Payday loans: Help needed I think I'm in too deep and I want to get out

[ollyhawkeye]

Hi there,

 

I have been monitoring the forum for a while but decided to join today and finally post my situation and steps I am making to try and put things right.

 

Firstly I think in the last few days I have finally realised that I have a problem and a severe lack of respect for myself and obtaining credit. I am putting my family at risk and I need to sort it out as quickly as possible.

 

I currently have about £5-6k of payday loan debt due to be debited from my account on the 31st of Dec, this is largely roll over debt and PDL taken out to cover the payments on others etc.

 

I currently have a good credit rating. I also have a good salary but I have overcommited myself just to make ends meet. I am in the cycle but I need to get out. I have a lot of other debt including a car, an unsecured loan and several credit cards.

 

I have contacted StepChange and they are sending out the forms for a DMP as we speak, I used the online service. The biggest issues, I have other than ruining my current credit profile (you reap what you sow though right?), is firslty that my wife is unaware and will probably suffer a mental breakdown if I tell her and secondly that my primary account, where my wages are paid into and PDL come out of, is also where our joint account is.

 

I currently have a £5k overdraft facility with Santander on my primary account. I have already set up a parachute account and still have time to switch all my wages and necessary DD etc.

 

My biggest concern is that if I switch to the other account Sanatander will use our joint account to rectify my primary current account. I have to stop this from happening.

 

I want to pay everything back, Loans and Credit cards are under control (and cut up), my overdraft is free, it is solely the PDLs which are the issue.

 

So my questions to the forum are.

 

Is a DMP the right way forwards?

Should I switch my wages/Direct Debits to the parachute account?

When should I contact the PDL lenders?

Will the DMP contact them for me?

Can Santander take money from my Joint account?

 

Any help or advice would be greatly appreciated, I have to get on top of this and I want to be responsible for my actions.

 

Thanks in advance.

[Crocdoc]

Can you tell us the area you live in as advice will vary between Scotland and other parts of the UK

[ollyhawkeye]

Ah yes, apologies. I live in the Leicestershire, UK.

[DH84]

Just to clarify, is your overdraft interest free and would it cover your pdl payments?

[ollyhawkeye]

Just to clarify, is your overdraft interest free and would it cover your pdl payments?

 

Sorry, I meant I have a 5k overdraft and I am up to the limit of it already. It is currently interest free and cannot be extended.

[Jamie Kingston]

How many lenders, how much can you pay each month and how much do you owe? Remember, DMP only if its free and the earlier you contact the lender the better. Never give out bank details and change bank account for wages.

[ollyhawkeye]

How many lenders, how much can you pay each month and how much do you owe? Remember, DMP only if its free and the earlier you contact the lender the better. Never give out bank details and change bank account for wages.

 

So will cancelling my card not be enough to stop them taking money from my account? I do have the parachute account but i am worried about all of my other payments being affected.

 

I will be contacting all of the lenders next week which will be well in advance of when they try to take payments.

 

I've now entered the DMP with StepChange for £190 per month to begin with, I am sure I will be able to increase this in the coming months. I owe around £5k in PDL, across 6 lenders, with the DMP this would take me circa 26 months to pay off. Far from ideal but it is currently my only option at the moment.

[Spiral123]

First thing is dump the DMP if they are charging, as probably the first 3 months will go directly to the DMP, making your situation worse rather than better. There are free ones out there like CCCS (may have changed name recently?) and Payplan.

 

Secondly list all your PDL's and how much you owe each currently. Some will be easier to negotiate with than others. I personally would not contact them in advance as the chances of some or all of them "raiding" your account will increase.

 

As regards cancelling your card, you will also need to leave with your bank a letter to tell them to cancel continuous payment authority with each of the PDL's, depending on your bank some will try to fob you off that they will be unable to do this. Hand deliver this to your local branch so in case you are raided by these parasites you have something to fall back on as regards to claiming a chargeback.

[ollyhawkeye]

Thanks for responding, I already feel better about this as people are giving me advice, wheras previously I've been shouldering the problem all by myself.

 

To answer the DMP question, StepChance are the CCCS under a new name, so my DMP is free - one piece of advice I picked up very quickly from the site.

 

I will deliver the letter by hand to my bank next week, I am guessing it is best to discuss this with them rather than putting my head in the sand?

 

So I should let them try to take payment, let it fail, then start sending them all letters? Is the timing important?

[Jamie Kingston]

dont wait to default - it will mean it more expensive because then they can justify charges for missing payments. Get in touch as early as possible and explain the situation giving them notice not to allow them to debit further payments.

[ollyhawkeye]

Thanks Jamie.

 

My biggest concern is either Santander removing my overdraft facility or the PDL people clearing me out. I think I might just swap all my DD over to the parachute account and work from that. The only problem then is as my wages will no longer be going into my Santander account surely they will come looking for their overdraft to be repaid immediately.

 

Man this is stressful.

[Guest Peer Lawther]

Hi ollyhawkeye,

 

I'll not go into detail re: your DMP as you're already in touch with us, but if you need more details on cancelling a CPA we've got a continuous payment authority blogpost that gives more details (it agrees with the advice Spiral123 gave earlier):

http://moneyaware.co.uk/2012/07/how-to-cancel-a-continuous-payment-authority-cpa-on-a-payday-loan/

 

Good luck - as we always say, the hardest step is the first one.

 

Peer

[ollyhawkeye]

Thanks Peer, I really appreciate everyone stepping in with advice and help. I wish, like everyone else I am sure, that I had done something about this a lot earlier. I will take a look at the blog post now as I need to get that set up to protect my earnings and make sure that the right people are paid in the right order.

 

I've been reading the CPA cancellation thread, have things moved on now, are the banks up to speed on cancelling these?

[Guest Peer Lawther]

Hi ollyhawkeye,

 

The bank should be up to speed, but we still hear that some don't understand that you have the power to cancel these yourself. You may need to be quite insistent.

 

As an aside, the article I linked to is the most viewed page on our blog by quite a way, so it's a prevalent issue at the moment. This hopefully means that banks are getting used to receiving CPA requests like this.

 

Regards,

 

Peer

[ollyhawkeye]

Does anyone have a letter template for the bank so I can get the CPA cancelled?

[ollyhawkeye]

I've found the ones for the Lender. Should I be emailing and posting these ones? I have a loan with Swift Sterling and they are in Malta! how is that even legal?

 

I am assuming that cancelling with the bank first should be the correct step?

 

Any advice would be appreciated.