Token Payments

[Wooks001]

Could someone please explain the pro's and con's of making these payments.

Does it improve my credit record etc.

 

The account was defaulted about 6 months ago, and I have very little chance of making meaningful payments due to long term ill health.

Making these payments on time mean no hassle for a few months, but am I just delaying the inevitable - account being sold on and on.......

If the account is sold on, is there a way in which the token payments could be a condition of the sale. Don't know how to explain it better but I'm sure you will understand what I mean.

[Hacked_Off]

First of all I'd be checking for charges, ppi, late payments fees etc and reclaiming. In most cases that brings the balance down a fair bit if not all.

[dx100uk]

tell us more about the debt please

 

dx

[Wooks001]

Full details are covered in another thread which many of you have contributed to:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?353797-About-to-miss-my-first-CC-payment-and-what-happens-next

 

My latest post might be worth reading as it states the current situation.

 

Short summary is that due to increases in gas & electricity costs etc I found myself unable to meet CC repayments. Contacted HSBC straight away but got nowhere, they continued to add interest and late payment fees for 6 months and then defaulted the account.

 

I complained to the FOS who have intervened, and HSBC have "offered" to accept token payments for 6 months.

During the 6 months when they added fees and interest etc my debt went up considerably, and token payments won't even cover a single late payment fee.

Last time I checked my credit history I had green ticks up to when I missed the first payment, and then red from then on.

 

The sort of thing I'd like to know is:-

(a) Would being able to make token payments earlier have prevented the default.

(b) Would it have prevented late fees and interest being added to the account.

© Do token payments show as a green tick in my credit record, or show up in some other way which benefits me in the long term.

 

I've never made token payments before hence the questions.

My financial situation is very unlikely to improve and I can't see HSBC accepting token payments forever.

 

Thanks for your time,

 

Wooks

[dx100uk]

a no

b.no

c.no.

 

this is a credit card?

 

dx

[Wooks001]

Yes it's a credit card so the answer is no to everything.

Thanks for the reply, just seems unfair, and at the same time makes token or reduced payments almost pointless in my situation.

Looks like I will have 6 months without loads of letters which is a result, but then it's likely to start again.

[citizenB]

What is the size of the debt.

 

Do you own your own home ?

[Wooks001]

With the interest and charges around £5K, apart from some energy arrears I am slowly paying off, it is my only debt.

I live in rented property and have no assets of any value that could be seized or sold.

[dx100uk]

time to get reclaiming me thinks

 

dx

[citizenB]

Righto, I wasn't just being nosey.. Just that a lot of banks are becoming quite litigatious of late as are the DCAs. I am wondering if it would be worth you making contact with HSBC at their Head office. No point it contacting the Collections department as they are like a broken record

 

As your health is a long term issue and you have no assets, then there is going to be no mileage in them pressuring you to pay as they are unlikely to get anywhere. I have drafted a letter below for you. Send it by Recorded delivery if you can afford it, if not, then do at least obtain a free proof of posting.

 

 

 

[Your address]

 

 

[Their address]

 

[Date]

 

 

 

Dear Sir or Madam

Account No/Reference No: XXXXXXXX

Further to my recent letter, I enclose a copy of my Personal Budget sheet which gives details of my present financial circumstances. As you can see my outgoings are more than my income and I am experiencing extreme financial hardship. As such, I'd be extremely grateful if you would consider writing off the outstanding debt owing. I have always taken very seriously my financial responsibilities but unfortunately my circumstances are so bad that I cannot realistically maintain payments of any kind.

 

Please take the following special information into account when making your decision.

 

[Enter paragraph outlining the special circumstances you have that you want the creditor to take into account.]

 

As you can see, my situation is very unlikely to improve in the future, and my continued high debt level may have a serious effect on my physical and mental well being. I would therefore be grateful if you would seriously consider this request for the debt to be written off.

 

I would appreciate any help you can offer me right now.

 

Yours faithfully,

 

 

This puts them on notice that you have a long term health issue and your finances are not about to improve any time soon. So TBH, there is little point in them saying they will accept token payments for 6 months, especially as they are simply increasing the debt by adding interest and charges. There will also be little point in them selling the debt on - as you will then just let the new owner know that HSBC have pulled a fast one in offloading a debt that is unlikely to be collected any time soon.

 

You need to add your reasons regarding your health and financial situation.

 

This will lay down a paper trail should you need to take your complaint to the ombudsman at a later date

[Wooks001]

Hi Folks, thanks for the replies.

I know you aren't being nosey, if you don't have the details how can you advise anyone.

I'll answer any questions as fully as possible asap.

 

The letter requesting writing the debt off is worth sending but I don't hold out much hope to be honest.

I had already been to HSBC's Head of Complaints - "no bank error in this matter" was the response.

 

I then took my case to the Ombudsman (who didn't agree) and amongst other things this means that HSBC are now willing to come to an arrangement, whereas before they had said no chance.

I can't say any more publicly until they either comply or not, and I've seen what if any terms/conditions they try to impose etc in the small print.

[Bazooka Boo]

If they cannot or will not stop adding interest and charges then there is little point in paying them anything, as they are simply using you as an easy avenue of revenue.

 

I'm in two minds, a) stop all payments until they stop all interest and fees, or b) pay £1 a month for the life of the debt.

 

Keep a tab on exactly what you physically owe them and what they have added in fees/interest and charges to show a judge if it ever materialised.

 

This is why the financial industry is corrupt, they continually bleat about "tell us immediately if you are in financial difficulty so we can help" then all they do is laugh at you, tell you there is nothing they can do and you have to play by their rules or face the consequences, ridiculous!

[Wooks001]

I totally agree mate, but I'll see how it goes for now and update later.

Signed the petition by the way, currently being pressured into doing charity work.

If I could do charity work regularly, I'd do paid work wouldn't I.

[Bazooka Boo]

Signed the petition by the way, (Cheers!) currently being pressured into doing charity work.

If I could do charity work regularly, I'd do paid work wouldn't I.

 

Whose trying to force you to do slave labour? DWP!!!

Tell em to stick it!

[TommyCat]

Hi, how did you get on? Did they write off your debt? Thank you.

[Wooks001]

Haven't got that far yet still waiting for compensation (surprise surprise).

Going to ask but I doubt they will agree cos they lost.

[sequenci]

Just to add to this thread. HSBC are likely to consider freezing interest and charges providing they can see that your offer of payment is fair and reasonable (e.g. supported by a personal budget sheet). it might take a few attempts in writing to get them to agree but usually they will do. If you have other creditors you should look to treat them in the same way also.

 

Seq.

[Wooks001]

I did ask HSBC to freeze interest and charges and they replied we only do this in exceptional circumstances, but wouldn't say what these were.

They also advised that they do not set up repayment plans for customers who are not in employment, and refused to set one up anyway because I refused to speak to one of their advisors despite being required to do so in their procedures.

 

Hence my appeal to the Ombudsman and compensation which arrived this morning:-).

 

Default notice was issued ages ago so they have stopped now anyway.

Ombudsman has ordered them to accept token payments hence this topic.

 

Now I have to consider the pro's and con's of making them, now that I am able to do so.

[Happyhippy1959]

HSBC, what a bunch of T**sers, ( we don't freeze interest and charges only in exceptional circumstances ) and no repayment plan for benefits,,,, Tell them in no uncertain terms then until they stop adding charges and interest and come to a sensible decision then no payment till Hell Freezes over, as Boo say's what can they do to you. !!!!!!! Your on benefits, no assets the whole industry is a joke. I would like to see the face of the DJ when they put that bad boy in front of them.

 

But to cover your back, paper trail, paper trail, one thing I learn't on here, is to reply by e-mail if possible, to every threat sent. But thanks to these great guy's and girls always remain tough and if in doubt ask on here, they will put you on the straight and narrow. Have £80k of unsecured, 34k was a secured loan short-fall, most of mine were unenforceable and thanks to these guy's life is a bliss. Yes the Hippy still lives thanks to CAG. Morning Boo and Brig and others.

[Halibutt]

This is the letter I send for people if they're on benefits. If you think it's relevant to your case, just adjust the text accordingly. You can leave out the I&E paragraph if you wish, though only a judge can order that one is filled in.

 

By Royal Mail Recorded Delivery

Dear Sir/Madam,

Account Ref: 1234567890

 

With regards to my current “repayment agreement” with you, I am in a position to be able to offer you no more than £1 per calendar month.

I own no property, have no savings or appreciable assets and rely on [Job Seekers’ Allowance] as my sole source of income.

I quote the Department of Work & Pensions, who state:

“You will be paid the sum of £72 per week, which is the legal minimum on which the Government believes you need to live on.”

During telephone calls, your staff have erroneously asserted that I am obliged to provide you with a personal statement of income/expenditure in order to put a repayment plan into place.

I have been advised that this 'personal' information is just that - personal.

However, following the insistence of your staff and their claims that an income/expenditure statement is a requirement regarding this matter, I have obtained a Court orientated Income and Expenditure Form, to which, only a Court and/or Judge can legally have access, and filled in the details required therein.

 

Following the revelations about my financial status that completing this form brought to light, I would like to thank you and your staff for pointing me in the right direction regarding my rights.

 

From this information, it is obvious that I currently have no disposable income whatsoever.

It has been suggested that, following discovery of this situation, a County Court Judge would, in all probability, order that I can afford no more that £1 per month to each and all creditors, which of course includes you.

Therefore, I would formally request that you freeze any interest and late payment charges as they would not be productive in this case.

Also, could you please supply me with the relevant information/documents necessary for me to set up a standing order to continue paying instalments towards the amount owing on the above account at a token rate of £1 per calendar month.

Please note that I have no intention of avoiding any legally and fairly claimed payments on the above account, but I firmly believe that my offer of repayment is appropriate, considering my current circumstances. Should these circumstances change, I will, of course, notify you as soon as possible to arrange repayment at a higher monthly amount.

Yours faithfully,

 

PRINT NAME DON’T SIGN

 

Hope that helps. H. x

[sequenci]

That's a little long, this one's perfectly fine:

 

Since making the above agreement with you, our circumstances have changed. We cannot now afford to make

the agreed monthly payments because:

... [your paragraph added here]

 

We enclose an updated budget summary which shows our total income from all sources, and our outgoings.

 

As you can see, we have only £_____ each month left for our creditors.

 

In view of our circumstances, would you please accept [no payment at present] [a token offer of £1.00 per

month], to be reviewed in six months. If interest or other charges are being added to the account, we would be

grateful if you would freeze these so that the debt does not increase.

 

Should our circumstances improve, we will contact you again. We would be grateful if you would send a

[paying-in book] [standing order form] to make it easier to pay you.

 

We look forward to hearing from you.

 

Yours faithfully