Offering reduced payments... Thoughts pls...

[CaptainBob]

Hi all

 

I sent all of my creditors a copy of my SOA following a change in personal circumstances (namely I'm on a lot less £'s now than I was last month as my last firm folded, and I had to find work very quickly to cover household essentials and the mortgage). The SOA clearly shows I have a fairly small amount of disposable income after the mortgage and household bills, to distribute amongst my 11 creditors, all of whom are owed a fair bit. The cover letter I put with the SOA was a slightly modified template from this site, and the explanation I put was simply that my salary is a lot lower than it previously used to be, but that I was still working.

 

M&S Money have responded and have asked me to "clarify why, and by how much your income has been reduced, and provide proof"

 

Now this is fair enough for them to ask, but as I was typing a reply, I started thinking how blunt this was, given that I have had to admit I have major issues and ask them for some help (having never ever missed a payment).

 

Just wondered what anyone else would think - especially given that my SOA from Natonal Debt Line clearly shows my situation. (i have nothing to hide, and can supply the "proof", but just felt like it was kicking someone when they're down).

 

Rant over ;-)

[rory32]

clarify why, and by how much your income has been reduced

Well if they had read your statement of affairs they would see how much your income has fallen to.

 

and provide proof

There is absolutely no requirement for you to do this.

 

What type of account is this and when was it taken out?

 

Are there any charges on the account?

[CaptainBob]

It's a persoanl unsecured loan account taken out in 2005. So far no charges, but they are saying that before they accept my offer of reduced payment, they want to see this "proof". It just really got under my skin as I already feel embarrassed about my situation, having had to take the first job that came along to keep a roof over our head and food on the table for the missus and me 2 youngsters, and fill out the SOA, which on the first draft clearly showed where obvious things could be cut back (and they were - sky tv chopped, broadband changed to cheaper provider, strict food budget in place, car sold and replaced with cheap 1.4 engine economical one, etc). I was being proactive by sending them all of this well before their next payment is due, rather than miss payments and then have extra charges and arrears. Surprisingly, they never wanted to see "proof" of my income when the loan was taken out.... Just made me feel like I was trying to cheat them. Believe me, I wish my current situation was make believe, but sadly it's true and it isn't particularly pleasant at the moment...

[blondie46]

I've had similar problems with some of my creditors. I sent them all details of my financial incomings and outgoing yet they still ask for details, or have ignored my letter and keep ringing me, or ask me to pay a minimum of at least £10 that I cannot afford. Can they force me to pay £10 a month even though I have told them I cannot afford it, and am I within my rights to just pay a couple of pounds per month? Surely something is better than nothing!

[IdaInFife]

Most companies want you to pay more than you can afford. If you have provided and income and exp and made a proposal of each amount then there's nothing more than you can do. You do not need to provide any proof.

 

I always advise what you have done and then adjust your payments as you have advised them and keep to them. Most companies will ask for more but ignore them. Courts take a very dim view of companies that try and squeeze more out of you than you can afford and if it has been shown you have paid these amounts then there nothing they can really do as a court will not force you to pay more than you can afford.

 

Ida x

[blondie46]

Thank you Ida. That's well worth knowing. Maybe I can sleep a bit better now

[rory32]

If a company does not accept your offer (no matter how low it is) then I would send them something along the following lines.

 

Dear Sirs,

 

RE: Account Number: xxxx

 

Thank you for your letter dated xxxx, in respect of the above matter.

 

I am disappointed to note that you will not consider my proposal to satisfy my debt to you. I appreciate that this is not a wholly satisfactory state of affair, but this is the reality of my situation at the present time.

 

I would point out that I have investigated the options of an Individual Voluntary Arrangement and Bankruptcy but I feel that my proposal is certainly more beneficial to you than either of these procedures. Due to my present circumstances, I am unable to offer a better resolution and would respectfully ask that you reconsider my proposal, which was submitted in a genuine attempt to honour my commitment to you.

 

I further appreciate that you are not obliged to accept my proposal, however, considering that you are entitled to issue proceedings for the recovery of the balance owed to you, I would ask that you also consider, that in the event that these proceedings ensue, interest would be frozen upon Judgement and I would entirely reserve the right to produce my proposal for the attention of the Court, in evidence that I have attempted a sensible resolution in line with my ability to pay.

 

This notwithstanding, I would hope that the foregoing will not be necessary and that we will be able to resolve this matter amicably.

 

In the interim, I will forward payments to you as proposed, as a gesture of good faith. Please could you conduct any further communication in writing only.

Accordingly, I await your further comments.

 

Yours sincerely

 

Remember these are non priority debts. They may huff and puff but at the end of the day if you are paying them in line with your ability to pay then they are obliged to accept this. You just need to stick to your guns and insist that this is all I can afford to pay you at present.

[blondie46]

Wonderful! Thank you very much xx

[CaptainBob]

Hi All - I am starting to get more replies in now. Getting the "you must phone us" letters, but a couple are insisting that they will only consider the reduced payment if it comes via PayPlan, CCCS or other debt management plan. Is this normal? Whats the difference between doing it myself and going through one of these to arrange it? I have seen good things about PayPlan and CCCS on here, so have no reservations about them, I just wondered if anyone else has had this type of reply, but been able to go directly to the creditors instead? Cheers

[blipvert]

I had exactly what you describe when my situation went pear shaped due to a serious change in circumstances and unavoidable expense. I went with PP in the end, it was surprisingly easy. It's something you may wish to consider, even if for a probationary period. The downside is usually an adverse credit rating, the upside is frozen charges/interest (usually). Some compaines charge for this service but CCCS and PP are both free.

[blondie46]

I don't get replies to my letters (yet!!) just phone calls 3 or 4 times a day! I don't answer them because I think talking to them, they try and make you pay more than you can afford by saying 'Oh we cannot accept that amount, the lowest we can accept is £xx' I have already given them a full breakdown of my income & outgoings, plus I have made token payments, so why do they keep ringing? Isn't it harrassment when they keep calling like that? Some of my calls have started at 8.20am and finally given up at 9pm. I just turn my ringer off now!!