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over £40K debt - next step?


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My first post on here, after spending a few hours reading all I can …

Two questions or guidance welcome …

First off, the background, the debt is not mine but my nephews that is now living with us (after being kicked out of his family home). The nephew has been ignoring all letters from the creditors for the past year, we stepped in when the threat of court action appeared on the door step.

The debt is currently split across 4 creditors, although they originally started as 7, covering 3 loans, 2 credit cards and 1 store accounts and 1 current account. They are at various stages of “collections” – ranging from Court action threatened, issued to doorstep collectors, or DCA who don’t appear too bothered.

I have been in contact with all 4 and submitted a “budget plan and payment offer”, with payments due to start in Jan 08. 3 have agreed to the plan so far, the forth is due to let me know next week.

I view this as a holding point for 6 months, so we can plan his next steps. He is now employed, however, given the size of the debt, he will be repaying this for over 10 years, even when the plan is offering 50% of his salary.

I am looking at IVA or BR, but that decision will be a few months away for now, I just need to see if he can actually pay the monthly amounts and live by the agreed budget. He is in his early twenties and needs to grow up rather quickly!

What I have found most amazing while working through all of the paperwork he has still got (which is not much!) and from the discussion with the creditors, is that one high street bank in particular had actually let him have a total of £28k unsecured debt when he was only earning £12k pa. It was also applying bank charges on his current account each month (which was beyond it’s O/D limit) when it tried to make payments to the 2 loans accounts and credit card, all held with the same bank.

So my questions or guidance are:-

Reading through the various threads – it looks like the CCA request is a good next step, (once the boy has made his first payments!) do you agree?

Is there any course of action I can take with regards the bank charges? And the fact that the bank clearly lent money to someone that would have no means to repay them.

Or should I just focus on the IVA route next?

Finally – as mention above – he is now living with us, and all bank statements are “c/o” our address, he does have a different surname to us, however, I assume this will hit our own credit rating at our address? We need to get a new mortgage in 4 months time…

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it looks like the CCA request is a good next step, (once the boy has made his first payments!) do you agreeIs there any course of action I can take with regards the bank charges?

Yes
Is there any course of action I can take with regards the bank charges? And the fact that the bank clearly lent money to someone that would have no means to repay them.

You can start reclaiming them (although they will be offset against the account to reduce the debt). Please have a read here http://www.consumeractiongroup.co.uk/forum/faqs-please-read-these/ and here http://www.consumeractiongroup.co.uk/forum/bank-templates-library/
Finally – as mention above – he is now living with us, and all bank statements are “c/o” our address, he does have a different surname to us, however, I assume this will hit our own credit rating at our address?
It shouldn't as credit ratings are personal rather than to do with an address. However, it may be worthwhile issuing a notice of disassociation with the CRA's.

HAVE YOU BEEN TREATED UNFAIRLY BY CREDITORS OR DCA's?

 

BEWARE OF CLAIMS MANAGEMENT COMPANIES OFFERING TO WRITE OFF YOUR DEBTS.

 

 

Please note opinions given by rory32 are offered informally as a lay-person in good faith based on personal experience. For legal advice, you must always consult a registered and insured lawyer.

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The debt is currently split across 4 creditors, although they originally started as 7, covering 3 loans, 2 credit cards and 1 store accounts and 1 current account. They are at various stages of “collections” – ranging from Court action threatened, issued to doorstep collectors, or DCA who don’t appear too bothered.

He needs to send a CCA request for each account,enlcosing £1 for each one and sent by rec. delivery. Do not sign these requests, but print a "signature" in block capitals. Keep the rec. delivery receipts safe as these are proof that legal requests have been sent and when.

 

I am looking at IVA or BR, but that decision will be a few months away for now, I just need to see if he can actually pay the monthly amounts and live by the agreed budget. He is in his early twenties and needs to grow up rather quickly!

Do not go down the IVA/BR routes for now.... there are other ways, as outlined above.

 

So my questions or guidance are:-

 

Reading through the various threads – it looks like the CCA request is a good next step, (once the boy has made his first payments!) do you agree? The requests can go off now.... don't wait. After 12 working days from receipt, your nephew can withhold all further payments in the absence of a properly executed CCA. If they do send something back, come back on here to have it checked out, as some of these companies like to try and pass off Application Forms as "Agreements". :cool:

 

 

:)

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Cheers PriorityOne & Rory32,

 

I assume the CCA letters have to go to the current DCA and not to original bank / loan companys. We'll also get the SAR letters on the move, with these I assume these do have to go to the original banks / credit card companies.

 

I'm even going to do an SAR on my own accounts!

 

Re the IVA/BR - I am not planning on doing anything here until the nephew has started living within his budget.

 

Re the "notice of disassociation with the CRA's" I've had a read through the FAQ's and templates and can't see any templates, are there any specific legal wording I should use, or just "don't link the nephew to us financially" but of course a lot more eloquently. ;)

 

 

Great site - keep up the good work.

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The CCA requests go to whoever is currently chasing your nephew for payment. They need to go by rec. delivery and the receipts kept somewhere safe... making sure that you know which one applies to each CCA request sent.

 

The S.A.R - (Subject Access Request) goes to the original creditor, to determine the level of unlawful charges applied to the account(s). These also need to be sent by rec. delivery and at £10 a time, are more expensive to send.... but they cover all data held by the same creditor, if you have had several accounts with the same creditor, you will only need to send the one.

 

Not sure about the "Notice of Disassociation" template, but you could always write a letter yourself headed up with that as a title, send by rec. delivery and take it from there.

 

:)

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"CCA request is a good next step" ? - Why? He owes the money, what is the point?

"Is there any course of action I can take with regards the bank charges?" - No, the charges are fair and need tio be paid.

" the bank clearly lent money to someone that would have no means to repay them" - Is that what he put on the application form? I somehow doubt it! Either he lied or he could afford the payments.

 

"should I just focus on the IVA route next" - Yes.

"I assume this will hit our own credit rating at our address?" - Possibly. Blame him, not the creditor, if you have problems.

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Guest 10110001

£40 grand of debt & 12k annual salary.

 

Does he have any assets?

 

If not then bankruptcy is the way to go. Write it all off, stop the payments now and get together the £400 petition fee.

 

Go to the county court and get forms 6.28 and 6.37.

 

Why straddle him with ten years of repayemts when he can have a clean sheet in three.

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