Cant pay at all, debtor's prison next?

[steve4kendal]

In 2008 I was, on visiting my local Lloyds bank (at my own request), pretty much pushed into borrowing £10,500, the main purpose of which was the clearing of my £3K overdraft with them. The repayments, at £423 per month, took up all of my disposable net income from my 2 employments. Three months later, I lost my main job and I am still, 12 months on, £500 a month down which leaves me with not a penny towards any of my unsecured debts. THe CCCS, who Lloyds recommended me to when they realised I was snookered and not covered by their PPI, told me to change banks right away and that I had no money at all to offer towards my debts. Now, Lloyds solicitors are putting me in court for the loan and no doubt the others will follow suit. Is there any way forward and what are the best/worst possible outcomes here? I am sure there must be others in similar circumstances. :? Steve.

[steve4kendal]

Just thought I'd better add that we are buying the house and have been told that the big B is not an option.

[diamondgirl]

Hi and welcome

 

Have you CCA'd your other creditors yet to check if your agreements are unenforceable? If not I would suggest you get a letter off to them, they would have 12 +2 days to respond and if they didn't reply within the time limits then you could put the accounts into dispute.

If you don't mind my asking roughly how much and how many creditors do you have. Are they all credit cards?

Always ensure that you pay your utility bills, council tax, water, gas etc., these are your essentials.

Are the debts in both names? Whose the mortgage with?

DG

Edited January 3, 2010 by diamondgirl
added last line

[steve4kendal]

Dont know what CCA means? I have 5 defaulted cards, totalling about £1000, also £1200 OD on my now-defunct Lloyds current account, (thats next), mortgage in joint names and 2 grown-up kids living with us. Wife also has credit problems, but she is being managed by CCCS, because she actually still has a little disposable income, I have none.

[diamondgirl]

CCA stands for Consumer Credit Agreement this would be the agreement you signed when you took the cards out.

It cost £1 for each request to your creditors, it may be that the original agreements don't have the correct wording which would make them unenforceable.

 

If you wish to send for your CCA then you can send the following letter.

 

Dear Sir or Madam

 

Re:

 

This letter is a formal request pursuant to s.77/78 of the Consumer Credit Act 1974. I require you to provide me with a true copy of the credit agreement relating to the above account, together with any other documentation the Act requires you to provide.

 

I expect you to comply fully and properly with this request, within the statutory time limit. You are reminded that should you fail to comply with my request, the provisions of s.77 will apply.

 

If it is your view that you are not the creditor, s.175 of the CCA 1974 applies in the case of a simple assignment, and places a duty upon you to pass this request to the creditor. In the case of an absolute assignment, you are a creditor as defined by s.189. If you contend that you purchased the rights but not the duties of any agreement, you are reminded that s.189 of the Act is clear that an assignment is of both rights and duties.

 

Your attention is drawn to ss.5(2), 3(b),6 and 7 of the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR).

 

I enclose a postal order in the sum of £1.00, which is the statutory fee. Note that these funds are not to be used for any other purpose.

 

If you are unable to comply fully and properly with this request, you should confirm this in writing at the earliest opportunity, and certainly within the statutory time limit for compliance, and return the fee.

 

Please note all communication must be in writing only.

 

I look forward to hearing from you.

 

Yours faithfully

 

A N Other

 

Amend the letter to suit, but make sure you put the account number on it. Also send £1 PO and write on that this is for the CCA request only.

 

If you send this letter to each of your creditors make sure you send it at least by recorded delivery to ensure you have a receipt for the letter and also you can check when it has been delivered. Special delivery is guaranteed by 1pm next day but it does cost a fair bit more than the recorded delivery.

Are your creditors still adding interest and late payment charges to the accounts?

Don't deal with your creditors over the phone always ask for everything in writing as anything said over the phone can be denied at a later date.

I would certainly be looking at changing my bank account there are lots about who will offer you a basic account (no overdraft, no cheque book or card) with just a basic cash machine card. If you have any DD you can get them transferred over to your new account without any hassel.

DG

[diamondgirl]

Dont know what CCA means? I have 5 defaulted cards, totalling about £1000, also £1200 OD on my now-defunct Lloyds current account, (thats next), mortgage in joint names and 2 grown-up kids living with us. Wife also has credit problems, but she is being managed by CCCS, because she actually still has a little disposable income, I have none.

 

Just another thought did you ask if you could do a joint DMP with the CCCS as it would have meant that whatever disposable income was left between the two of you could have been used jointly.

 

DG

[cerberusalert]

Moved to Debt Collection Forum.

[babybear39]

Just a suggestion but have you considered a DRO?

[steve4kendal]

Just a suggestion but have you considered a DRO?

 

Well, it took just a 30 second search to establish that DRO's are for those with assets under £300. Snookered again.

[sleepingdog]

Hi steve4kendal , Lloyds are likely to follow through with the court threat and if they do and you turn up to court then the worst that can happen is the judge is likely to grant a CCJ against you . This may be a judgement order where you need to pay a regular sum each month ( could be as low as £1) or a forthwith judgement where you have to pay the full amount within 28days , this you can't do so lloyds will then go for a charging order. This is what lloyds will probably want to happen as it will secure the debt to your home, but before you start worrying this does not mean that they will force you to sell your home ,it just means that when you do sell your home in the future that they will be second in line to be paid out. There are many bridges to cross before they would get a charging order and many chances for you to possibly stop them doing so. At the moment look at what people on here suggest to see if you are able to stop them at the first hurdle and also research charging orders as this will put your mind at rest. I have been down this route for around 3 years now and can tell you that most of my creditors will not take court action due to incomplete paperwork and the few that have have mostly been stopped by my defences, also the 1 that tried for a charging order was fought off by myself with help from this site. I do have CCJs against me but as long as I pay the small payments each month there is little that they can do . You will soon learn to deal with the debts and they will no longer take over your life.

sleepingdog

[sleepingdog]

Hi again ,I forgot to mention as far as I am aware you will can not be sent to prison for consumer debt only for non payment of say council tax debt and that is only as a last resort .

sleepingdog

[maroondevo52]

The chances of anyone ending up in prison for non payment of debts are extremely slim. You cannot be sent to prison for not paying unsecured loans or credit card debts. You can be sent to prison for non payment of community charges, council tax and business rates. However, imprisonment is a last resort and courts will try to come to some form of payment arrangement before using this option.

[jimbo45]

Hi there

LLoyds might be OK - but if the debt gets pushed over to a DCA then you could be in BIG TROUBLE.

 

Some of the slimier DCA's will go for the juggular here -- I've heard of cases where they have threatened to go for a forced sale of a property on as little as 1200 GBP of UNSECURED DEBT.

 

This whole area of charging orders should be made quite clear on the original CCA -- I think many of us would most certainly NOT have taken out Credit Card agreements if there was the remotest possibility of losing a house on "UNSECURED DEBT" -- makes the whole statement UNSECURED LOAN a TOTAL LIE.

 

(It's a real shame that we can't use the Trade Descriptions Act against this as saying something is UNSECURED when it blatantly isn't is just a total LIE).

 

However a Court will tend not to force a sale as there are other creditors such as the Mortgage company who have a prior call and you will probably only have to pay a small amount each month.

 

You are actually worse off if you own the property outright.

 

It's disgusting really how the Banks etc offer all this stuff to individuals - but as soon as you get into serious problems such as jobs being off shored to India etc so your income falls to near zero -- Bang - on go the BULLIES, THREATOGRAMS and DISGUSTINGLY EXTORTIONATE FEES to people who can LEAST AFFORD TO PAY THEM.

 

Solved fortunately but I had a water company wanting to collect a 90 GBP "Fee" on a 78 GBP debt and for overdue Council tax a Bailiff wanted to add another 300 GBP to a 500 GBP. Both solved thank goodness with help from this forum -- thanks guys.

 

Maybe there should be a website somewhere that people could use to name and shame actions of specific individuals who work for these DCA's and cause so much misery and stress to people who through no fault of their own find themselves in real trouble.

 

Cheers

jimbo

[steve4kendal]

Ok, so the advice and comments are coming thick and fast now, thanks everybody. Yup, I know that prison is only for the serious stuff, but I,m just looking for a way forward now. Is it likely that any of my credit agreements are "unenforceable"? How common is this? The Loan deal is already in the court and I have only just got a copy agreement sent, (never got one before) from their sols and then only by the expedient of denying knowledge of the loan. Have now written to Lloyds HO complaining about their conduct in selling me a crippling loan with inneffective PPI, but dont know if this will do any good. Yes , we have had DCA,s on our case for months now. I no longer answer the phone to them (they rang on Boxing day), because with no disposable, there is nothing to discuss. Already changed my mobile number, house phone will be next. A lot of questions here, but also, does having other adults living with us affect the likelyhood of enfoced sale or not? Steve.

[sleepingdog]

hi steve , forced sale is very rare as far as I am concerned and as i said in post 10 all of your creditors are a long way from being in a position to even try. Sometimes it is better to be taken to court and for the Judgement to be a small monthly payment as this should end the constant chasing by DCAs.

sleepingdog

[avatari]

Steve,

 

Try to relax about forced sale, this is really at the back of likely scenario list, there is a whole process that needs to be gone through before it (potentially) gets to that, and you are only at the start. The advice you have had re CCAing the creditors is spot on, do this first. You can then post up the CCAs here (minus personal info) and we can go from there. Enforceability will depend on the apperwork and Agreement conception date.

 

One step at a time. There are plenty here to help you, for example diamondgirl's and sleeping dog's advice I thought was excellent. Get a good night's sleep.

 

Av

 

Hi there

LLoyds might be OK - but if the debt gets pushed over to a DCA then you could be in BIG TROUBLE....Cheers

jimbo

 

Jimbo, some useful personal anecdotes there and IMO you are broadly correct in what you say re charging orders but please aware that there is little benefit to a new Cagger with little knowledge of his options in making exagerated and unqualified statements like 'you could be in BIG TROUBLE', re DCAs when this is simply not the case.

 

Dealing with the OC is always preferable, but most DCAs' threatogram systems can be just as easily managed by using the CAG template letters and advice on this forum.

[ODC]

Hi there

LLoyds might be OK - but if the debt gets pushed over to a DCA then you could be in BIG TROUBLE.

 

 

If Llloyds pass it on to a DCA you will probably be better off as Lloyds will have made a commercial decision that they are unlikely to get all you owe them so will sell it off to a DCA for between 10 and 20% of its real value. They often sell debts on when they know they havent got the correct paperwork to enforce it.

 

When selling on a debt they need to make sure its LEGALLY assigned otherwise the DCA can do diddly squat. On the whole DCAs are easily dealt with

[mightypotters01]

You CANNOT be sent to prision for a consumer debt, this confirmed here.

 

Protocol No. 4 to the Convention for the

Protection of Human Rights and

Fundamental Freedoms securing certain

rights and freedoms other than those

already included in the Convention and in

the first Protocol thereto

Strasbourg, 16.IX.1963

The governments signatory hereto, being members of the Council of Europe,

Being resolved to take steps to ensure the collective enforcement of

certain rights and freedoms other than those already included in Section

I of the Convention for the Protection of Human Rights and Fundamental

Freedoms signed at Rome on 4th November 1950 (hereinafter referred

to as the .Convention.) and in Articles 1 to 3 of the First Protocol to the

Convention, signed at Paris on 20th March 1952,

Have agreed as follows:

Article 1 . Prohibition of imprisonment for debt

No one shall be deprived of his liberty merely on the ground of inability

to fulfil a contractual obligation.

[veryweary]

The Loan deal is already in the court and I have only just got a copy agreement sent, (never got one before) from their sols and then only by the expedient of denying knowledge of the loan. Steve.

 

Have you received actual court papers to respond to or is this still a letter threatening court action?

[Pinky69]

Let's not try to frighten posters with talk of ""BIG TROUBLE" with DCAs. DCAs have no powers whatsoever and are easily handled - only a court has any power to make an order about any debt. Since you cannot pay anything it probably will go to court and you can offer £1 per month till you get back on your feet. As for debtor's prison, I know you meant that with tongue in cheek and I am amazed the posters who replied it no longer exists! There is no such thing and hasn't been since 1869!

[steve4kendal]

Have you received actual court papers to respond to or is this still a letter threatening court action?

 

Yes, I received court papers a couple of weeks ago and responded to say that I had no knowledge of the loan as I never had any paperwork at all from lloyds in spite of asking. They now sent me the copies,

Edited April 5, 2010 by steve4kendal

[the_shadow]

Yes, I received court papers a couple of weeks ago and responded to say that I had no knowledge of the loan as I never had any paperwork at all from lloyds in spite of asking. They now sent me the copies, so i wrote back to Lloyds HO complaining that I would never have taken the loan if I had known I wasnt protected for unemployment. Also wrote to their sols telling them about this. What happens next?

 

If you took out PPI on the loan, why are they now saying its not valid.......(Just wondering if its been mis-sold).. can you scan and post up the agreement if possible? minus any personal or identifying info though

 

Oh and have you received a default notice and termination letter? the default notice has to be in a specific format and allow a set number of days (14, +2 for first class post service, +4 for 2nd class or non royal mail) to rectify to be correct.

 

S.

Edited January 4, 2010 by the_shadow

[the_shadow]

If you've received court papers, have you sent the response back to the court stating you are defending? there are fixed timescales that you HAVE to adhere to else they will win by default.

 

You may want this thread moved to the legal forum for more legally bods to see it.

 

S.

[maroondevo52]

Thread moved to Legal Issues.

[Craftygirl42]

Those that can help, usually like to know what the Particulars of Claim are....you can find that on the blue N1 form from the court. Also if you have received documents from LLoyds, what did you actually receive and can you post up the Agreement if you have it.

 

It helps for others to help with your case