By BankFodder in Debt DiariesMany people with multiple credit debts often feel that a consolidation loan is the right solution to help them manage their payments. On paper it sounds like a great idea – one manageable monthly instalment which is often a great deal lower than all of the current payments combined. Pre-credit crunch television advertising was awash with various lenders offering these amazing solutions, some employing celebrities to endorse their various products. Many of these companies targeted home-owners citing the possibilities of ‘unlocking’ the equity within their properties. Out of every advert I came across not one of them used the word ‘ Mortgage’.
Don’t get me wrong, for some people a consolidation loan is viable option, it might actually save a great deal of money in long run – especially if the current debt is sitting on expensive credit cards. The main problem with consolidating is that, once consolidated, there is the risk of borrowing on the various cards again and thus inflating the magnitude of the situation much more. Those that consolidate must erase the temptation of borrowing – cancel the cards! Consolidating can be expensive, often interest has accrued on the original agreements which will then be consolidated against; the new agreement will also attract interest – and so the situation compounds. This gets even worse if the original agreement had payment protection insurance. Many individuals note the nice low monthly instalment, it could be caused due to the fact that the consolidation loan is over many years, I’ve seen some that are 15,20,25 years long. The interest which could accrue over a long period of time could become a very significant amount indeed.
Secured loans should be avoided if at all possible. Turning debt from unsecured to secured converts it from being regarded as a non-priority to priority. Failure to pay a secured loan could result in the repossession of your home. It is much, much more difficult to negotiate reduced payments on a secured loan than it is an unsecured one although the recent changes to the Consumer Credit Act now give greater provisions to allow you to ask a court to make a ‘Time Order’ which could reduce your instalments to a level which is more manageable.
If consolidating is something that you are seriously considering it is imperative that you seek financial advice to ensure it would be in your best interests, and that you get the best possible deal. If you’re interested in speaking to someone knowledgeable, who will not try and sell you something please consider seeking advice from the folks at the Money Advice Service
http://www.moneyadviceservice.org.uk // 0300 500 5000
By BankFodder in Debt Diaries4) Debt Relief Order (DRO) [England & Wales]
Debt Relief Orders are a very new addition, introduced in the last few years. They are designed for those with very few assets and very limited income. An application for a DRO can be made if you owe less than £15,000. If an application is granted the creditors are prevented from contacting you for a period of 12 months, during this time the interest and charges on the debts are frozen. If your circumstances haven’t improved the debts will be written off at the end of the year. To qualify you need to ensure that your assets are worth less than £300 (if you have a car it has to be worth less than £1,000). You also need a disposable income of less than £50 per month. You apply by making an application via an ‘approved intermediary’, all the aforementioned agencies have intermediaries that you can approach to help you. More info here:
5) Administration Order [England & Wales]
An Administration order is a single county court order that covers credit debts and certain other debts, which are all treated together. It allows you to make a single payment every month into the court. The court staff will then divide the money amongst your creditors on a pro-rata basis. Whilst an Administration order is in place, none of the creditors listed on it can take any action against you without first getting the court's permission. Visits from debt collectors, letters or phone calls from your creditors should stop once the Administration order is in place. To qualify for an Administration order you would need to have at least one county court judgment (CCJ), at least one other debt and an overall debt level of less than £5,000. More info here:
6) Debt Arrangement Scheme (DAS) [Scotland]
A DAS is a debt-payment arrangement system set up by the Scottish Government. It is designed to help you manage your debt repayments and can also provide protection from creditors making you bankrupt or enforcing your debts by diligence (enforcement action through the sheriff court system).Under a DAS debt-payment programme, you will have to make a single regular monthly payment, whilst you keep up with your payment the interest and charges on the debts will be frozen. A DAS has many similarities to a DMP although it affords greater protection to you. To qualify you need to demonstrate that you can clear the debt within a reasonable period of time, this usually equates to within ten years. More info here:
7) Trust Deed [Scotland]
A trust deed is a formal agreement between you and your creditors. It passes your assets and property to a trustee to be administered for the benefit of creditors and the payment of debts. Once the trust deed is set up it is legally binding. Providing it meets certain conditions, a trust deed may be recorded in the Register of Insolvencies as a 'protected trust deed'. This prevents the creditor from making you bankrupt so long as you stick to the terms of the trust deed. A trust deed usually lasts for 36 months so is a relatively quick option, it is an insolvency measure so has several serious implications that would need to be considered – such as a significant impact on your credit rating. If you are under a trust deed you are not allowed to be a company director. More info here:
8) Write Off [England, Wales & Scotland]
In certain circumstances your creditors may consider writing your debt off, this is especially pertinent if you are unwell and are unlikely to get better. If you have assets such as a property it may be significantly more difficult to convince a creditor to allow you a write-off as they may wish to try and secure the debt. Often the creditor may wish to see supporting evidence – such as a doctor’s letter. As with all debt options you may need to be persistent, it could take several attempts before a creditor grants the write-off.
9) Full & Final Settlements [England, Wales & Scotland]
A full & final settlement is an arrangement where a creditor accepts a lump-sum payment to clear the balance of a debt. This lump-sum is a lesser sum that the total amount owing, thus some of the debt is written-off. Full & final settlements can often write significant sums of money off, especially if the debt is old or if the debtor has had a change of circumstances which means that repaying the debt would take a very long time, if at all. Some creditors may call a full & final settlement a ‘short settlement’. The key to negotiating full & final settlements is to do so in writing, always ensure that the creditor is going to accept your settlement and not pursue the remaining balance or pass it on to a third-party to collect. You should always keep this confirmation in a safe place as it can be used as evidence should a creditor ever try and chase for the remaining balance (this is quite a rare occurrence). Full & final settlements are particularly successful if you are being chased for an old debt, or if the debt has been sold on to a debt collection agency. If the debt is being ‘passed around the houses’ do not be afraid to offer a very low sum.
You may have read on the forum that full & final settlements are not contractually binding from a legal standpoint; in some instances that likely to be true. This is why it is vital that you keep a copy of the creditor’s acceptance of the settlement. If they then go against their promise it can be argued that they are acting unfairly, the legal doctrine of ‘promissory estoppel’ will afford you legal protection if it ever went to court. For piece of mind some individuals draw up a legal document outlining the full & final settlement, it’s unlikely you will have to do this with your regular creditors. More info here:
By BankFodder in Debt DiariesThe majority of debtors owe money to the people they hold a bank account with. This makes it easy for the banks to grab money from their income to off-set against the debts when things start to go wrong. One of the cornerstones of ensuring yourself a debt-free future is to move your banking arrangements to a 'safe' bank account. This will be an organisation with to whom you owe no money to. Once your income is safe guarded your creditors will not have an automatic right to your money. This puts you in a much stronger position to negotiate reasonable and affordable payments.
What about my overdraft?
An overdraft is a debt, just as much as a credit card or a loan; and so you should treat it as such. When you move to your new bank please ensure that you do not have any form of borrowing - not even an overdraft. If you have an overdraft with your old bank include it as a creditor along with your loans, credit cards etc. It's always important to put all your creditors in the same basket, this means that you'll treat them all in a fair and equitable manner.
What if I can't open an account due to my poor credit score?
So long as you can prove who you are and where you live you should be able to open an account. You should ask for your new bank for a basic bank account. This doesn't give you any form of credit, although you should have the facility to make payments via standing order and direct debit. A few even give you some form of debit card.
Be sure to choose a bank which isn't affiliated with one that you have debts with. As an example those with a Mint credit card should avoid the Royal Bank of Scotland. In fact it might be worth avoiding Natwest as they are closely linked to the Royal Bank of Scotland too. You can find a list of who is connected to who here:
If you old bank makes things difficult for you to switch DO consider a formal complaint. Under the Lending Code a bank should treat your situation in a positive and sympathetic manner. You can read the code here:
It's fully appreciated that switching banks can be a total rigmarole, but in the long-term it's one of the most important aspects to dealing with your debts.
Nine Banks have now launched fee free accounts :-
By BankFodder in Debt DiariesThere are many options available to you if you are struggling to meet your debt commitments. Some of these options are more serious than others. Due to the recent economic downturn many fee-charging, commercial companies have cropped up offering all sorts of solutions to assist the public with their debts. These companies are out there to make money, and although some of the solutions might be viable it is important to seek advice from a reputable organisation to ensure the solution is right for you. For example, over the last few years there has been plenty of television advertising highlighting a ‘little known government scheme that can write off up to 80% of your debt’. This option is known as an ‘Individual Voluntary Arrangement’ (More information about those later on within this blog entry), and although it is possible under the arrangement to have a large percentage of your debts written off there could be significant implications involving property and possibly employment too. What this blog entry will do is outline some brief information about all of the debt options out there, if you are looking to take one of these schemes up I urge you to seek free, independent advice from a recognised debt charity:
National Debtline // 0808 808 4000 // www.nationaldebtline.co.uk
CCCS // 0800 138 1111 // www.cccs.co.uk
Citizens’ Advice Bureau // http://www.citizensadvice.org.uk
Some commercial firms often try and masquerade as free advice agencies, some of them have very similar names to the organisations named above. If you ever receive a cold-call from a firm stating that they are one of the above organisations it is likely they are lying. For the record, some of the fee-charging firms do a reasonable job although it is likely they will not advise you on all of your possible options – just those that they are likely to profit from. Many of these firms may offer you a ‘Debt Management Plan’(See below!), this is something that you can actually get for free, so speak to the charities.
DEBT REPAYMENT OPTIONS
1) Debt Management Plan (DMP) [England, Wales & Scotland]
A DMP is an informal arrangement where a third-party DMP provider will negotiate with your creditors on your behalf, they will also try to arrange for the interest and charges on the debts to become frozen. This option will allow you to pay an affordable amount on a monthly basis which will then be distributed on your behalf amongst the creditors. DMP’s take away a lot of the workload and are particularly worth considering if you have many creditors. They are also totally free-of-charge through one of the debt advice charities who have a very high success rate of getting affordable arrangements sorted and interest stopped. The fee-chargers also offer DMP’s, they often charge upfront set-up costs, they will also take a monthly percentage for themselves. The fee-charges often imply that the free providers work ‘on behalf’ of the creditors, and that by charging fees they offer a better service. I’ve never personally come across a creditor that prefers an individual to use a fee-charger, some creditors even refuse to freeze interest and charges. You can read more about DMPs here:
2) Individual Voluntary Arrangement (IVA) [England & Wales]
This is a formal arrangement through the county court to pay an agreed amount off your debts over a shorter period. Any debt left at the end of the IVA is written off. IVAs can be set up in a number of different ways, either as a monthly instalment plan over a fixed term (normally five years), or a short term arrangement if you have a lump sum to put forward. Some IVAs are a mixture of both. It should be noted that if you are a homeowner there is likely to be an equity clause that will expect you to raise funds from remortgaging which will also be paid to your creditors. If you have more equity than debt it is unlikely that an IVA will go ahead as the creditors have to ratify the proposal, they will simply argue that you are not insolvent. IVA’s used to be a huge business, and although not so many are set up these days they are still a very good option if you have a significant amount of debt. They are not cheap, Insolvency Practitioners typically make a few thousand pounds from an IVA – their fees are usually built in to the monthly instalments. A word of warning: If you cannot meet the payments under an agreement they are difficult to modify, if the arrangement fails you could incur further costs; it could also cause the Insolvency Practitioner to make you bankrupt. Recently the industry got together with the Insolvency Service and compiled the ‘IVA protocol’ which is a set of rules to ensure that Insolvency Practitioners adhere to a transparent code of practice. If you chose an IVA please consider using a ‘protocol compliant’ provider. More info here:
3) Bankruptcy [England, Wales & Scotland]
Bankruptcy is a way of dealing with debts that you cannot pay. Whilst you are bankrupt any assets that you have might be used to pay off your debts. After a period of time (usually one year) all of your outstanding debts are written off and you can make a fresh start. The process is relatively expensive initially, the application costs £450 with a further £150 court fees (although you may be able to claim discount or exemption if you’re on a low income). In Scotland the current fee is £100. If you are working you may also be asked to pay a percentage of your disposable income into the bankruptcy for a three year period, this is known as an income payments arrangements. Bankruptcy is one of those options which has a huge stigma attached to it, for many it is by far their best option. It will allow a fresh start to be made and will stop the creditors from being able to chase for payment once the order has been granted. Prior to petitioning you should ensure that there are no implications with your employment. A bankrupt person is also not allowed to be a director, or involved with the running of a limited company. If you are in mortgaged accommodation it may be possible to take the bankruptcy route and keep your property, this is especially the case if you have little or no equity. Other assets, such as a motor vehicle, may be sold for the benefit of the creditors. Although the bankruptcy route is a serious step it can be the fastest and cheapest way of becoming debt free. More info here:
Or if you are in Scotland:
By BankFodder in Debt DiariesDebt can take various forms, and some are more important than others. It is possible to place debts within two separate categories – priorities and non-priorities. The way that the two types can be differentiated is based on the action that can be taken for money to be recovered. With priority debts it may be possible for you to lose something tangible if you do not act quickly. As an example, some creditors could:
• Take away your home (repossession / eviction)
• Cut off your gas or electricity supply
• Send a bailiff to recover your belongings
• Ask the Magistrates’ court to send you to prison
Common priority debts include:
• Mortgage arrears
• Second mortgage / secured loan arrears
• Rent arrears
• Council tax
• Gas / Electricity
• Magistrates’ court fines
• Child maintenance
• Benefit overpayments and Social Fund loans
• Income tax, National insurance and VAT arrears
• Hire-purchase, Conditional sale or Bill-of-sale arrears
• TV license arrears
• Telephone, Sky, Virgin Media, Mobile ‘phone arrears
A non-priority debt is one where the creditor has less power to recover their money, these typically include credit debts such as unsecured loans, credit cards and bank overdrafts. On the face of it these creditors are actually very limited in their powers to recover their money. This is precisely the reason why it is often these type of creditors that are the most vocal when it comes to their recovery action, their main option is to scream and shout for their money through a bombardment of letters and telephone calls. Creditors of this nature can be very persistent, but once you get an understanding that this is their main option you should hopefully be able to restore the equilibrium – a non-priority creditor’s bark is far worse than their bite! Missed or reduced payments can often result in your credit file being affected through late-payment markers and defaults being placed upon it; a golden rule of successfully dealing with your debts is to be resigned to the fact that your credit score is going to fall by the wayside. Any marks or defaults sit on your credit file sit on it for a maximum of six years, so your file will get better again after time. If you would like to obtain a copy of your credit file you can do so by making an application to one of the credit reference agencies:
In a worst-case scenario it is possible for a non-priority creditor to use legal proceedings to try and recover their money. This is nearly always via the county court, which is a civil court. The majority of this action is actually carried out via a paper exercise, you wouldn’t usually have to attend a hearing unless it is your intention to defend a claim. There is plenty of information on this website outlining the principles of court action in great detail, so I will not dwell on it here.
DEBT COLLECTION AGENCIES AND THE LIKE
A common ploy for non-priority creditors is to use debt collection agencies to chase for payment. These can be in-house to the original lender (e.g. Metropolitan for HSBC and Mercers for Barclaycard) or third-party firms. The golden rule is that they do not have any further powers to collect payment. They are NOT bailiffs, nor have they anything to do with the courts. If they imply that they are going to send a doorstep visitor you do not have to deal with them. They cannot break in to your property, nor can they take anything from you. They have the same powers as a random person visiting your address, i.e. none. You can tell them to leave, and if they don’t they could be trespassing. Another golden rule, and one that you are likely to see mentioned all over the website, is to NEVER SPEAK TO A CREDITOR ON THE TELEPHONE! Keep all correspondence in writing, it is way more civilised and you’re more likely to get your offers of payment agreed faster. Most creditor collections activity is target-based, the telephone collectors will say all sorts of things to try and badger you for payment. Some can be very aggressive and downright rude. Some may even misrepresent their powers. If you state in writing to your creditors that you only wish to correspond in writing they should adhere to this request.
So, now you know the difference between a priority debt and a non-priority debt we can now look to start tackling them! The next part of this guide will discuss the most important part of dealing with debts there is; the budget sheet!
This is a bit of a lengthy one but I’ll summerise best as possible.
THIS IS HOW THE PHONECALL WENT
I was contacted by future comms by phone, they stated that they could beat any phone contract I have , (I am a limited company but just myself that needs a business phone and I am the only worker)
I told future comms my deal, £110 per month with a phone and a virtual landline, they confirmed that they could beat that, £90 per month with a phone , virtual landline they also confirmed they would pay Vodafone (previous provider) the termination fee. As I am in business, naturally I was open to making a deal. So we proceeded.
Future comms then revealed that the contract would be with PLAN.COM and the airtime would be provided by 02, I instantly told them that this would break the deal as I have poor 02 signal in the house where I live as my partner is on 02 and constantly complaining about bad signal
the salesman assured me he would send a signal booster box out with the phone so I would have perfect signal.
so far so good.....
i then explained this is the only mobile phone I use for business and pleasure, so therefore I didn’t want any disconnection time in the slightest between the switchover from Vodafone to 02
the salesman then confirmed that the existing phone would only be disconnected once the new phone was switched on.
so far so good....
A shocking story of domestic and economic abuse compounded by @BarclaysUKHelp bank complicity – coming soon @A_Gentle_WomanA shocking story of domestic and economic abuse compounded by @BarclaysUKHelp bank complicity – coming soon @A_Gentle_Woman. Read more at https://www.consumeractiongroup.co.uk/topic/415737-a-shocking-story-of-domestic-and-economic-abuse-compounded-by-barclaysukhelp-%E2%80%8F-bank-complicity-%E2%80%93-coming-soon-a_gentle_woman/
Hot news for anyone who has suffered mortgage arrears charges, irresponsible lending or other unfair lender conductThe FSA has announced large fines against DB UK Bank Limited (trading as DB Mortgages) - DeutscheBank and also against Redstone for their unfair treatment of their customers.
Please see the links below for summaries and full details from the FSA website.
It is now completely clear that any arrears charges which exceed actual administrative costs are unfair and therefore unlawful.
Furthemore, irresponsible lending practices are also unfair and unlawful.
Additionally there are other unfair practices including unarranged counsellor visits - even if they have been attempted.
You are entitled to refuse counsellor visits and not incur any charges.
Any charges for counsellor visits must not seek to make profits. The cost of the visits must be passed on to you at cost price.
We are hearing stories of people being charged for counsellor visits for which there is no evidence that they were even attempted.
It is clear that some mortgage lenders are trying to cheat you out of your money.
You should ascertain how much has been taken from you and claim it back. The chances of winning are better than 90%. It is highly likely that the lender will attempt to avoid court action and offer you back your money.
However, you should ensure that you receive a proper rate of interest and this means that you should be seeking at least restitutionary damages - which would be much higher than the statutory 8%.
Furthermore, you should assess whether the paying of demands for unlawful excessive charges has also out you further into arrears and if this has caused you further penalties in terms of extra interest or any other prejudice. This should be claimed as well.
If excessive unlawful charges have resulted in your credit file being affected, then you should take this into account also when working out exactly what you want by way of remedy from the lender.
You should consult others on these forums when considering any offer.
You must not make any complaint through the Ombudsman. your time will be wasted, you will wait up to 2 yrs and there will be a minimal 8% award of interest and no account will be taken of any other damage you have suffered.
You must make your complaint through the County Court for a rapid and effective remedy.
Do you have a mortage arears claim to make? Then post your story on the forum here
30 Day Right To Reject - Vehicle Casualty Report. Read more at https://www.consumeractiongroup.co.uk/topic/415585-30-day-right-to-reject-vehicle-casualty-report/
I am new here but very glad to find my way here and would welcome any input.
i purchased a brand new campervan conversion from Hillside Leisure (175 miles from our home) on July 26th for £31,000 and, within 48 hours, during a storm, the alarm began to sound incessantly. We could not get it to stop, even after trying everything listed in the manual. We phoned Hillside on Saturday July 28th around 2.00pm. The young man who answered the phone said he would seek the advice of their technician and call us back, which he did. The technician told us that they, Hillside, couldn’t help, but that we should take the van to Nissan (the van is a Nissan) as the fault would lie with one of their components.
Dookist posted a topic in Local Authority, Council Tax and Business Rates Issues,Hi all..... I just don't know what to do... received a summons today for non payment of Council Tax.
It's in both mine and my husband's name and although we live together we also live quite separately, and don't share a bedroom or anything ... we have separate finances, but, on account that I only get a State pension of £306 a month, he pays most of the bills.
He has a State Pension, a small private pension and he works part time... he gets about £2k a month.
Years ago, we had a joint bank account, and I made sure the bills were paid on time... but now I don't even have access to his account so don't know what's been paid or what hasn't until the (unpaid) bills drop through the letterbox.
Anyway, as I said, we are jointly responsible for the council tax on our rented property, and have been summonsed to appear at court as he apparently didn't pay the last 2 installments.
He doesn't seem to worry about such things but I am at my wits end and suffer from anxiety... I don't want to be someone who is being chased for money all the time.
Do I have any defence at court if I state that I am unable to pay? It's not my fault that I receive such a small pension... I had to take part time jobs years ago so that I could look after my children. I have no other money or savings... I don't see what I can do to avoid a criminal record.
I hope someone can help, please...
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