Statutory Demand

[karen69]

Hi

You may recall I posted recently as I owed a child care establishment a substantial sum following previous difficulties. The debt was passed on to two collection agencies at the same time, one of which who went into liquidation. The debt was therefore passed back to the original agency who are once again pursuing me for payment.

I have sent a schedule of income and expenditure and have now received a letter telling me that I can not include Sky TV or broadband and that I need to cut back on my clothing/uniform/work wear budget and that they will not accept less than £50 per month - I was offering £20.

The outstanding debt is approx £3000 but they have added on interest and charges to bring the balance at just over £4000.

What they are telling me now is that they will issue a statutory demand in bankruptcy if I dont pay £50 each month and that my house will then be sold to pay the debt.

This is obviously quite alarming for me. Can anyone advise me whether they can actually do this?

Thanks

[Pliny the Penuriosus]

They can't force you to pay what you cannot afford nor can they demand that you either dispose of property or limit what does not appear to be an extravant life style. Their demands breach the OFT guidelines on debt recovery.

 

As for the statutory demand. They can apply for one but it will cost them a few hundered quid & you will have the opportunity to dispute their action.

 

No court will order you to pay what you can't afford nor will the court force the sale of your home particularly if you have kids.

 

Have they 'purchased' the debt or are they acting for the original creditor. If they have 'purchased' the debt then I should immeadietly dispute it by sending a CCA sec.77-79 letter (in templates)

 

I should now dispute this debt on the basis that you do not acknowledge any liability to them & as they have added charges I suspect they have purchased the debt & if not under what agreement are they adding charges

 

I would report them to both the OFT & Trading Standards because their threats come very close to demanding money with menaces &/or fraud in that they are claiming legal entitelment that they do not have to cause you a loss of property. (Property includes money).

 

Almost forgot watch out anyone can print an SD of the internet so unless it comes with a High Court seal/stamp then it's meaningless

 

It's an old trick to panic debtors into meeting unreasonable demands

 

Also you could make a Time Order Application (see section 129 of the Consumer Credit Act).

 

If I was the creditor I would consider a Statutory Demand to be a waste of time & money. An attempt to use a sledge hammer to crack a nut as they say.

[karen69]

Thanks!!!

I dont think they have purchased the debt, because they continually refer to "our clients", being the nursery. They have added on hundreds in interest and then the agencies charges. Obviously I dont have a credit agreement here as this debt was to a childcare provider.

I am willing to pay what I can afford, afterall, I used the service, but I am a little concerned by their methods in attempting to collect.

[sequenci]

i work within the debt advice industry and i can tell you that broadband and sky are fine to include so long as the payments are reasonable. this means usually you would have to get rid of sports/movies and only have a reasonable broadband connection rather than the super highspeed one.

 

clothing should be around the £15-£20 a month mark

 

to issue a stat demand costs the creditor very very little, the bankruptcy petition costs around £600. many creditors will send a stat demand just to scare people in to paying.

 

do you live in mortgaged or rented accomodation?

 

you can only use a cca request if the original debt was regulated by the consumer credit act. if it wasn't you could send a SAR instead, make sure you challenge any "unlaw" charges!

[Pliny the Penuriosus]

As the OP will have entered into a broadband contract they cannot cancel it without attracting penalties which would put them in a worse situation than they already are.

 

As for their clothing costs these would only be questioned in the event a bankrupcy order was made & they were examined

[Pliny the Penuriosus]

If they have added interest then the amount of the debt can be challenged. If they are not the owners of the debt they have no right to add anything other than court costs to the debt.

[karen69]

We are paying for the full Sky package, but we never go out, so we have to do something!!! Broadband is basic package, plus we are tied into this.

The clothing/uniform/work wear/misc budget is a little high, but I have two school age children so the budget has to take into account their needs, and you know how fast they grow!!!

The house is ours and mortgaged.

[Pliny the Penuriosus]

What was the payment duration of the loan? Whilst it still may even if a shorter period if it was 12 or over months then it is a CCA regulated agreement

[sequenci]

If they have added interest then the amount of the debt can be challenged. If they are not the owners of the debt they have no right to add anything other than court costs to the debt.

 

can they not add interest in accordance of the original terms of the agreement or stat interest under s69 of the county courts act?

[karen69]

There was no loan and there is no credit agreement. I simply got way way behind in paying the nursery costs because I was so much in debt at the time. They didnt remind me so I fooled myself into believing that I didnt owe them very much. It was only when they hit me with an outstanding bill which had run into thousands that I began to panic and realised I couldnt pay them back.

The debt has now increased because when it was passed to the debt collection agency, they added on interest as well as their charges.

[sequenci]

There was no loan and there is no credit agreement. I simply got way way behind in paying the nursery costs because I was so much in debt at the time. They didnt remind me so I fooled myself into believing that I didnt owe them very much. It was only when they hit me with an outstanding bill which had run into thousands that I began to panic and realised I couldnt pay them back.

The debt has now increased because when it was passed to the debt collection agency, they added on interest as well as their charges.

 

was there ever a contract for the nursery? can they proove you've had the service? what rate of interest have they added? you can argue the charges if there is no contractual provision for them.

 

if there is a law centre near you, it could be worth making an appointment for some free legal advice. take a look here:

 

The Law Centres Federation

[karen69]

I completed a registration form before my child started there, but that was more to do with details about her, next of kin, gp details, etc.

[Pliny the Penuriosus]

That means nothing. That's a registration form unless its an agreement to pay their fees plus interest in which case it would be a controlled agreement.

 

Were you paying in arrears or in advance. Did they agree credit terms. If so do they have a Consumer Credit Licence which they must have if offering credit.

 

Please note there has to be the offer of credit from the outset & not just that you didn't pay the account for some time

 

If there was no contractual liabilty to pay interest what on earth are these debt collectors adding interest for. Dispute this debt now

[tomtubby]

I would be writing to ask THEM to provide written details of the debt and also ask in your letter for proof that they can charge interest.

 

You need to challenge this now so that they are aware that if they do issue a stat demand that it is likely to be disputed.