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HELP!!! - £20K debts - out of control - where to start


MrsH77
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Hi All,

 

I'm looking for advice for my brother, who has just revealed he has just over £20K of debt which is now out of control!!!

 

The debt is all with the Halifax split as follows -

 

Current Acc = overdrawn £1841 and incurring £30 per month charge

 

Credit Card = £9509 (credit limit £9000) and estimated interest next month = £175. I am worried that the fact he is now over the limit due to the interest, he will also incur charges for this too, which will just push the debt up and up

 

Personal Loan = £8805 this has increased by £286 in just ten days between letters, so again if this sort of increase is happening, its worse & worse!

 

His situation is - lives with parents, has no regular income as has been trying to set up his own business (i think this is where all the borrowing has come in) has no assets worth speaking of.

 

Obviously I need to act FAST and write to the halifax to explain the situation is now unmanageable, but i need advice on what to tell them etc, it is possible that he will be able to make minimal payments, but due to the size of the debt, they may not accept this.

 

Also can we get them to agree to freeze the accounts and not charge any more interest or default charges etc?

 

Once we are corresponding, I'm hoping for a final solution, as he is now at his wits end and I'm worried for his sanity!

 

Then finally, any advise on bankruptsy, DRO's etc?

 

thank you in advance for any help!!!

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Hi, Welcome, the first thing

you must do if you wish to

help your brother is that

you must get his authority

to act for him, nothing can

be done until you do that.

How old is your brother I

am astounded that he as

been able to get so much

credit without a regular income.

Get the signed authority and

come back to us.

 

Brig.

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Good idea, from where does your

brother earn his income and is he

on PAYE or self employed for his

current income.

Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

Please Consider making a donation to keep this site running!

Nemo Mortalium Omnibus Horis Sapit: Animo et Fide:

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1. His situation is - has no regular income - has no assets worth speaking of.

 

2. It is possible that he will be able to make minimal payments.

 

3. Also can we get them to agree to freeze the accounts and not charge any more interest or default charges etc?

 

Regarding your 3 points above, if your brother was on benefits, for example, and a creditor took him to court a judge would not make him pay more than £1 per month. It maybe worth writing to each creditor explaining the situation and asking them to freeze interest and offer £1 per month per creditor.

 

One thing I know for sure is if nothing is done the interest will continue to spiral out of control.

 

It can't hurt to ask.

]

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Hi All,

 

Thanks for your comments.

 

In answer to your points

 

1) Yes I have his written consent to act on his behalf

 

2) The income he is getting is currently 'cash in hand' for vehicle repairs & maintenance, and from bank of Mum & Dad

 

3) He is 38 I think the credit card & loan agreements were set up some time ago when he was employed and getting a regular income

 

4) He did a tax return last year as being self employed & his income was under the £5k threshold, so he doesn't even pay income tax, he is not on any benfits

 

5) I think its worth a go firstly contacting the Halifax to get them to freeze the accounts so the interest & charges stop, and then try to agree a repayment plan

 

Thanks agaion for all the help

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Make sure he doesn't go near

any easy to get credit like pay day

loans.

Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

Please Consider making a donation to keep this site running!

Nemo Mortalium Omnibus Horis Sapit: Animo et Fide:

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  • 1 month later...

Hi All,

 

Time for an update and some advice please -

 

I have finally received a copy of the loan agreement and the loan statement, the agreement is signed but there is clearly a box that was not ticked which is for the Personal Loan Repayments cover, however on the statemtn the Halifax have added a whopping £4618.53 insurance loan plus interest totaling £5869.92!!!!

 

I am hoping that as the box is not signed, they cannot apply these charges and want to write and ask them to credit the amount plus 8% back onto the account - CAN I DO THIS?!?!

 

I also think his financial situation would not be nearly as bad if this had not been inflated on his loan and pushed the repayments up as the loan and repayments would have been much lower

 

Need to know what to do next.....

 

Thank you in advance!!!

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If you did not tick the box for the pp then you can claim as you have

stated.

Claim it back, have a read of the threads on this for guidance.

Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

Please Consider making a donation to keep this site running!

Nemo Mortalium Omnibus Horis Sapit: Animo et Fide:

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Now you have your brothers authority write to each creditor to explain the situation, ask for interest and charges to be suspended and offer payments of £1 per month for 6 months to give you time to sort out his finances. Send the letter by recorded delivery. More than likely thy will reject and ignore your request and regardless of this make the payments of £1.

This may be of use latter should they take your brother to court to show they acted unreasonably.

 

Send SAR and C.C.A. requests to all the creditors by separate letters by recorded delivery.

You will then be able to find out what data they have and anything you can use in your favour.

 

If you get any default notices keep them and the envelope that they came in and write on the envelope the date the default notice was received. These quite often still aren't written correctly and allow the correct period of time.

 

Given the circumstances you have said so far it may be best to think about Bankruptcy but not yet.

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Hi All,

 

Time for an update and some advice please -

 

I have finally received a copy of the loan agreement and the loan statement, the agreement is signed but there is clearly a box that was not ticked which is for the Personal Loan Repayments cover, however on the statemtn the Halifax have added a whopping £4618.53 insurance loan plus interest totaling £5869.92!!!!

 

I am hoping that as the box is not signed, they cannot apply these charges and want to write and ask them to credit the amount plus 8% back onto the account - CAN I DO THIS?!?!

 

I also think his financial situation would not be nearly as bad if this had not been inflated on his loan and pushed the repayments up as the loan and repayments would have been much lower

 

Need to know what to do next.....

 

Thank you in advance!!!

Is your brother eligible to make a claim on the insurance?

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Is your brother eligible to make a claim on the insurance?

 

He did not know he had a policy.

 

I have written back to Halifax to question why they added and insurance loan when the box on the agreement was unticked and I have also asked them to provide a policy number and the terms & conditions of the policy as he has never received anything formal regarding any insurance!

 

I will see what they come back with as it MAY??? be possible that he could make a claim of it if its legit?

 

I have worked out that the insurance loan plus interest he has been paying since 2007 plus the statutory 8% would is more than the balance left on the loan, so I have suggested a refund and to use the approx £490 to be used against the credit card. Of course they will reject this, but its worth a pop!

 

I have also set up online banking for the CC and the current account and will next go through these and look at the charges etc, and see if i can get them reveresed (with interest).

 

since I first wrote to them 1 Oct, and asked them to stop collection activity, freeze interest and charges, they have failed to acknowledge this request and continued to make the charges.

 

Also they have failed to stop theire collection agents Albion Collections & Power2contact, he continues to get about 5 calls a day and has even had a doorstep visit so I have also advised the Halifax of a formal harrassment complaint.

 

i will await theur respinse and keep you updated!

 

Any more advice is always greatly appreciated!

 

Many thanks

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