Advice from Ind. Financial Advisor. correct?

[Moradin]

Reading the advice about non-priority debts and what you should offer those creditors... it says,

 

You cannot split your surplus, between credit cards, and then pay a loan.. (basically)..

 

however, what do you do in the case of a joint loan?

[Wintry]

Hi

 

Are you talking about sole a DMP ?

 

What is the position regarding payments of the other jointly liable person in relation to the loan?

[Moradin]

I have 5 credit cards, and a joint loan with my wife. when contacting the credit card companies, what do i do about the shared loan.

 

Will they just split it, with what my wife has to pay, and what i have to pay, and i treat the 50% of what i owe, as a normal unsecured loan, just like the credit

cards? (when offering them an amount to pay each month)

[Moradin]

ok. have worked out a budget sheet, and it works out at negative £250 a month.

 

should i be offering a token £1 a month to each of the creditors, or nothing?

 

yes, my financial situation is now dire.

 

i need information on the joint loan i have with my wife. i cannot afford to pay for it, but she likely can. what happens with this.

[Moradin]

Ive just written to 5 credit card companies, saying that i couldn't afford to pay them.

 

I included a statement of incoming, outgoings.. which totalled a -£250 a month total

 

my question is, should i pay them £1 a month >?

 

(ive seen this written all over the place)..

[renegadeimp]

£1 a month is considered a token payment until they agree to a repayment plan. It shows willingness to repay the debt and that you have acknowledged it and arent avoiding it.

[firstship]

You only need pay what you can honestly afford as long as your income and expenditure shows clearly that £1 per creditor is the honest amount.Credit Card companies are low priority debts.

 

Probably you will get refusals from some of the companies,do not worry just continue to pay them the £1 they cannot refuse the payment

 

Wish you luck

 

FS

[Moradin]

The bit i dont understand with the posts above.. is that a credit card debt after 6 years is written off, so to speak.. but, only if you haven't made a payment? doesnt the £1 count as a payment ?

[renegadeimp]

No. It becomes statute barred if you havent made a payment or acknowledged the debt in writing. If you have referred to it as my debt or my account, then you reset the timer. Thats why we always advise for people to say "the above debt", or " the above account".

 

If you make a £1 payment, then you have acknowledged it and reset the timer.

[firstship]

If you think you are likely to get away for 6 years not paying 5 different credit card companies, without legal proceedings happening at some stage,then please think again.Remember you have written to these companies stating you cannot afford to pay,so you have acknowledged the debts.If your I&E confirms you can only pay £1 fine, just continue to pay this amount,all the time you are making regular payments,it is difficult for your creditors to take any action they are likely to win,in most cases.

 

This site is designed to help you with your debts not for the avoidance of them.There is a mountain of advise concerning your rights,and your creditors rights,and the rights of DCAs,

 

Regards FS

[Moradin]

If you look at my original post, you will see i stated that my surplus, is negative £250 a month. I now only have my salary to support myself, my mortgage, and my two children.

 

The confusing bit, is that i keep seeing this £1 a month thing. They can all take me to every court they like, i don't see where its coming from.

[renegadeimp]

Again £1 is a minimum token payment. It shows you acknowledge the debt and do want to pay it off. If they ever take you to court, even though youve shown the creditors a I&E summary, the judge would look down on them as its clear you are unable to repay and they ignored it. The judge then has multiple options at their disposal for dealing with the debt.

[Bombaymix]

Hey Moradin.

Just a quick question. What are the ages of these debts? Are they stat barred or close? 6 years or older (or 5 years in Scotland)

[renegadeimp]

SB is no matter now as the OP has already acknowledged the debts. The timer would have been reset.

[Bombaymix]

Not sure... If they are OVER 6 years, I believe the timer can't be reset. Whether acknowledged or not

[renegadeimp]

Oh i agree. I was under the impression they were less than 6 years though.

 

However, we need info from the OP to find out if he acknowledged the debts within the initial 6 year period. If he did, then SB doesnt come into play. If he only acknowledged after the 6 years were up, then he can stop payments, send the SB letter and laugh at them.

[firstship]

Moradin sorry missed the - sign,this puts a whole new perspective into place.

 

Questions,when did you last pay any money to the credit card companies? How old are the credit cards,any prior to 2007?Any with PPI?

 

The letters you sent to the 5 companies what exactly did you say?

 

Regards FS

[Moradin]

Yes. i have just stopped paying them. they are all fairly recent, some maybe 4-5 years since i've had them.

 

I just wrote to them all saying that as i only had my salary, mortgage etc, i could not afford to pay them. i included a summary of primary bills, gas elec, mortgage, one car loan.

then all the other debts. (5 credit cards).

 

None have PPI.

 

So, my statement just shows how i will somehow be negative £250 a month, and that severe financial hardship was coming my way.

 

I asked them to freeze the interest, and any penalities. and also to only communicate with me via post.

 

I didn't offer to pay anything in the letter.

Edited August 12, 2012 by Moradin
added stuff

[renegadeimp]

Have you checked to see if any of the debts have Penalty fees? Those are reclaimable too.

 

You did the right thing by stopping payments and also sending them a letter advising them of your situation. It's time now to relax a little, and wait for their replies to come in. Remember, if they refuse to acknowledge your circumstances, then send the letter from the CAG library. Failing that, its time to start formal complaints.

[Moradin]

Went to see an IFA today.. and recieved some information which, i think , conflicts with what i've read on here.. (might be me making the mistake).

 

He has said, that debts owed, are not wiped from your credit file, until 6 years, after satisfaction..

 

ie: they stay there.. and if you want a mortgage or something, they would still be considered, even after the 6 years.

 

My CC;s are on 4 years. and i will need to change my mortage in the short.mid term.

[dx100uk]

are they defaulted?

 

 

dx

[Moradin]

yes.. all defaulted 4 years ago

[dx100uk]

then they will vanish on the defaults 6th birthday

never to harm you further if you don't disclose them

[Moradin]

Is this an ICO rule.. ?

 

He seemed certain that it was a ''common misconception' that everything dissapears after 6 years....

 

https://www.nationaldebtline.org/EW/factsheets/Pages/25%20EW%20Time%20limits%20for%20recovering%20debts/Default.aspx?gclid=Cj0KEQjwoM63BRDK_bf4_MeV3ZEBEiQAuQWqkR13f1yo8LIQmCTmWbucE0mKWU-ljs15Q2ZCZY8tY1UaAlUl8P8HAQ#

 

What does ‘statute-barred’ mean?

 

See our fact sheet:

 

Credit reference agencies and credit reports.

 

 

If a debt is barred under statute, it means that by law (the Limitation Act), the lender has run out of time to use certain types of action to try and make you pay the debt.

Statute-barred does not mean the debt no longer exists. In some circumstances, the creditor, or a debt collection agency, can still try and recover money from you. You can choose to pay if you wish. Even if the debt is statute-barred, it may still be on your credit reference file. This may make it harder for you to get further credit.

[dx100uk]

its nothing to do with statute barring.....

 

if your debts are defaulted...

 

this is what the ICO says:

 

All references to a defaulted debt must be removed from your credit files after 6 years

has passed from date of default, whether paid off or not.

.

{the WHOLE ACCOUNT WILL VANISH, never to return}.

.

{however, this does not mean the debt itself is not still owed

consider a CCA request.}

.

This is so that someone who continues paying something

- even after 6 years from default

- should not be at a disadvantage to someone who pays nothing after default

and ends up with a clean file after 6 years.

.

NOTE: {the bracketed text is not ICO guideline but my advise]

...

 

and ofcourse if you don't show old copies

they wont show

you say nowt