New to forum, just starting debt management

[nomoremoney]

Hi all. Have been reading on here for some time - there's lots of useful information and advice.

 

Decided to sign up and join in.

 

I have about 10k unsecured debt over 2 loans and a ccard.

Health problems have caused me to dramatically reduce my working hours. Since then my OH who is self employed is losing lots of work basically due to the credit crunch.

 

Last few months I've been struggling and practically lived overdrawn. So I've cut down on all unnessesary things (sky, general life insurance etc), and done a budget plan from National Debtline. I think I found that from Citz Advice. I was tempted to just cancel DD's and ignore but all advice says deal with it upfront.

 

I've typed up my letters from templates offering a token £1 a month as basically my essential outgoings equal my incomings. Included budget plan.

 

I actually work for one of the major banks (dont hate me!) so have staff bank accounts (luckily for me most of the unauthorised overdraft charges are waived for staff - I'll leave you to argue about that amongst yourselves!) and the major loan is a staff loan.

 

I am worried this will affect my employment. As far as I can tell, company policy states they're only bothered if debt problems get as far as an IVA or worse as you'd be sacked due to you becoming a liability (on a case by case basis).

 

But where is this going - I can't imagine paying just £1 forever. I'd rather get out of this mess.

 

Two of the debts are smaller (about £200 and £300), so I'm thinking of trying to pay those off instead of adding them to my credit score which is probably ruined by now anyway.

 

So I've not told them yet, only sent my letters to the appropriate departments. The bank is always pointing out that staff need to keep their banking as a customer seperate from their role as staff, so I hope this now works both ways!

 

In process of opening bank account up elswhere so my wages and benefits cannot be grabbed (especially by ccard they like doing that) but think staff policy states u have to be paid to a staff bank account. I'm sure this cannot be legal..

 

Basically I'm introducing myself, explaining my situation and asking if anyone has any advice? Particularly around my being employed by my creditor!

 

Thanks very much in advance.

[reallymadwoman]

A difficult one.

 

Other than the staff issue, all I can say is that you've done everything you need to for the moment. No doubt some people will be telling you to check all accounts for proper agreements, charges etc, but the staff issue sort of puts paid to that too, assuming you want to keep your job!

 

One thought which has occurred is that as you've had to reduce your hours due to health issues, might it be worth a chat with a trusted manager about how the bank could help you through this difficult period - they know your history so perhaps they might be more sympathetic. After all, it's not as if you've been jaunting off around the world running up debts.

 

I'm sure you've already done it, but make sure you're claiming any benefits you might be entitled to. Is there any chance you might get tax credits, or more tax credits?

[nomoremoney]

Thanks for reply. I'm sure the ccard hasn't a valid agreement it's in wifes name had her consent but she wasn't present to sign etc. But I don't think I'd be there very long if I started disputing it. Wouldn't even dare try to claim charges (still paid a few hundred despite lots of them being 'free').

 

Actually I feel I'm deeply resented for changing hours had to make it a grievance to get them to let me and now they're looking for any excuse to sack me. This has caused me so much stress I'm in a catch 22 it's difficuilt to meet targets under this pressure.

I'm sure with my physical health alone I'm entitled to push for full time sick (already get high dla) never mind recent mental state but I don't want to get in that position. I do want to work I thought I would do a much better job part time than struggling fulltime. But i guess things don't always go as planned. Plus if I did that it would destroy my CV.

 

I have claimed working tax credits that has literally saved us from starving or from not paying priority bills. Have claimed for housing benefit but it's been nearly 2months theyve still not decided yet. Website quote said £100 HB but on same page said £0 for LHA so I'm confuesd with that.

 

Only other bill I could cancel is our mobile phones, but this will simply go to collections as they're on contract. Plus they're on a business tarriff used alot in that way.

Edited January 14, 2010 by nomoremoney

[loobyloo85]

Hi, it may be best to check with your HR or welfare officer about keeping your bank account, if it states in your contract that you have to keep this. It may be worth keeping this open, and then opening a new one for the rest of your income, and you can transfer your wages over to this other account once paid?

Have you considered doing a debt management plan, rather than you having to pay £1 each month, you can pay whatever money you have spare at the end of the month according to yoru budget, and make this payment until your debts are cleared. There are free of charge DMPs out there, and they can liase with creditors and make payments on your behalf.

[nomoremoney]

Good idea i'll check if its an actual clause or not I doubt it is. Or just do a standing order anyway to another account on payday.

 

What do you mean by an actual plan? I've done the income and outcome budget planner and we're just about living beyond our means but without any luxaries! So technically cannot even afford the £1 token payment.

[loobyloo85]

Hi nomoremoney

 

I meant entering into a payment plan with a company, however to do this you would need a minimum of £75 at least to pay in, which at the moment you cannot afford each month.

I would suggest making the £1 token payments, and writing to your creditors to inform them of your financial situation, in the meantime until your circumstances improve. Fingers crossed with the bank account.

[nomoremoney]

Right I've recieved a letter for each of the loans, not heared anything for credit card.

 

First staff loan

Although I recognise this may be all you can afford, I regret the offer would not be sufficient to enable the account to be retained at this office.

I therefore propose to close your loan account and transfer the balance to the Branch Recovery Unit who will contact you to discuss your proposed offer, however, prior to this I will issue a Formal Demand for repayment.

It would be the bank's intention to register details of the account with Credit Reference Agencies.

 

Staff loans are not credit scored and do not show up on credit reports.

 

Letter for 'customer' loan is a bit stranger. It states Default Notice at the top.

Served under Section 87(1) of the Consumer Credit Act 1974

A breach of the agreement has taken place.

The provision of the agreement breached: The requirements to make repayments on their due date.

Nature of breach: Your failure to make repayments as required by the agreement.

To remedy this breach you are required to take the following action on or before 09/02/2010: Providee funds to repay the arrears of £0.00.

If the action required by this notice is taken BEFORE THE DATE SHOWN no further enforcement action will be taken in respect of the breach.

If you do NOT take the action required by this notice BEFORE THE DATE SHOWN then the further action set out below may be taken against you or a surety.

1. With effect form the date shown above the Bank hereby terminates the Agreement and demands immediate repayment of the full amount outstanding which is £1984.58. Daily interest charges of £0.62 will continue to accre from the date of this notice until fulll repayment is made.

2. The Bank may take steps to enforce any security specified in the Agreement.

3. If you have other borrowing faciilities with the Bank some or all of them may be terminated.

 

They do not mention my letter. I have not actually missed a payment with this one yet, so its obviously in response to the letter.

 

I've applied for the other bank account, but its taking forever apparently theres a 7-10 day processsing delay!

[nomoremoney]

We have also been turned down for Council Tax Benefit and Housing Benefit due to our earnings. Does anyone know what the actual maximum income is to receive this?

Thanks

[reallymadwoman]

Firstly, regarding benefits, I don't know what the maximum is, so I can't help. You might get a quicker response if you ask the question in a new thread in the 'benefits' forum. I know there are lots of really helpful people in there.

 

Secondly, with regard to the loans. So far as the staff loan is concerned, I wouldn't worry about it too much. Let them transfer it to 'collections' who may be more amenable to a reduced payment, and if they're not we can deal with it as and when.

 

Regarding the 'customer' loan, as you say you haven't missed a payment yet, issuing a default notice is odd to say the least. I have no idea what you should do, if anything. Presumably when/if you do miss the next payment (when is it due, by the way?) that account will also be passed to collections.

 

If you weren't staff, I would actually be celebrating since if you do nothing they would terminate your account on 9th Feb, which in the circumstances would be 'unlawful recession of contact' since there's no breach and you would then owe what it says on the default notice as arrears - zero.

 

What does your staff handbook actually say about arrears on loans etc?

[nomoremoney]

I have now today missed one payment to the staff loan (2 days after letter was dated). The other loan is due on the 29th by Direct Debit (which I have cancelled and they immediately sent a new mandate out).

I don't know what relevence they think 9th feb has. Maybe final due date and ddebit comes out early.

 

I think the staff handbook just says its gross misconduct not to notify management of bankruptcys and ccjs, included in a list of things like criminal offences and immigration etc.

 

On the HR guide it mentions that if you become bankrupt you must inform your line manager so that your employment can be reviewed case by case as a risk assesment. Doesn't mention specific things like loans, but I'll have a good look through tomorrow.

 

I am living in overdrafts so I need this new bank account asap, because if they suddenly take away the o/d then it would take about 2 months wages to pay all back.

[reallymadwoman]

Sort the parachute account immediately. If they still insist on paying your wages into your staff account then transfer the money to your new account immediately it is paid in, since they could also help themselves to the loan payments.

[nomoremoney]

Right my 'parachute' account has finally been opened today. Phoned HR they're happy to pay salary into new account - it was a new rule brought in since I joined so not in my contract. Feel bad about abandoning existing bank accounts in an overdrawn mess.

 

Have recieved two letters. First from staff loans giving me a formal demand for repayment. If no response by 15th Feb it goes to recovery.

 

Second from wifes credit card. It reads

 

Regrettably, we are unable to accept your current offer of repayment as this is too low. However; we appreciate this may be a difficult time for you and would be prepared to look at this matter again if you are willing to propose in increase in your offer.

Please ensure you contact us by 15 Feb so that we can review future payments to the account and hopefully assist you in resolving any problems you are experiencing.

Please remembeer, it is important to make your payments by the due date shown on your monthly statement to avoid having a negative credit rating and additional fees being incurrred.

 

We were also bombarded with phonecalls for ccard - an automated thing to pay ballance. Finanlly stopped after I went to make payment then put phone done before completing lol.

 

Heared nothing else for other loan, and 9th Feb deadline to pay £0 just passed...

 

Have missed one payment for each loan and the c/card. Second ccard payment due about now (which of course is a double min payment), 2nd loans payments missed within next 2 weeks.

 

I appreciate my offer of £1 a month sounds daft, its just a token payment as so many sources advise. I simply cannot afford any more so its a bit of a stalemate. I feel like offering say £20 a month (minimum is about £85) but realistically something else will suffer like a utility bill so I'm taking this sites advice and sticking to it. Any advice to convince them to take this seriously?

 

Thanks

Edited February 10, 2010 by nomoremoney

[nomoremoney]

Had letter for customer loan saying they dont accept offer, but pay it anyway whilst they decide how to procede..

 

Not heared anything from staff loan since demand. Assume has gone recovery.

 

Heared nothing else from ccard, but I didnt reply to there letter refusing my offer.

 

They're now ringing us between 2 and 6 times per day per phone (house and mobile) plus about 2 texts a day. When you answer it's a recorded message saying we missed a payment. Press 1 to pay it (automated payment line) press 2 for operator. Several times pressed 2 it puts u on hold for 10mins, then says sorry we're too busy please phone us back! - ie use your own phone bill whilst your on hold.

 

Anyway to stop these calls as we're both getting really stressed by it now? I've now gone off work with stress on top of all other health problems.

 

Thanks

Edited March 7, 2010 by nomoremoney

[nomoremoney]

Got a letter for staff loan from Central Debt Collection Services (small print says this is a division of the bank) saying pay all in 7 days else a default and legal proceedings or professional debt collection agency.

 

I'm really stressing about this - is there any chance they'll start legal procedings? It's 6.5k and even with court order there's no way could afford to pay it.

 

Had a final warning from ccard, they still ringing 6 times a day - thinking of getting phone cut off.

 

Heared nothing from other loan in nearly 2 months.

 

I'm glad my parachute account is working great, no overdrafts to worry about and never overdrawn as all working to plan within budget.

 

Been off work 2 months with stress im at the end of my tether with it all.

[nomoremoney]

Got a letter today for staff loan giving 24 hours last chance before either a personal visit or a CCJ. Can't cope with this now I'm at my witts end.

 

Letter for credit card says pay about £250 and they will credit us with £15 as a demonstration of their commintment to helping us.

 

However also got a letter today saying that we may now be entitled to housing benefit. Don't know whats changed, still on same wage (still full pay sick) but I guess there's no harm in filling in the new form they sent.

[loobyloo85]

Is the staff loan a seperate loan, or one thats payments is deducted from your wages? I would suggest if it is a seperate loan to contact whoever deals with the staff loans to arrange a payment with them to suspend further legal action. The CCJ letter could have been a threat to try to scare you, but probably best off making a pro rata payment to them in meantime.

With regards to the housing benefit, if your income has nto changed, i dont know why you would now be entitled. However, as you say there is no harm completing this just to see. Just be careful of a possible overpyament. Have a look on www.entitledto.co.uk to see what you are entitled to xx

[nomoremoney]

Just thought I would give an update. It's about 18 months later. I left my job last summer after several months sick and went self employed. Although only earning about £100 a month, working tax credits, housing and council benefit mean I'm better off than when employed! I see what they mean about the benefits trap. I'm building up my business, but getting to the point where I need to increase my profit tenfold to get past the stage where it would cancel out my benefits and I'd be no better off, actually worse off!

 

As regards the debts, I've been paying £4 a month to 'customer' loan and heared nothing from them.*

 

Staff loan gave up after a few months of letters.*

 

Wife's ccard generally has about 3 months with a debt collector who threaten all kinds of things before not doing anything other than writing a letter saying they give up and are passing the debt back! This has happened about 4 times with different debt collectors. Also have a daily phone call.*

 

Worst are the overdrafts. Literally 3 calls per day and about 3 letters per week. Letters of empty threats go in the bin and I let the phone ring. If I'm bored I pick it up and put it straight down, they ring straight back and will do another twice! Caller display is fantastic! This btw is literally 3 calls per day for 18months!! Isn't that harassment?

 

All this time I wouldv been making payments but they refused my realistic offers, so I guess thanks to them I've only 4 years left till statute barred.*

 

All the above are for about £15k combined. Daft thing is the only one who actually tried a doorstep visit was for wife's catalogue for about £250! I just said she doesn't live here, the polite man left and I've not even had a letter since! The letters seem to try and make doorstep collectors sound scarier than court!

 

I think half as much money has been spent chasing me from what they are trying to recover!

 

What I've learned is there was no point in getting so stressed about it all. I've got genuine reasons for this mess and the letters are just talk. If they did go to court I've no assets or income so what's the point.*

 

I thank everyone here for helping me to get back on my feet and for all the fantastic advise both in this thread and many others.*

 

Just thought I'd update to help others see it's not so bad

[reallymadwoman]

Thanks for the update and I'm glad it's all sorted itself out in the meantime.

 

Have you thought of changing your phone number?

[nomoremoney]

Thanks for the suggestion. My contract runs out with talktalk next month so I thought maybe if I shop around.

 

However Lowell found my wife's new simonly mobile number somehow so I think a house phone would be easy. The sneaky ones have started ringing from a mobile number to try and trick us into answering!

[The Ghost]

Send them a Telephone Harassment letter. That should stop them.

[nomoremoney]

I don't want to acknowledge anything in writing as it's already been 2 years I might make it to statue barred.

[The Ghost]

In what way is asking them to stop harrassing you with endless phone calls an acknowledgement of debt? It isn't - it is simply a request to stop harrassing you.

[nomoremoney]

I guess a carefully worded letter should suffice

[The Ghost]

I'm sure there'll be one in the library you can tweak.