad news is because you don't owe much money, there is a very realistic chance of your creditors getting their money back... let me explain :-

Daft as what it may seem - with no assets - the more that you owe, the better position you are in.
This is because a creditor will not throw good money after bad in obtaining a CCJ, because they know that they will NEVER get their court costs back.... BUT .... in your case, if you refuse to pay your creditor, he may well take you to court to obtain a CCJ, because the creditor will know that he will get his money back(sooner or later) plus the court costs - and you're more likely to keep the court payments up(you won't want to risk bailiffs, etc).

You can certainly do your own DMP, and if £53 a month is all that you can afford to pay Shop Direct, then £53 is all that you pay. DO NOT PAY ONE PENNY MORE THAN YOU CAN AFFORD.

Personally, I wouldn't be too bothered in the short term about the added "interest".
I would get your DMP up and running for a couple of months, and then when it's running smoothly, I would put the squeeze on your creditor(Shop Direct) who is adding interest. (There are ways !!).
The trouble is, in a DMP there is nothing to stop your creditor adding "interest."

It's always better when a creditor passes the debt to a DCA, and it's even better when it is SOLD to a DCA, but in your case, in view of what you are paying back to your creditors(£53 to Shop Direct, God knows what else to your others)and what you owe ( £6k ), I think that it will not be passed on any time soon (if at all).

So to sum up :-
You are in a good position because you ONLY owe £6k.
You are in a bad position because you ONLY owe £6k.

Honestly, I'm not trying to be funny - It's true.

You could, of course, let CCCS do all the work for you(it's free), which MAY eliminate the problems that you are having with the awkward creditor(Shop Direct)
P.S. I do my own DMP.
User avatar
By DuffNCustard
#259003 If your main objective is to get your payment offer accepted then you've got nothing to lose by doing it via the CCCS - they sorted my 'financials' out a treat - big happy smiles all round all debts now cleared. They will decide just exactly how much each creditor gets out of a total payment that is based on your realistic needs - no money for Hines cognac or beluga caviar but a bottle of grouse and a pot of Shiphams finest sardine and tomato - no problemo!

On the other hand if you are intent on rogering some of the worst of your creditors then with no assets you have the whip hand and can Do A Chandjay - he's (ahem) IMHO the finest Debt Meister on this forum and somehow contrives to sleep on mattress stuffed with moolah, whoop it up on the costas and adroitly skewer with clinical precision a bunch of the most nefarious creditors known to man!
By chandjay
#259033 ......with no assets you have the whip hand

That's the trouble, D & C, with Nottingham Red only owing a relatively small amount, and paying a reasonable amount back every month, then I'm not sure that N.R. has the whip hand.
By NottinghamRed
#259063 Thanks for your replies.
Just to give you more detail (didnt include in first post as i thought it was long enough). The money i owe is as follows:

Family1: £2,400
Family2: £500
Shop Direct (very): £2,700
Argos: £1,400
Santander: £1,140
Next: £300
Sainsburys bank: £400

I did consider using CCCS but just thought that as i am (supposedly!!) fairly intelligent and dont really get stressed that i would do it myself - i also wasnt sure if CCCS would include family debts.
I understand that from reading the forum there is others who are in much worse positons myself, and indeed someone away from the forum has also said what chandjay has said about it being good and bad that my debt (away from family) is only £6000 but i figured that is was probably better now to nip it in the bud before it got worse.
Personally i have no issues should Shop Direct decide to take me to court and get a CCJ against me, at least this way they would have to take £53 per month and no interest would be added. This is why i wondered if it was best to invite them to do this?
By chandjay
#259083 Hi NottinghamRed,
First off, you're right. Nip it in the bud before it gets out of hand. I was £72k in debt before the penny dropped, and by then it was way, way too late.

Secondly, I know what you are saying about using the "Take me to court then, and we'll let the Judge decide" option, but the trouble is that Shop Direct might bloody well just do that, and really, it is best if you can stay clear of Courts and CCJ's.
For a start, nobody knows what the Judge may decide, and what amount of payment he would make an order for.
Then there is the added worry/pressure of making sure that payments are made, to stop any Court action being taken.
Then, of course, there is the Court Costs that will be added to your debt.
In my opinion, staying clear of Courts and CCJ's is usually the best option.
I still think that setting up your own DMP, and just paying your creditors what you can afford, based on your I/E, is the thing to do initially.
By rikw
#259333 I can vouch for what chandjay says with low value debts, my DMP the debts are substantial amounts, and have had very littel hassle from the creditors, but doing my wife's DMP is a nightmare with the small amounts, owing to a couple of catalogue companies they are a right load of hassle. I wish she had reconciled the lot on to one card life would be easier
By Highlander363
#262653 I have a similar problem, I have been fighting with Barclaycard for about two years now, I've written them, called them, made a formal complaint and even taken it to the Ombudsman who although sympathetic said they could not force the company to freeze interest (currently charged at 6.9%). I am in a debt management plan with PayPlan who say that I would have to make my own decision regarding Barclaycard and also stating the following "a CCJ does not mean that the creditor has to freeze the interest. It simply makes the repayments legal".

The question is this - If I cease payments to Barclaycard they will be forced to do something, either transfer the debt to a debt recovery company or take action in the county court.

What I would like to know is this - If a CCJ is awarded against me, will interest and charges be frozen? I can't seem to find a definitive answer to this question on any website including Court Service and!

Does anyone know the answer?
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By JaneClack
#262673 If in the original agreement - in the small print - they said they could do this and then in the claim form for the CCJ say they are going to ask for this then yes they can - and at the contractual rate.

What cannot be done for a CCA agreement - which is what the one with Barclaycard is - is add statutory interest.

That is a bit of a shame really as statutory interest is much lower.... about 8% as opposed to the rates of interest on credit cards etc.

So check the small print of the original agreement and then check any county court claim form which may come.
By rikw
#262693 I agree with Chandjay and try to avoid CCJ s at all costs, however it is a counter attack I have used when needed, it usually takes the wind out of the DCAs/ credit control's threats. The letter on National Debtline inviting a creditor to take you to court does state:

[i]In addition, once judgment is granted we understand that further interest will be suspended in any event.

So how I interpret that what NDH are stating if a creditor does get a judgement only the judgement amount is due, of course I may be wrong, maybe if someone who has got a CCJ could correct me if Im incorrect.

There are circumstances, that that the only way to resolve the problem is to let the courts decide, a strategy of last resort, a CCJ would have to become one of my priority debts, which would I expect cause more hassle from the others
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By JaneClack
#262713 We do see CCJs on which interest is still being added and the creditor has to send an updated statement every six months to show what the level of debt now it. In the past this did not have to happen and sometimes people found they owed much more but remember the request to add interest - contractual - has to be on the claim form for the CCJ and also on the original agreement they have to state they could ask for this.

It is a well known myth that interest has to be stopped when there is a CCJ. A judge cannot ask for statutory interest to be imposed on a CCA debt but the creditor can - and sometimes does - ask for contractual interest to be added.

Check the original agreement first of all as if it is not in there in small print the creditor cannot just ask for it when submitting a claim.
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By DuffNCustard
#262733 Highlander - Barclaycard are charging you 6.9% which is a lot less than the 'norm' - this is the rate that they actually use to 'help' debtors - yeah I know - but if you do withold payment and they do go for a CCJ (odds are that this lot will) then they will be yodelling to the Judge how helpful they are to you a measly debtor by only charging you 6.9% and please can we have some contractual interest too (8%)

Mr Duff blasphemes profusely each month when the barclays statement thumps the mat - best thing to do is grit your teeth and press on with the DMP - there's nothing you can do about it. A CCJ would load you up with costs and end up costing more than the 6.9%