As several other people have said, just send them a Ststute Barred letter. Do not speak to them in any way. Do not recognise the debt in any way. Do not fall for any of their tricks - A favourite one at the minute is asking for a "token payment" of maybe £10 whilst they "sort it out". I am pretty sure the Debt Collection Agency has simply bought a big batch of very old debts for next to nothing and is simply "having a go". They do this because a lot of people have forgotten all about it and moved on with their lives - the shock of suddenly being "caught up" can get payment out of a surprising number of people. If you ignore the letter, I can almost guarantee you'll get another one offering you a massive discount for immediate settlement - I've seen 90% discounts offered on old debts. The agency will still be making a massive profit at this level. It's just a game - refuse to play!

Hi Karen How much is your monthly payment to PayPlan? In my experience, they set the monthlies far too high to be long term sustainable. What you have to be aware of with PayPlan is that they are funded BY THE CREDITORS and it is in their interests to get as much per month off you as they can. Who is your bank? Why are you overpaying your mortgage? How much are you overpaying it by? What mortgage is it - I need to know so I can look at the T&C's and see about flexibility for you. It's hard to know without full info, but my initial response would be to contact PayPlan and tell them that you are unable to sustain the origional payment due to "everything being more expensive" and that you need to drop it if you are to continue. Trust me, they WILL drop your payment. Tell them it has to be a permanent drop, not a temporary one as you don't see your situation getting any better. Don't take no for an answer! Then, go to the bank and tell them you want to stop any overpayment on the mortgage. Ask to speak to their mortgage advisor and ask the advisor the following "Can you fully explain to me the options available to me with my mortgage as I have made overpayments for the past 5 years and am now unable to keep doing this. As my account is now ahead of schedule, is there an option for me to either withdraw the overpayment, or to underpay for a period of time?" Take a witness with you, if you can. The advisor will s**t a brick - they are LEGALLY obliged to disclose your options. You may find it enlightening! With most flexible mortgages, if you have overpayed you can reduce your payment (but not stop it because of contractual legalities) until the overpayment has been used up. I don't know what your figures are, but what we're aiming for is to reduce your mortgage payment and PayPlan payment to a level where you can afford your loan repayment. I also need to ask you - have you WRITTEN a monthly budget so you know exactly how much your expenses are etc? If not - do one ASAP because you will get to the end of it and wonder what you've been spending all your money on...!!!

Hi doughy First, we need to understand exactly what your debts are. What is the "private loan"? Is it from a family member? Also, what is solicitor @ £100pm? When is it due to finish? Also, look at your DFS paperwork and see if it is secured against the goods or not - DFS have a habit of making you think you have HP when in reality you have an unsecured personal loan. What I need off you is to know who your creditors are, how much your current UNSECURED debt is for each and your monthly payment for each. Also, roughly when the loans are due to finish. Then, we need to get a proper understanding of your essential expenditure. You may already have done this, but if not, sit down and do it! Mortgage, C tax, water, utilities, internet, car loan, insurances, fuel etc... You should also include any SECURED borrowing on this list (ie anything on HP) as you need to keep up the payments! There is a tendancy for people to underestimate costs - so be realistic and don't think you can do the shopping on £50 a week!!! The whole point is to create a budget that is comfortably SUSTAINABLE for the long term. You don't say anything about this, but do you have any arreas on anything? Particularly utilities and Council Tax? If you do, we need to account for this also. Next job is income - what is it NOW, what will it be and when will it drop? Include salaries, child benefit, any other benefits etc. Please be as accurate as you can so we can see how much a month you have. If you have something paid weekly, you need to multiply it by 4.33 to get a true monthly equivalent. Anything 2 weekly, multiply it by 2.165 for the monthly. I see you have already suggested some figures, but I don't know how accurate these really are. What worries me is that you say about making "cutbacks elsewhere" What are these? In my experience, making cutbacks is just kidding yourself - you can't. That's why it's so important to write a realistic budget in the first place...!!! Anyway, if you can do this and post the info, we'll take a look and see what the best course of action is likely to be for you. All the best.