Statutory minimum for living costs after debts???

[MrSooty]

My son has fallen into the snake pit of PDL vipers (and other vermin) and I am about to deploy my snake charming skills, learned from within these hallowed frames!

 

He has recently lost his job (misconduct) and is on the benefit that replaced Incapacity Benefit, as he has suffered from Depression and Anxiety for many years, so has no other income at present.

 

In addition, he has parted from his girlfriend and is now living at home, so we are dealing with a lot of 'fallout' after his world imploded..

 

So, learned counsel, given that he has racked up multiple debts that he is totally unable to service - and disposed of the proceeds on drugs and alcohol - is there a minimum amount of money he is 'entitled' to keep for his essential living expenses, or can his creditors simply plunder his bank account as and when they find money in it?

 

He is in the process of opening a 'parachute account' -as advised, thanks to previous CAG input on my behalf some years ago )

 

I can deal with the 'admin' side of things and am looking forward to dealing with some of the lovely DCA's who are swimming around in the pond currently (apologies for mixed metaphors).

 

My current thinking is that there is nothing they can do to enforce any of these alleged debts, some of which were activated 'under the influence' - and apart from a trashed Credit History, any potential court action will only result in awards of a pound or two a month at best - n'est ce pas?

 

It's quite touching to think I was so naive about debt once and how I used to TELEPHONE them when they wrote to me and give them information - oh dear, I'm cringing with embarassment again

 

I would appreciate any specific or indeed general advice that may be on offer which might assist me in relieving some of the pressure he is currently under - and yes, he is truly repentent and ashamed of his behaviour - much good it will do him now!

 

Many thanks - and keep up the excellent work guys!!

[renegadeimp]

If he is on government benefits, then he only has to pay £1 a month. If a PDL ever takes him to court, a judge could reduce that amount, or even tell him not to pay for a certain amount of time, then to come back to court for a re-evaluation.

 

As for the PDL's taking money from his account, do the following:

 

1. Write to the bank and tell them that under Regulation 55 of The Payment Services Regulations 2009, you instruct the bank to stop any and all CPA@s on the account with immediate effect. As this is enshrined in law, the banks MUST comply. Do not take no for an answer.
    
   
2. Cancel the current debit card by reporting it as lost.
    
   
3. Cancel any Direct Debits that he has with the PDL's
    
   
4. Write to the PDL and TELL them that you revoke all authority for them to process any transaction on the account.
   

 

This should secure the money. However, it is worth opening a parachute account so the benefits can go into an untouchable account. The old account can then be sent money as and when bills need to be paid. Never give anyone the new bank details.

 

Forget about how much living costs your son needs. He is on benefits, so he is only obliged to pay £1. If he cant afford that for any reason, then write to the PDL by email or recorded delivery letter and tell them that you will be withholding payment for a certain amount of time.

 

Never phone them. Always deal with them in writing.

 

If they get cocky, tell them to take you to court, where you can show a judge the facts.

Edited May 29, 2012 by renegadeimp

[MrSooty]

Thank you 'Imp' - if I may call you that - your response is refreshingly direct, specific and above all useful!

 

I will act in accordance with your excellent and practical guidance - I ams ure my son will proffer his thanks as well, when he sees the magic working

 

 

[MrSooty]

A quick follow up please - what would be his situation if he were to find another job in the near future - it won't be highly paid, but assuming he was to find himself in Court at some point, his ability to pay would presumably be 'assessed' - are there guidelines on this, or is it on a 'case by case' basis and the Court to decide on the day?

 

Thanks

[renegadeimp]

Start with the pound a month. Once hes working you can revaluate his situation and increase payments.

[MrSooty]

What are the advantages/disadvantages of opting for a DRO in his circumstances?

 

He now lives at home, has applied for ESA/JSA - outcome awaited and has NO savings or significant assets of value!

 

My son would appear to qualify for this option and seems prepared to go take this route.....

 

Looks like he could (make that we could) hand over the £90 fee and after a year, walk away 'debt free'

[renegadeimp]

If the person who owes the debt is on benefits then the creditor gets a pound a month. no negotiations.

[MrSooty]

Hi again Imp!

 

So is this the same as 'going it alone' and writing to the PDLs, as you have outlined to many others in similar circumstances previously, but through a more 'formal channel?'....

 

The way he described it, I thought it was a form of 'Bankruptcy Lite', which allowed you to 'hunker down' for a year and IF your financial situation hadn't changed in that time - your debts were written off!!!

 

The obvious question for me, would be, 'what happens if he did find a job during that time?' - do they come after you all over again and you pay according to your ability to pay?!

[renegadeimp]

No need for a Dro or the like. Simply tell his creditors that he is on benefits and theyre getting a pound a month to be reviewed every 3-6 months. Get a letter from the jobcentre if you like to prove it to them. Theyll stamp their feet but theres NOTHING they can do.

 

If he finds a job then you can write to the creditors once he has his first wage and offer a higher amount.

[MrSooty]

OK thanks for that!

 

So just to close this down and move on, I am now intending that I/he writes to each of the PDLs he has borrowed from, informing them that he is unable to repay these loans, due to him losing his job recently and that he requires a redemption figure from them, in order to set up a repayment plan (does he offer the £1 per month at this stage?)

 

Meanwhile, he needs to complete his application for benefits (not sure if he will end up on ESA or JSA - as he was on IB for a long time, until he found work, which only lasted several weeks.....)

 

By advising them of his inability to pay, they are obliged (in law) to freeze any interest being charged and refrain from applying further unreasonable charges by way of 'default fees' etc....

[renegadeimp]

Get a letter from the jobcentre confirming he is on benefits. Send copies to each creditor stating that thy are only getting a pound a month to be reviewed in 3 months time. Since each creditor will have official government documentation, theres nothing they can do but to accept. Theywont go near a court because its pretty much a guaranteed lose for them.

[citizenB]

If his debts are under £15,000 and he has no assets, then this would be the time to enter into a DRO or bankruptcy if the debts are over that figure.

 

Have a read of the NatDebt fact sheet in the link below - DRO is 5th one on the list. Your son will be discharged from all his debts after one year.

 

http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

[renegadeimp]

He wouldnt be paying that long for multiple reasons. he could get a job, the creditor takes him to court and the debt gets written off or the creditor might write it off themselves.

[MrSooty]

Thanks to each of you for your contributions!

 

I am very tempted by the DRO option (a worthwhile 'investment' of £90 on my part...) as it does appear to offer 'closure' after 12 months, which is something I would have been attracted to when we had some difficulties several years ago

 

I agree that he will certainly need to address his 'issues', but the inability to secure money from sources who are only too keen to hand it out without any vetting process or even paperwork changing hands, will be a good start - but it's not a cure, I realise....

 

There is clearly a real need for these PDL companies to be kept on a much shorter leash and as usual, the regulators will struggle to catch up with them, but the good news, is that CAG exists and thus there is hope for all those who seek it!

 

Many thanks!

[renegadeimp]

That code wont close any loopholes. It is a self made and self policed code designed and implemented by the PDL's themselves. Since they cant stop breaking the law and regulation now, what makes you think theyll abide by a self designed code?

 

Of course, i could be very wrong, but the history of the PDL "industry" speaks for itself.

[renegadeimp]

haha. Dont worry. I know what you mean, but i normally post realistically, even though most time i shouldnt I hope that this self policing will work out brilliantly, personally i just dont see it happening

[MrSooty]

All letters went out a few days ago - signed for, of course - BUT, just checked the tracking on one of them and see that it is 'being returned' as 'either undeliverable OR unaccepted by recipient' ....interesting!?

 

Not sure if this is a genuine error, or a tactic by the PDL - anyone got experience of this situation??

 

No problem with a re-send if appropriate, but what if not??

 

Off to check the rest now......

[renegadeimp]

Check the address actually exists. If it doesnt, then report them to companies house and OFT for false registration details.

 

If it does exist, then send an email to the PDL who refused the letter, with the same letter content. If they do not reply, then you can add all this as "failure to respond or negotiate" in a court case. This also means they are breaking OFT guidelines on debt collection whereby they are delibratley avoiding contact so the debt keeps escalating to an unreasonable and unrepayable amount.

[MrSooty]

Hi 'Imp' - do you never sleep!?

 

Just in process of checking the others and the address of the 'returned item' - may be an own goal yet, but we'll see........

 

Right, the address used on the 'signed for' delivery, is exactly the same as the address on a letter received FROM the PDL this morning - cute huh?

 

Email on its way shortly!!

[renegadeimp]

Haha. yea i sleep. Any replies to a thread im subscribed to, get sent to my phone. So it only takes a min or two to reply.

 

Make sure you check that the address actually exists. They could have moved away, or they might be housed in a temporary office while their main address is being refurbished.

 

Once you have eliminated all that, the only answer is that they have refused your letter. Which PDL is this anyway?

[MrSooty]

Email back from the PDL, with another email address to use for Debt Management and a postal address for the 'Hardship Team'

So, off to the PO again later with the same letter - and another £1.55

 

At least their language seems appropriate in tone.....

 

Thanks again!

 

Talk soon?

[renegadeimp]

Make sure you try and claim the cost of posting back. After all, it isnt your fault that they give out incorrect information.

[MrSooty]

I like your style RI

[MrSooty]

Hello again....

 

Not sure if a new thread is required for this 'topic' but it's the same person with the same problems, just a variation on a theme

 

One of the loans taken by my son, has defaulted to the 'guarantor' that was required at the time the loan was taken - his partner!!

 

She is now having daily interest taken from her Bank account and understandably, isn't best pleased with him or the PDL!

 

Does this get treated any differently?

 

We have already sent them a letter stating HIS circumstances, but does SHE need to do the same, as she is also on benefits, with two young children (not my sons)....

 

Messy business

 

One more small point, is that one of the PDLs has responded by requesting that he complete an income and expenditure form and send them £1 for a copy of his agreement, 'in accordance with the 1974 consumer credit act' - legit?

[renegadeimp]

If she is on benefits then she shouldnt be paying more than £1 a month. As a guarantor, yes she is obliged to pay the debt, but due to her being on benefits, the PDL should NOT be taking money out of her account. She needs to inform the PDL and get the money refunded. \Failing that, she needs to go to the bank and get chargebacks initiated.