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mollywobbles

Initial advice on partner's unsecured debts

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I've recently found out that my partner of a year has unsecured debts amounting to around £8k.

 

He is, apparently, in the initial stages of negotiating a DMP with stepchange, based on his income alone. As we now live together and are expecting an (unplanned) child, I am concerned about the impact this will have on us as a couple. I have asked that he track down the paperwork in the hope / expectation that we would be better or equally able to manage this ourselves. He is quite adamant that a DMP is the best way to go. From my limited understanding, it seems like it would be hanging over our heads for a long time to come - the duration of the plan + 6 years from its completion.

 

I am new to all this, so any advice / informed opinions on the following questions would be very much appreciated:

 

1. Have I got that right, that a DMP will make life financially difficult for its duration AND for six years afterwards?

 

2. It is inevitable that we will need to move from our current home, which is a private rented tenancy in my name, within the year. We would be looking at a joint tenancy, similarly in the private rented sector. Which situation (DMP or self managed payments of all these creditors) would likely be looked on most favourably by landlords?

 

3. It is possible that within a few years, we would (otherwise) be in a position to apply for a mortgage, with some family help. Same question as above.

 

4. Given that these debts were accrued before we even knew each other, to what extent does our now being a 'household' impact on the payments creditors can demand? Would that be different with / without the step change DMP? For now, we are not named together on any official documents / bills or similar. This isn't something we've consciously avoided, we are only recently moved in together. I imagine this will become unavoidable once we have a child? Would I be well advised to avoid our becoming linked on paper, what's the legal / moral standpoint on that and what should I (not) be doing?

 

I don't even really know what questions I should be asking at this stage, so if there's something I haven't thought of, information on that would be appreciated too.

 

Thanks in advance to anyone who can help

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at what stage are the debts at atm, eg in default or all up to date with payments but soon to be unable to meet the payments


IMO

:-):rant:

 

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can I suggest you go and get his credit file

and look at WHAT SHOWS

what doesn't you can initially forget about for now.

 

I question the logic of entering into any DMP before each 'debt' is looked at

 

Fee paying or FREE

no DMP provider checks the legality of any supposed debt

so show him this thread

and tell him to WAIT and gather the info FIRST.

 

dx


please don't hit Quote...just type we know what we said earlier..

 

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From what I have gathered,

he was keeping up with the payments but realised a while ago that the interest rates were such that the balances were not going down.

His income also went down and this compounded things.

 

At this point, he contacted step change,

who took details of his earnings / outgoings and set up some kind of initial system of token payments to creditors.

 

This has been in place for a few months, and is set to be replaced by a formal DMP at the end of the year.

 

So, from the information I have right now,

I would assume not in default,

but this is why I have requested paperwork etc so I can get the full picture.

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I have requested paperwork etc so I can get the full picture.

presume you mean via cca request?

list out the debts, to who and their type


IMO

:-):rant:

 

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Formal DMP? Is he planning an IVA?

Sounds like it because., you mention about 6 years?

 

A DMP is any amount of time to clear debts. 1, 2, 3 years etc

List the debts in full... I think we could be some help.

 

Couple of pointers...

- Go Sign up for Noddle And Clearscore... Tell us what it says for each of the listed accounts.

- Tell us the history of each account... If PDL, then i can help to some extent. Telecoms - Same.

- Creditors cannot use your income as a leverage to pay debts. It can only be his unless you complete an I+E with your included... (I wouldnt do this)

- Creditors dont "Rush" to get stuff done so neither should you...

- Keep the token payments going for now


 

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Thanks to everyone who's replied.

 

When I referred to paperwork, I meant the account details etc / amounts paid / balances due / etc. which I have told my partner he needs to locate.

 

 

So far I have seen nothing.

None of it is in this house, as it hasn't been long that he's lived here.

If necessary, I will have him go down the route of requesting relevant details from creditors.

 

It seems like the first step is more concrete information. Good advice to check what is on credit report, I will suggest this.

 

IVAs have not been mentioned.

Sorry if I'm getting the terminology wrong..

. he told me there has (so far) been no formal arrangement of a DMP,

that stepchange suggested / implemented some kind of intermediary system whereby only very small payments are made for the time being.

Evidently, I also need to see some paperwork from stepchange.

 

The comment about the impacts being felt for 6 years after the end of the DMP was based on comments from people on stepchange's website indicating how hard they'd found it to obtain mortgages even after having paid everything on the DMP off, and how this impact of agreeing to the DMP was never made apparent to them before starting. I am happy to stand corrected on any of this though...

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Well the DMP wont show on CRAs... So thats not it but they refer to the dates from the defaults.

Any defaults will kill a Mortgage App dead, but there are exceptions. Defaults go off a CRA 6 years after placement.

 

Basically what Im trying to say is there is hope at the end of a dark road... Its hard in a relationship to talk about debts. At least hes spoken to you about it.

Get us all the names, amounts and creditors and if its with a DCA etc.

 

Best start is to check his CRA.


 

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Hi all, have followed your advice and obtained some further details.

 

3 credit cards:

 

Capital one

Date of default 09/05/16

Default balance £566

Current balance £562

 

Lloyds

Date of default 10/06/16

Default balance £1555

Current balance £1553

 

Barclaycard

Date of default 01/08/16

Default balance £590

Current balance £589

 

An unsecured loan:

 

Madison CF UK (118 Money) - taken out 22/07/2014

Opening balance: £2905

Date of default 31/03/16

Default balance £3630

Current balance £3625

 

An account with some kind of 'buy-now-pay-later' catalogue

 

Shop direct finance

This is showing as not in default - oddly,

this is showing as no account information in recent months (since Stepchange got involved) on noodle

Current balance £2493

 

There are also a couple of lesser amounts with mobile phone companies.

 

All the accounts were well managed with no defaults or late payments until my partner contacted Stepchange earlier this year with concerns about managing this on an ongoing basis.

 

 

They advised a token payment plan which has been running since then, with a view to DMP a year later.

He says they did not advise that entering into this would result in immediate, across the board defaults from all creditors but that is what has occurred.

 

 

Clearly he is at fault for not having researched the implications properly,

but he understandably feels quite hard done by that he was trying to take control of a situation -

which in fact, he was already in control of, in that he had not missed a payment

- and the current situation of five recent defaults stems directly from advice given by Stepchange.

 

We have written CCA requests, based on template letters on the site (thank you!) and will send these off ASAP and await response. What should the next steps be?

 

We have some savings, earmarked for a supplement to my income on maternity leave, which could be used to offer full and final settlements.

 

He could continue with the token payments, until April when the year is up, then figure out what to do then.

Proceed to DMP I suppose. I'm still not clear whether a DMP itself leaves markers on your credit file, or if that's just the defaults?

 

He could stop making payments and acknowledging debts and start waiting it out for 6 years.

 

Have I missed anything?

 

Is there anything to be done about those defaults?

I would be much more inclined to throw our savings at the problem if that meant we weren't going to be spending six years in the financial wilderness. If those are a done deal now, what benefit is there in paying anything at all?

 

Any advice welcomed.

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Hi Molly

 

Can i come back to you on this tomorrow, its been a long day and need time to think.

 

FKO


 

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each is defaulted so whatever you do

they will kill credit for 6yrs.

 

as he has a 'good record' with each till of recent.

I doubt there is any chance of anything to reclaim

 

as it appears each is still with the original creditor

I doubt the CCA requests will fail either.

 

best bet might be to write to each creditor

 

asking for a settlement figure or to write the debt off totally

 

but whatever you do esp F&F.

..you must get the defaults removed as a condition of the settlement

if you don't get that

then you might as well burn the money for all the good it will do you.

 

letters are here:

 

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


please don't hit Quote...just type we know what we said earlier..

 

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Thanks for reading, fkofilee, and yes of course!

 

Thanks also, dx100uk. If it looks like a settlement of some kind may be reached, I have some research to do on how exactly I ensure the conditional removal of defaults...

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not being funny but

 

if they wont remove the defaults upon settlement

then there is little point in doing it

 

doubt they will...but worth a punt.

 

I have over the years had great success with an ultimatum letter

 

something that says

 

I offer you £XXX to settle this debt with you once and for all.

this settlement will only be undertaken if you totally remove any negative data from all the relevant credit reference agencies

 

to be perfectly clear..this means the removal of the default place on XXX date

and the removal of any other negative data within the monthly calendar section on my file too.

 

if you are not in agreement with these conditions

then I can only offer a token payment of goodwill of [

such is my future financial outlook if the default remains on my file to cripple me for 6yrs.

or I shall be entering into bankruptcy or and IVA which will include this account.

 

either way you will get substantially less than my initial offer to settle detailed above.

 

other creditors have readily agreed to such a proposal.

 

etc etc.

 

 

lay the jam on thick..its a one shot chance that might work.


please don't hit Quote...just type we know what we said earlier..

 

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A few more questions have occurred to me...

 

Wrt settlements / removal of defaults. If a creditor updates your file to say the account has been settled, does that equate to the removal of any default or is this (as I suspect) a different (less often offered) thing?

 

Is there any way the (bad?) advice received by stepchange can be used to support the request for the removal of defaults, if mention of this was made along with f+f settlement negotiations?

 

Are five defaults as bad as one? What I mean is if we cannot get all creditors to remove the defaults, given that these all occurred within 2 months of each other, is it worth bothering with the others?

 

Also, given the circumstances outlined above, is it worth sending CCAs at all?

 

Finally, other than 6 years of grief from DCAs, what more can they actually do? I am not in the business of burning money...

 

Thank you so much for taking the time to share your knowledge, it's much appreciated

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If a creditor updates your file to say the account has been settled, does that equate to the removal of any default or is this (as I suspect) a different (less often offered) thing? Even if the account is shown as 'settled' the ''default'' will remain, defaults stay on credit files for six years, regardless whether they are paid or not. UNLESS the account has NOT been defaulted, then if it is paid, it will reflect that, and be marked as settled.

 

Is there any way the (bad?) advice received by stepchange can be used to support the request for the removal of defaults, if mention of this was made along with f+f settlement negotiations? IMO No.

 

Are five defaults as bad as one? What I mean is if we cannot get all creditors to remove the defaults, given that these all occurred within 2 months of each other, is it worth bothering with the others? One default is as bad as five yes, getting them removed is nigh on impossible UNLESS the information they are processing is incorrect.

 

Also, given the circumstances outlined above, is it worth sending CCAs at all? Depends on when these were taken out, and how, online, instore?

 

Finally, other than 6 years of grief from DCAs, what more can they actually do? Less for committing the criminal offence of harassment and sending out puerile empty threat letters, NOTHING, they are NOT bailiffs and have NO legal powers whatsoever, but IF they OWN the debt, then they only thing you shouldn't ignore is a claim form. I am not in the business of burning money...

 

Thank you so much for taking the time to share your knowledge, it's much appreciated

 

 

When were these accounts taken out? Pre or post 07?


Who ever heard of someone getting a job at the Jobcentre? The unemployed are sent there as penance for their sins, not to help them find work!

 

 

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A few more questions have occurred to me...

 

Wrt settlements / removal of defaults. If a creditor updates your file to say the account has been settled, does that equate to the removal of any default or is this (as I suspect) a different (less often offered) thing? settled still leaves the default - a default is there for 6yrs paid or not, settled or not if the default remains it kills credit

Is there any way the (bad?) advice received by stepchange can be used to support the request for the removal of defaults, if mention of this was made along with f+f settlement negotiations? - wasn't bad advice, just didn't inform you what would happen...

Are five defaults as bad as one?

What I mean is if we cannot get all creditors to remove the defaults,

given that these all occurred within 2 months of each other,

is it worth bothering with the others? - nope one default kills you..

Also, given the circumstances outlined above, is it worth sending CCAs at all? - IMHO no esp if the account were taken out post apr 2007.

Finally, other than 6 years of grief from DCAs,

what more can they actually do?

I am not in the business of burning money... - well a dca is not a bailiff and can be totally ignore

trouble is..the Original creditor rarely goes for a CCJ, but if they [the OC] sells the debt on

9/10 a DCA well might..a CCJ will kill credit even worse than a default does..

Thank you so much for taking the time to share your knowledge, it's much appreciated

 

 

dx


please don't hit Quote...just type we know what we said earlier..

 

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Thanks again for further responses...

 

It's not looking so good, is it?

 

I've read on another site that in the event that copies of the default notice cannot be supplied, this could lead to their removal. I don't think these were ever received, but presumably because correspondence was going to Stepchange. How would you view the strategy outlined on that link? Would it be worth pursuing in our case?

 

There is a further 'strategy' outlined on the same site , based on appealing to sympathy in the case of small defaults: Any thoughts on / experience of this? Some of these defaults are in the region of £500.

 

 

Has anyone had any success with negotiating a removal of a default (rather than a settled status) as part of a f&f? Or any threads I could read?

 

Any estimates on the likelihood of a DCA pursuing a CCJ in the event that these were sold on for the debts listed above?

 

Massive thanks to all posters, have a good day everyone.

 

And to answer the question, these debts were taken out post 2007.

Edited by dx100uk
external links removed - dx

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I can't see any companies removing defaults and particulary if anyone publicised any such unlikely decision online. They normally say that they have a duty to report factual handling of credit to CRA's, so that other creditors understand how a person has behaved previously. Companies in the credit industry will have signed up to various bodies where they have accepted a set of rules, about how they conduct their business. I can't see removing defaults from credit records as part of settlement deals being an accepted practice.

 

What you might be able to achieve with reduced full and final settlement offers, is to have credit records marked satisfied, rather than partially satisfied. You can ask for this, but from what i have read most want to note as partially satisfied to reflect that a debt has not been pain full. Of course partial settlement is a big red flag on your record until the 6 years is up and the default drops off.


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Hi Molly

 

Sorry it took a while to come back to you but DX and co have offered some fantastic advice.

They are right the defaults will remain from 6 years of the date of default.

 

You can try the F+F and removal route, I have found that some companies are actually quite sympathetic to that.

There is no issue continuing on with your £1 PM to each creditor etc if thats all you can genuinely afford.

 

Can i also add that your OH need not stress out, just because hes defaulted on a lot of stuff, he shouldnt feel bad. Sometimes life takes hold an you lose control... IE Losing Job etc.

Dont let this stress you out either. Did you say you were pregnant? If so, take this easy.

 

Are these all with the Original Creditor at this point?

Mortgage applications will be a no go in the current setup of defaults.

 

Also as for the question about DCAs / CCJs, lets put it this way. It depends who you get. Say for example Lowell, OR Cabot or Link purchase said debt then they may go for a CCJ.

But smaller Dcas, like Wescot, Motormile Finance etc , They wont. If you do get a letter form a DCA then please le-t us know. Read the wording carefully.

 

They will either have bought the debt outright or will be just administering while it remains with the OC.


 

We could do with some help from you.

 

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had to remove those links MW

that site and its 3 letter whip are very old and no longer relevant info.

 

 

dx


please don't hit Quote...just type we know what we said earlier..

 

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Thanks, dx, guess that answers my question about that as a possibility.

 

To answer the questions, all these are post apr 2007 and remain with original creditors for now.

 

And thanks to all for the advice, things are starting to look a little clearer now.

 

At the moment, it seems like f+f offers conditional on notices of full settlement would be the best way to go.

Is it worth starting by asking for removal of defaults (although I fully understand & appreciate what the answer is likely to be, as outlined above)?

 

 

It seems at the moment probably not,

given the unlikeliness of success,

their sheer number and the fact that one is as bad as a whole bunch.

 

 

I should probably just accept that things are going to be tough in the credit department for a while,

because that aside, it's not the end of the world.

 

In the event that those offers are rejected, the £1 payments will continue ad infinatum.

 

 

Our finances are set to be stretched ever further with the arrival of a first baby in 8 weeks,

and any creditor would be a fool to not see the sense in accepting a sensible offer made.

Would the £1s be enough to keep the debt with the original creditor?

 

I suppose before making those offers,

we have to decide what price we are willing to pay for 6 years of peaceful living,

in the knowledge that in paying everyone off,

it's only the demands for payment that will go away,

not the negative impacts of the defaults themselves.

 

Have I missed anything?

 

Thanks again all round...

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No you haven't really missed anything, Im just glad you came to the right place for advice.

No payments made to the OC will not affect their decision to bulk sell the debt to a DCA looking to make a buck.

 

If DCAs start hounding you then, dont worry, they are idle threats.


 

We could do with some help from you.

 

Have we helped you ...?         Please Donate button to the Consumer Action Group

 

**Fko-Filee**

Receptaculum Ignis

 

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