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Consequences of refusing to continue to pay a debt?


Surfer01
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We had an secured loan with Firstplus for £53,000 taken in Oct 2004. We then sold our residence in Feb 2006 and as FP frontloaded the loan and used Rule 78 to do the calcualtion we were left with a debt of £5700 although we had paid something like £6000 off the debt.

FP refused to reduce the length of the contract without a huge penalty resulting in us paying £70 per month. Last year we requested a settlement figure and this was nearly £7400 despite having paid about £3500 off the debt.

As we have only received one statement on the debt since 2006 we did a SAR in 2008 for updated statement. We have not had another statement since. Should they be supplying annual statements?

We wrote to them in June 2010 querying the calculation done in Feb 2006 using Rule 78. We also asked for a current outstandng balance and settlement figure. FP wrote back and stated that they were correct to use Rule 78 in in Feb 2006 but they did not supply an outstanding balance or a settlement as requested.

We wrote again on 7th October requesting outstanding balance and settlement figure and requested they give us a breakdown on how they arrived at these figures. In addition, we asked for an up to date statement showing all payments etc. They have not responded.

We are now considering if it is worth us cancelling our monthly payment to FP with the hope that they will take it to court. In our defecne we are proposingt to use S5 & S6 of the Unfair Terms Consumer Contract regulations as they used Rule 78 for their calculations and front loaded the loan when making the calculation. This is in additon to them increasing the APR every time the BoE increased their rates, however when the BoE lowered their rates FP did not.

What would the consequences of us stopping payment and if the worst came to the worst and the courts ruled against us, we would be able to manage to pay several months arrears as we would have kept this mony aside? By the same token I am on pension credit and my spouse is on ESA and if we lost in court we would request the payment to be reduced to £10 a month!

Somehow I doubt if FP would want this to go to court, but just in case we want to know our chances and the worst scenario..Thanks.

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In my opinion, worst case scenario is that you lose and get costs awarded against you which could substantially add to the debt.

 

On the plus side as you're on benefits the court is unlikely to order you to pay £70 a month, it could be as little as £10.

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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Thanks that is more or less what I was thinnking. I am very tempted to go all the way alsmost as far as the court date and then at the last minute pay the arrears to minimise costs. Obviously I will have to play it by ear as we go along and see how I can use the UTCCR to my best advantage.

I was thinking of sending them a letter stating that as we have had no resposne to our request for a settlement figure or statements and if we do not ehar from them within the next 14 days we have to assume that there is no debt anymore therefore no more paymenst are due.

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