Dealing with DCA / Repairing credit history

[NearlyDebtFree]

Hi all -

 

I joined the forum today and would just like to say how grateful I am both for this resource and for all the wonderful assistance provided by everyone here.

 

I currently owe about £5k as a result of 2-3 unpaid overdrafts that I accumulated about a year ago. Unfortunately I took a "bury my head in the sand" approach to the problem at the time and the debt has been sold to various debt collection agencies since then who would now like me to pay back the full balance including accumulated interest.

 

I have enough in savings to pay back the full amount owed, and I was wondering if I could get some advice on the best way to do this?

 

Should I just call all the different DCAs up and pay the balance owed over the phone, or as suggested here in writing? If so are there any template letters I might be able to use? Do I have to pay the accumulated interest on the balance to the debt collection agencies, as i've done some reading and apparently this can be written off?

 

There are currently some defaults on my credit report as a result of the debts - is it possible to get these removed to improve my credit score? What is the best way to do this?

 

Thanks in advance for all your help,

Edited September 19, 2009 by NearlyDebtFree

[IdaInFife]

hiya andwelcome to cag,

 

if you feel the balances have inflated since being passed to the DCA's i would question this first.

 

can you give a breakdown of the original creditoe, what they were for loanor cc etc rough balance and what dca is collecting on them?

 

also if the are all for overdrafts then are there charges that can be claimed to reduce the balance?

 

ida x

[NearlyDebtFree]

I took out three student overdrafts during university and the money I owe is to repay these.

 

The breakdown is as follows:

 

Halifax -

 

£1k owed, debt still with original bank and so far no interest has been charged. This I should be able to repay immediately back to the bank.

 

HSBC -

 

£750 owed, debt now with DCA. According to the last court action letter received from them balance owed remains unchanged (no interest charge).

 

Co-operative Bank -

 

£3k owed, debt now with DCA. About £100 in interest payments has been charged by the DCA (Robinson and Way) on top of the original figure shown.

 

 

All the student overdrafts were interest free when I took them out and so i'm pretty sure there's no additional bank charges on the amounts owed.

 

Thanks again!

[IdaInFife]

ok then ,

 

the two with dca's may accept a lower full and final settlement but there is no harm in trying all three.

 

have you been making regular paments to all three?

 

idax

[NearlyDebtFree]

The last payment I made was a one off payment of £20 about 11 months ago, but I haven't paid anything since then.

 

I have still been getting regular phone calls / letters from the DCA up till now but chose to ignore them, which admittedly wasn't the best thing to do.

 

I would like to get all three debts cleared and removed from my credit record as I would like to eventually apply for a mortgage and know the defaults / arrears will lower my credit score considerably.

 

Should I call the DCAs up and ask for a lower full and final settlement?

[IdaInFife]

never ever ever call a DCA.

 

If i was you i might just play along with their game.

 

I would send them a full and final in writing at a low start (anything you wat but start about 15%) and then they will in return send what they would accept.

 

Account Number:

Dear Eejits,

I am willing to offer the sum of £xx as an ex-gratia payment in full and final settlement of the account.

This offer is made on the clear understanding that neither you nor any associate company will take any further action to attempt to enforce or pursue this debt in any way whatsoever and that any and all liability on our behalf will be fully discharged on receipt of the above stated monies.

This offer is made on the condition that of all adverse entries regarding this account are removed from our credit files with the credit reference agencies.

Payment can be made within 2 weeks of receiving your written confirmation of your agreement of this offer and the subsequent terms of the offer. Please also identify your prefered method of payment and the details of making said payment.

Please note this offer will expire on (date - give them a couple of weeks) if no letter of unconditional acceptance is forthcoming and may not be repeated.

We look forward to receiving your reply.

[NearlyDebtFree]

That sounds great - thank you!

 

I'll send out the letters this week via recorded delivery and post an update as soon as I hear back from them.

[IdaInFife]

okies (fingers crossed)

 

ida x