NW Loan Arrears help please ?

[Faraway15]

Apologies in advance for the long post. I am hoping that someone may be able to give me some useful advice.

 

We took our a NW Loan in 2010 for the sum of £37K , as advised by the bank to amalgamate business debts.

They had put us in a corner, ie pay back everythign within one year or take out this loan.

At the time we didnt have a clue about DMPs etc.

Although these debts were run up due to the business they are in our personal names and currently unsecured.

 

In 2011 we entered a DMP with our other personal creditors as were still struggling finanically,

but due to the size of the loan and the fact that the NW were essentially business debts

we didnt include these in the DMP.

( I am sure I will get my knuckles rapped for this one !)

 

These repayments were made from our business which is now a Ltd company.

All has been going well.

We have met all the repayments on the loan on time and have reduced our other debts considerably.

 

Towards the end of last year due to illness and bereavements within the family we fell into difficulties.

Our expenses increased massively (fuel etc) and we had to reduce our working hours.

All in all we couldn't pay the NW loan.

 

We contacted NW immediately explaining the situation and that we were doing everything we could to rectify this,

but we didnt make any payments for 5 months .

We now have arrears in the region of £2K.

 

They wouldnt stop interest at this time. The loan now stands at just under £30K.

 

we appear to have opened a can of worms.

We advised the bank in December ( I was in a bit of a tizzy) that we had approached a debt advisor

who had suggested that we make much smaller payments towards the loan due to our current income,

but we did not want to go down this route as we felt sure that things would improve.

I don't think I should have done this , but I was not thinking straight and was in a bit of a panic about the repayments,

I was hoping to get them to give us a bit more time to get back on our feet

but I think it has had the opposite affect.

 

NW then asked for an I&E which we provided based on our minimum income as requested by them.

 

In January after winning new contracts we advised them that we could begin to repay the loan in February

and we would try and also tackle the arrears but I didnt give them a firm repayment solution.

 

We made the monthly payment in February with a small additional amount of £50

( I appreciate they need much more) towards the arrears.

 

In the meantime despite receiving the I&E NW are now asking for firm proof that we can meet our repayments

and what arrangements we have with our other creditors.

 

I have not told them about the DMP .

Do you think that they are now aware of this ?

Would they have access to this information by checking or credit rating and see that arrangements are in place ?

 

we intend making all repayments towards NW,

and in the next couple of months if business continues to do well it will pay back the arrears.

 

I am so worried now though that as we have defaulted the NW will issue us with a CCJ / charging Order.

 

Despite us making payments again towards the loan they have said that they no longer wish to provide us

with banking facilities and are passing our account to the collections dept.

 

We have one month apparently to turn this around and provide firm proof of our proposals

to meet the arrears but they are giving no indication of the time scale in which

they want these repaid by or what proof it is they are actually requiring.

 

I have given them an I&E, I am unsure what else they want us to give them ? Or what they are allowed to ask for ?

 

They have asked us to meet face to face with a specialist man from their team,

but I think that the intention is for us to secure the loan against the house and add to the mortgage.

 

I am wondering if this might actually be a better route to go down if they suggest

rather than have a CCJ issued against us and a charging order put on our house.

 

I generally feel in a complete muddle.

I am unsure what to say to the bank as I know ultimately we were probably wrong

not to include the Loan in the original DMP back in 2011,

but the reason for this was the size of it and felt that we could get around it

by paying it from the business as they were ultimately business debts.

 

What options do we now have to get back on track whilst hopefully avoiding the CCJ route.

If we can borrow the arrears and pay them back might this stop any further collection activity ?

 

I am sorry if this is a bit muddled. I am not quite sure what I am asking really

I am so worried about saying the wrong thing to NW or doing the wrong thing

as I have heard that they are pretty tricky to deal with..

 

Ultimately I just want everything to go back to how it was.

It was all running smoothly, everyone was getting paid, creditors seemed happy

and our debts were significantly reducing.

Now I feel back at square one.

 

Oh and one other thing,

I have been trying to reclaim some bank charges on the basis of hardship

as I have reams and reams of letters etc to the bank about our financial affairs

in the lead up to them suggesting we take this £37K loan,

but they are refusing although have admitted to charging in the region of £6.5K in bank charges during this period.

 

Thankyou you in advance for any advise that you can give at this stage assuming the post above makes sense !

[BRIGADIER2JCS]

Hi Welcome to CAG.

 

 

I think if NW were minded to start court action they would have defaulted the account by now, although they have been known to delay defaults until they decide to off load the debt.

 

 

Borrowing further to pay off debts/arrears is never an advisable solution it just adds another commitment to be serviced.

 

 

As to bank charges these are difficult to recover, what reason did the bank give for rejecting the " hardship" claim?

[AndyOrch]

Have they issued any Default Notice or Intention to issue a Default Notice Faraway ?

 

Regards

 

Andy

[Faraway15]

Hello and thankyou so much for replying.

 

I really don't want to increase the mortgage, its last enough as it is.

 

The account is showing as a default on the credit score, but I have yet to receive a default notice from them.

 

The reason for rejecting the hardship claim was that they felt their charges were justified, whilst confirming how many thousands of pounds that they charged us. I have gone back to them twice and they just keep on sending a copy of their original letter.I will have to dig it out to see what the exact reasons they gave were but it was quite vague. I know these things are difficult. I think this one is a battle for a little later once I have got the loan issue sorted out.

[Faraway15]

They have send a letter, which was about 10 days ago now.

 

In the letter it stated the following -

I write with regard to the exchanges of communication we have had by letter and E-Mail over the last few weeks in relation to the borrowing that you have .

 

In view of the lack of financial information to hand and also due to the fact that you have not been able to evidence you can service both your borrowing’s and your other creditors, this office cannot oversee your borrowing any longer.

 

 

It would be in your best interests for your accounts to be referred to the Bank’s Recoveries Department. This is a specialist debt management department and they are better able to deal with customers who cannot evidence that they can service or clear their borrowings in the short term. That department is also able to accept reduced payments based on individual circumstances. Our office is not able to accept reduced payments indefinitely that maybe requested or consider stopping charges or freeze interest due on your borrowing.

 

As part of the process to refer your account to this department, under the Consumer Credit Act, it is necessary to issue notices. These will be sent to you in the next couple of days and gives you 30 days to find alternative Bankers and get another Bank Account opened.

 

Once the 30 days are up, further notices will have to be sent to you giving you a further 28 days to come back to me with your firm repayment proposals or evidence that you will be able to service the required payments. These are regulated letters and cannot be amended. They may seem harsh but as I say, we cannot change them. Once your account is referred to Recoveries Department, they will then write to you and you can then liaise with them direct to come to a mutually agreeable repayment plan.

 

The Bank can stop this process at any stage should you be able to evidence that you can service all your commitments.

 

I have received nothing from them since this letter.

[Faraway15]

The above is the most recent letter, but in each exchange the person we are dealing with

keeps asking for different things.

 

 

One minute he wants an I&E, the next he says he may be able to extend the end of the loan

to take into account the arrears.

 

It was once we said that we could begin to make payments again in February (which we did

that we then got the letter above.

 

we had made a payment and the very small amount of additional payment is when we got the letter above. .

 

My confusion is that he says

"we have not been able to evidence that we can service our borrowings and other creditors " that threw me.

 

We sent him the I&E he requested,

he asked for it to be based on our minimum income which we did.

That is all that he asked for.

 

I am not sure what other evidence he wants.

The letter states that they may accept reduced payments,

but we have offered and just stated making again full payments.

 

Surely they wont not accept them ?

 

In the last paragraph he wants our firm proposals or evidence that we can service the payments.

 

What should I be providing.

 

I have responded asking and he just tells me evidence !!

 

Sorry fo the million questions. Your help is ,mch appreciated.

[dx100uk]

id not only be looking at charges on the loan/bank

 

i'd also be looking at all the olddebts that were almalgamated into the loan?

 

if you've charges on them & lets say PPI or LIfe insurance

 

you've a healthy pots there to gather and reclaim.

 

dx

[BRIGADIER2JCS]

May be worth referring this to FOS?

The question re "servicing" commitments/ borrowings, should be I think be in regard to your totally business and other incomes set against the total outgoings business and personal only with this can anyone judge the viability of

servicing all the commitments.

 

 

I seems to me that the bank operative does not understand this.

[Faraway15]

I am thinking maybe I should start a separate thread re the bank charges.

 

They have hundreds of pages of documents detailing illness, operations,

using credit cards to prop up the business accounts etc etc ,

lack of income, how we weren't paying the mortgage etc etc.

All of this in writing.

 

I have reclaimed CC charges from NW,

I am sure there was PPI on a very loan from some time ago

I cant find the information on it and they say they no longer have any paperwork relating to this loan !

 

We had two fee paying accounts running at the same time

( one personal, and one in personal names but for the business

as it was a partnership then,

the bank advised us to open as such rather than having an

actual business account to save on charges, this was about 16 years ago)

 

They were taken out as advised by the bank and then upgraded to fee paying accounts,

in order to get a better rate on the loans and overdrafts

they were advising us to take out whilst we were getting into more and more trouble financially.

 

If I had known way back then what I know now we would have never have taken the advice.

 

Hindsight is a wonderful thing !

[AndyOrch]

So the account is now in the black hole in Telford with CSM...you don't require any visits to talk about your situation there is a fee and will add further to the debt.You dont have to add this to the mortgage (is your mortgage also with them?) as NW wont accept any voluntary secured debts without a CCJ in place first.

 

Don't start a seperate thread re the charges keep everything here in one place.

 

I will be back later with further information re Telford.

 

Regards

 

Andy

[Faraway15]

Thankyou Brigadier,

 

Do you mean referring the bank charges claim to the FOS ? I had thought of that but I was worried about doing so as although we can prove we have a DMP for all other commitments , those with NW are not included as mentioned above and again I was worried I would open yet more cans of worms so I was sitting tight until I could see which way this loan arrears was heading if that makes sense.

 

Do you think the bank are aware that we have arrangements in place with our other creditors, have they a way of seeing this information ?

 

I don't want them delving into our business, it is Ltd now we just pay ourselves what we can, I dont think they have a right to look at our business account do they ? The I&E I sent shows that we can service the commitments in my opinion although it wouldn't show alot left for paying back the arrears. But I sent him what he was asking, the minimum wage we would expect to pay ourselves. If we have a good few months we can increase this and then hopefully clear the arrears, we have confirmed to him that we have new contracts enabling us to do so, but I haven't actually specified how much per month we can pay and in what time scale .

 

 

 

 

 

 

 

 

 

 

I seems to me that the bank operative does not understand this.

May be worth referring this to FOS?

The question re "servicing" commitments/ borrowings, should be I think be in regard to your totally business and other incomes set against the total outgoings business and personal only with this can anyone judge the viability of

servicing all the commitments.

 

 

I seems to me that the bank operative does not understand this.

[Faraway15]

So the account is now in the black hole in Telford with CSM...you don't require any visits to talk about your situation there is a fee and will add further to the debt.You dont have to add this to the mortgage (is your mortgage also with them?) as NW wont accept any voluntary secured debts without a CCJ in place first.

 

Don't start a seperate thread re the charges keep everything here in one place.

 

Ok will do.

 

Who is CSM ? Is that NW Collections or a different entity altogether ? Their story was that the person was coming to see us to obtain a further understanding of our situation but we then noticed that he was from the mortgage dept. Our mortgage is not with NW. We have not agreed to meet with him at the house and can cancel the meeting entirely if this is what CAG advise. My initial understanding was that they may agree to re structure the loan ( ie extend the term, it currently has 7 years to run) to incorporate the arrears if they thought that we could afford it, but then on seeing that the person they have arranged us to meet was from mortgages alarm bells began ringing. I am really worried about what to say if the whole DM and arrangements with other creditors conversation crops up and if they know about it. Idont know what information NW are able to obtain on . They have already said that they dont want to be seen as a preferrential creditor. Do I deny the DMP ? Sorry again for the million questions and thankyou all for responding.

[AndyOrch]

Credit Services Management are RBS/NW internal debt collection.....once an account hits trouble its transferred to Birmingham once defaulted to Telford.

Have you recieved any correspondence from the above or is this still in branch?

[Faraway15]

No I have heard nothing since the letter above which was from the Risk Team in Herts.

[sequenci]

Hello there.

 

As regards the DMP, the general approach is to treat all the creditors in the same way - by offering pro-rata payments to all. Ideally, this loan should have been included within the DMP, or at least be offered a payment in line with the pro-rata share of the total amount you have spare to offer your creditors.

[Faraway15]

I have just checked our credit report and the Loan is showing as Late Payment, not in default. if this helps at all. Thankyou.

[AndyOrch]

Excellent well there may still be possibilities of getting the agreement back on track.(extending the term)You state its been recorded on your CRA files as defaulted(late payments) but you have not been served a Default Notice for the arrears.

 

Dont worry about your DMP or the fact that NW may or not be aware..maintain payments and the extra if you can afford this and let them provide possible solutions.(with no extra cost to you)

 

Regards

 

Andy

[Faraway15]

Yes I know thankyou sequenci. The worry at the time was the house and I was in such a state I thought they would take the house from us if we included it , the total debt at the time was just under £100K and I was panicking and ill with the worry of it all. As the loan was made up of business debts and we paid it from the business, we were hoping to tackle that one separately. I know it wasn't really the right way to go which is why I think I have now opened a can of worms. Rightly or wrongly until we hit this blip it has been working. We have cleared in the region of £56K of the debts in this time and this loan makes up a huge portion of the debt now.

 

Hello there.

 

As regards the DMP, the general approach is to treat all the creditors in the same way - by offering pro-rata payments to all. Ideally, this loan should have been included within the DMP, or at least be offered a payment in line with the pro-rata share of the total amount you have spare to offer your creditors.

[Faraway15]

The notice on the files literally says Late Payment no mention of default.

 

I intend making the usual payment in March again with as much extra as I can. I read the other day somewhere though that they can still apply for a Charging Order if they are worried about us being able to maintain payments in the future if they so wish whether we are paying or not. Is this correct ?

 

 

Excellent well there may still be possibilities of getting the agreement back on track.(extending the term)You state its been recorded on your CRA files as defaulted(late payments) but you have not been served a Default Notice for the arrears.

 

Dont worry about your DMP or the fact that NW may or not be aware..maintain payments and the extra if you can afford this and let them provide possible solutions.(with no extra cost to you)

 

Regards

 

Andy

[AndyOrch]

They can only apply for a charging order once they have attained a CCJ (Judgment)and only if arrears on the judgment payment can they try to make it final.

 

You are along way from that just yet:wink:

[Coughdrop]

Faraway, if I'm reading your post correctly you've a range of debts which will have damaged your credit record anyway. If you are able to make every effort to catch up as you are doing, how long will it be before you are up to date?

 

A Charging Order sounds terrible, but it's only terrible if you intend selling up and moving. If you intend staying where you are, then as long as you know you will catch up sooner rather than later, neither a CCJ nor a CO is that terrible. If you are able to delay things as long as possible while making payments, then a CCJ may never be granted. There is little point in the bank paying to secure the debt if they can see you are making every effort to repay the arrears. It would obviously be a different story if you were not making any effort.

 

There is always the possibility of trying to extend the loan, but if you're comfortable that you can make up any arrears, then it is in your interests to pay it off as soon as possible.

 

Equally, it is not the end of the world if it is passed for collection as long as they will stop interest and let you pay the arrears in a manageable way. These are not things to make yourself ill about again, the important thing is you catch up and keep paying.

 

Is your I&E totally up to date? If not, National Debtline have a very good one you can complete. I would be pushing very hard for the interest to be stopped as all they are doing is making it harder for you to repay the debt while you are experiencing financial hardship.

[Faraway15]

Thankyou for your reply coughdrop.

 

Yes you are right our credit rating is shot to pieces.

 

We don't really want to extend the loan, we would prefer to clear the arrears.

 

As of next month we should be able to make larger over payments towards the debt

but it difficult to confirm exactly how much as it depends when we get paid.

If we don't get paid on time then we cant pay the bank the arrears.

This is where we always have a problem.

 

Committing to dates and amounts as we have no guaranteed pay day ourselves

and the bank don't seem to be able to understand this.

An I&E is always difficult for the same reason.

 

The I&E I gave the bank was based on our earnings for the last few months

which were a little lower than usual and we used all the figures from our DMP ie groceries etc to complete it

 

The only thing I did do was to factor in a figure to show that we were making full monthly payments

towards the creditors we have left rather than the agreed reduced payments

we have reached with them as I didn't want to alert the bank to the DMP with the other creditors.

 

Again I have probably tied myself in knots.

 

The loan is due for payment tomorrow.

 

I intend paying it plus an additional £50 towards the arrears.

 

As of next month the plan is to increase this by a minimum of £200.

This should be possible.

 

Do you think we should make the payment, let the loan be passed to collections

and then ask them to freeze interest on the arrears while we pay it off ?

 

As for the CCJ and Charging Order.

We have no plans to move at the moment , but it could be a possibility in the future.

My fear is that its the only equity we have for the future .

 

Also prior to seeking monetary advice on the forums,

we met with our financial advisor back in 2010 and detailed the extent of our debt and discussed a DMP.

 

His solution was not to go down that route but to cash in our endowment policy to clear the debts,

and then a couple of months later he advised us to take on the loan we are now speaking about.

 

Stupidly we agreed this, cashed in the endowment, cleared arrears on the mortgage

and credit cards that we had at that time and the balance of one card.

 

We are now left with £105K of the mortgage on interest only with no way of paying it off at the moment,

 

Another reason for not wanting the charging order on the house

and needing to get these arrears cleared.

 

If only we knew then what we know now.

 

We have agreed the meeting with the bank at the end of March,

they have assured us there is no charge .

 

I just need to know how to approach them really .

 

I hope this is all making sense and thankyou again.

[Coughdrop]

How many years are left on your mortgage?

 

I think it would be wise to let the bank know you have a DMP in place, if this needs renegotiating to include everything, so be it. At least then you have all creditors in there, hopefully with interest frozen, and you are making pro rata payments to all your creditors. The very fact they are aware you have other financial issues should, in theory, cut you a bit of slack in terms of the pressure being applied to you.

 

I understand your concern over the CO and the CCJ, but once the arrears are paid, the CO would be removed and the CCJ settled, so they wouldn't be an issue. Once the CCJ is settled, I believe it remains relevant for 6 years which is the same period as the rest of your credit history, so it shouldn't be an issue.

 

Looking at the whole picture, which obvious one has to do, there remains a genuine concern over your mortgage as you should be looking to getting that onto a repayment mortgage. Have you explored this at all and the increase in payments it would mean? Would they give you a mortgage to swap over to? It is something you won't want to, but ought to explore.

 

My view is there's little difference with the account being with collections. You know your CRF is shot to pieces anyway, so another default is not going to make a vast difference to you TBH. The DMP could then be renegotiated with manageable and sustainable payments to get everything repaid asap, all debt included, interest frozen and all pro rata. In terms of your income you have to use an average over a realistic number of months. In the months where you earn more, you MUST set this money aside to compensate for the months when you have less (does that make sense?)

 

I find the best way for us to save is to open just a basic bank account with someone like NatWest, Barclays or the Co-operative (there are others, but these are the ones I know would accept and they're good). Put the extra money in there when you get it and always leave the card locked up in the house somewhere so you can't easily get at it. If you're like me, you have to 'force yourself'' to do it otherwise, with the best will in the world, it simply doesn't happen.

 

Hope this helps, but come back with questions etc....

[Faraway15]

Sorry for not replying sooner.

 

We have 15 years left on the mortgage.

 

I havent advised them of the DMP, the mortgage is up to date, although obviously no endowment in place as I mentioned before for the £105,000, the remainder is on an repayment. The mortgage provider is not the same as the loan provider. I have just called them and our monthly payments would increase by £420 if we included the endowment portion into the repayment. That is pretty much what we are paying for the repayments on the NW loan. They are £459 per month. It would bring our mortgage repayments up to £2450 per month which is a scary figure !

 

We are two years in on the DMP, so if we default on the loan then we would be set back for a further two years.

 

So trying to read between the lines coughdrop looking at the overall picture. Are you saying that in your opinion we should include the loan into the DMP, and do a new DMP which would mean new offers to our existing creditors who we have a DMP with. Could there be a problem here , as they werent aware of the Loan two years ago when we entered into agreements ? The money we are now paying to the loan should be infact used to pay the mortgage instead by converting the endowment portion to a repayment portion. If they default and apply for a CCJ, charging order then we take the hit ? This all sounds very scary.

 

We have a basic bank account already and only use cash. We havent touched a card in years !! We have various basic savings accounts as well set up in different names ie "college, repairs, school trips ", where we put money in for things that aren't paid monthly and for any additional expenses that we may incur as there is nothing build into our DMP budget for entertainment, household repairs, maintenance etc. The budgets are all going well and we are pretty disciplined !

 

The meeting with NW is next week. I am unsure which way to play this. Carry on paying and clear the arrears asap but obviously interest is still being added to the loan and we continue as we were until October last year when we hit this problem , or tell them we are on a DMP and get the loan included and deal with the consequences. I am really not sure.

 

Thankyou and sorry again for the million different questions and scenarios.

Edited March 14, 2014 by Faraway15
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