Parents DMP

[James31]

Hi,

 

Just found out that my parents are in a lot of credit card debt

- more than I thought.

 

High tens of thousands.

 

It's at the point where my Dad is drawing cash from the cards to pay the mortgage

and the cards, whilst his income goes on food and bills.

 

I want to help them onto a DMP in the first instance via StepChange and then look at CCA'ing the accounts afterwards.

I have some questions that I can't find the answers to conclusively:

 

1. DMP followed by CCA requests - is that the best order? I think so. All accounts were opened late 90's/early 00's.

 

2. Some of their cards are jointly owned, some are not.

Would StepChange need a call from each, resulting in two payments and two DMP's,

or do they bundle them into a single DMP with a single payment?

 

Thanks

[Bazooka Boo]

A free DMP is a good idea, if you feel you won't be able to do the work with/for them?

 

Are these all CC debts?

 

CCA requests would be a very good start yes, how much of the total debt is made up of reclaimable charges/fees?

 

Any PPI that can be reclaimed?

 

Have a look in the library (green link top of page) and fire off a letter requesting to stop interest charges and fees.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?387436-Letter-for-consideration-regarding-Hardship-or-Financial-Difficulty

[James31]

Thanks for your reply.

I'm working on the theory that StepChange's involvement will get the lenders more likely to agree to accepting lower payments

and freezing interest than if they write to the lenders direct.

If that's not the case and it's equal either way,

I'll do it for them...

 

Yes, they are all CC debts and as of today, none of them are behind at all

- they are up to date with no missed payments (but only because they still have 12k available credit

which which they are eating into month by month to cover the others).

There is no PPI and have been no late charges.

 

I'll look at that letter template, thanks.

It would be kind of nice to avoid StepChange because they might downsize soon.

I wasn't sure how that would go down with StepChange as it's likely to release some equity that they'd really like to retain for a rainy day

- it wouldn't be much, but I don't have any experience of how much they would quiz them upon an address change.

 

BTW

- I went though this myself previously, in 2007.

 

I'm debt free now through a combination of settlements, arrangements and CCA success.

 

So, just getting reading into it again and seeing what's changed over the past 3 years or so.

[Bazooka Boo]

Then you know what is priority and what isn't, CC's are NOT a priority debt, the mortgage most definitely is!

 

If there is a 12k surplus on one of the cards it would be extremely beneficial to drop the limit right down to just above what is owed.

 

Then get those letters off asking for them to consider lower payments and stop interest due to financial hardship.

Keeping them informed is the best bet, by all means try stepchange, but in all honesty there is nothing you couldn't do with the help of CAG and your own knowledge.

[James31]

Thanks again.

Their original plan was to downsize with a mortgage and clear the cards,

but they've not been able to get a mortgage to do that.

 

Current mortgage is large.

Downsizing would leave them without a mortgage and they will own the new house outright.

 

To do this, they are moving north, from the south and leaving the rest of the family behind.

 

Just to complicate matters, they'd need to rent in-between so that they don't need to travel up and down for viewings.

That means having a lump sum from the sale hanging around in their accounts for 3 months or so

and also means they can't start a DMP just yet else their ability to rent could be jeopardised with the credit checks.

 

However, even having done this, they still wouldn't be able to afford the CC minimum payments.

It's way out of control and in a panic to not miss any payments

they've withdrawn so much CC cash at the ATM to service it all, it's unreal.

Wish they'd said something sooner really.

 

So what I need to be sure on at the start is whether creditors are more likely to accept the reduced payments if approached via StepChange, versus going it alone.

I'd read that this was the case but wasn't sure. Sounds like maybe this isn't strictly the case.

 

That first template looks like a good starting point, prior to anything else, so thanks.

[fletch70]

I am sure you are aware that stepchange will not send CCA requests out so I would do the two in tandem. Get those CCA requests out .

Again if I am honest and you have the time and energy to do it, get your parents to sign letters of authority and send that along with an I&E , a request to freeze interest and charges and a pro rata payment offer. If debts come back UE then you can decide what to do. NDL as well as the cag library have all the letters you need

 

Just be aware , as I am sure you are, that your parents credit rating will be trashed for the next 6 years minimum depending on how quickly the defaults are placed.

If you are doing an i&E I can not stress strongly enough that you are aware of what creditors class as acceptable and do not leave things too tight.

[James31]

Brilliant, thanks - makes sense.

[fletch70]

James,

It is possible that the creditors may try to say that they will only deal with stepchange but there is plenty of guideance to say that is not the case. Cross that bridge as and when you come to it

 

 

http://fshandbook.info/FS/html/FCA/CONC/7/3

[James31]

Just updating the thread with progress...

 

I prepared letters for all of the lenders, offering a lower pro-rata monthly payment and a budget sheet for each. Some debts were purely in my mums name, some were in my dads, some were joint. Where they were joint I included the budget sheet for both.

 

Here's hoping that the offers are accepted!

 

My Dad had become so obsessed with the silly score given to him on CreditExpert that he still believes he has a good credit rating, despite being in mountains of debt. Took a lot of explaining... At least they aren't going to be able to take out any more credit from this point on.

[Bazooka Boo]

Pah credit scoring! Another Americanism I despise along with ruddy 'Prom nights'???? What happened to 'school disco'?

 

Anyhow, so far so good, although you are not at all obliged to send them such personal private info such as I&E forms, having done so, shows that

you are willing to be amicable about this, and trust they will reciprocate, only tie will tell, but don't be at all surprised when one or two completely disregard

their circumstances and threaten all and sundry, let them bleat on,they then get moved to the bottom of the pile and get the scraps left over after paying the others.

[James31]

Well, so far they have had 5 out of 14 acceptance letters for the reduced payments, which is good.

 

A couple (RBS and Santander) have asked for info on the balances for the other creditors. It's all been carved up fairly so I'm guess that they'd just like to see that the payment for them is fair. Just wanted to get it down on here in case anyone has another take on their reasoning...

[Bazooka Boo]

No your correct, if these are pro rata offers of payment, then they will just be checking to see what everyone else is getting, not a bad thing to play ball with them at the minute.

[James31]

Just updating the thread. 11 have agreed reduced payments which is great and far better than I'd anticipated, which has been a fantastic help. Most have lodged a default, which is also good.

 

3 are outstanding- Smile, Tesco and Sainsbury's. Smile have refused the offer and so far are the only ones to do so, so I'm going to try again and send more info. Tesco and Sains are yet to acknowledge any of the letters, so I'll send the next ones signed for.

[Bazooka Boo]

There is a letter template on here if they are lacking in action.

 

http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?405-Debt-Collection

[James31]

Thanks Bazooka!

[James31]

Update. Well, all of the creditors agreed reduced payments except for Smile. Tesco ignored all of my letters and passed the debt to Wescott. I CCA'd Wescott, which resulted in the debt being passed back to Tesco and the reduced payment accepted. The latest is that MBNA have sold the debt for that card to Link Financial so I have CCA'd them. Previously, they'd accepted a reduced payment plan but have since got bored I suspect. Odd, MBNA didn't even ask for the balance themselves before they sold it.

 

I fully expect all of these accounts to go the same way in the end but so long as it's on a one-by-one basis I can keep up!

 

Smile were CCA'd in December and haven't responded, so payments to them have been stopped.

 

All but two of their accounts were opened pre-2007.

[citizenB]

Did they all cease adding interest and charges, James ?

[James31]

With the exception of Smile, yes. I have to say, they were all very good about it. My parents find it all very worrying, so as long as the creditors are willing to accept the reduced payments, then they will keep paying. If they sell to DC's or stop taking reduced payments, then I will CCA each one in turn.

[citizenB]

Where were Smile in the grand scheme of things..in terms of how much they were owed against the others ?

[James31]

They were 2nd largest actually - 12k. I wrote to them 4 times over the course of 4 months before they refused the lower payments. CCA in Dec, nothing heard from them since.

[citizenB]

They were 2nd largest actually - 12k. I wrote to them 4 times over the course of 4 months before they refused the lower payments. CCA in Dec, nothing heard from them since.

 

From what I understand Smile are not usually very helpful - however, it is normally one of the smaller debts that kick up a stink.

[James31]

Ah goodie... Robbing**** Way are involved with one of the accounts now. CCA'd them. Interestingly (or perhaps not), they sent two letters in the same envelope, one of which is branded up as them and the other has some fabricated letter header and footer representing the original creditor. My Dad assumed it was from the creditor, but it isn't. It explains that the debt has been sold (to Hoist).

 

That's not cricket is it. I guess it doesn't matter much, but to the layman it gives the impression that the letter is from someone other than RW. Not sure what I can read into that, but let's see if they can produce the agreement.

 

As an extra bit of news, the Link Financial CCA request resulted in them replying to say that they have to ask the original creditor (MBNA) for the agreement, so something else to look forward to.

[citizenB]

Indeed it is not good practice, James.

 

Sadly I don't think it is something that gets much attention from the Ombudsman