Loss of employment, £50k plus in recent debt, help needed to plan the future

[Badtimes123]

Good morning CAG team,

 

Firstly, want to start by saying what a fantastic resource and collection of knowledgeable people you guys have created here. You guys helped me around 2008 to reclaim my bank charges and since then I have been on top of my finances.

 

I had debt issues as a youngster (now 40) due to lenders pretty much throwing money at people back then without any concern as to whether it could be repaid, I managed to get myself out of that debt by repaying it and have since maintained a fantastic (900+) credit score.

 

As much as having the great credit score is a good thing, it comes with it's own risks (ability to borrow ludicrous amounts of money) and I've fallen foul these last 24 months to a point where I am now desperately concerned about my situation, made worse by being served my notice in my current employment.

 

During 2018 I started to run up my debt as I borrowed to help friends and also my Mum having health issues that were not being cured but simply managed by the NHS, I forked out for multiple private sessions hoping to get her some relief, all with a view of repaying as I had always done, I've always paid my debts since leaving school. This borrowing continued into 2019 with house repairs, car issues and on and on, wife gaps in employment etc.

 

The debt has been affordable for me upto now as I've a reasonably well paid job, however that has now come to an end and I leave that employment in 3 months time. With only 3 paycheques remaining and no jobs that will match the salary available. I find myself in a very stressful situation of needing to plan ahead and I need your guys' assistance for this.

 

None of my accounts are in default nor had any missed payments on my credit file, all debts were taken after the start of 2018.

 

I have 3 loans:

Tesco Bank £8600 remaining

MBNA £4350 remaining

Halifax (my current bank account provider) £13,000 remaining

 

I have 5 credit cards with remaining balances:

Tesco Bank £8750

M&S Bank £9100

MBNA £11000

Virgin £4000

Halifax £2800

 

This is a ludicrous amount of debt and I'm disappointed I didn't see this earlier, as although it was affordable on the salary I have been earning, it is not affordable on a market rate salary for my trade and given recent organisational changes at work, I will no longer be gainfully employed.

 

I have seen some quotes for secured loans and additional mortgage with my current lender (a dual mortgage that runs in parallel over 25 years) to cover the debts, all of which are extremely expensive and leave me potentially vulnerable to losing our family home in the future if for any reason we are unable to pay, which given our mental health and children's age, is not an option we wish to pursue.

 

I need help on how best to approach these debts and welcome your advice. Part of me wants to default all of them due to the amounts however I'm not sure where this would lead long term, we live in our own home with a mortgage and equity in the home would just about clear these debts if we were forced to sell however that is a last resort for us.

 

I feel unclean and disappointed I am at this point given my age and wish for this to go away as quickly as possible while maintaining some dignity.

 

I appreciate I've typed alot and hope you guys are willing to discuss this with me as to my options on minimizing the impact I expect over the coming 12 months (due to loss of employment) and potentially to write off anything I can through defaulting/F&F offers etc.

 

Thanks in advance

 

 

[Badtimes123]

If I  had the spare cash, I might have bet dx wouldn't be long before replying thank you, straight to the point as always!

 

I've spent many hours reading on this site. Yours and others previous replies have absolutely answered what I need to do next, the content on here is like no other site. I guess for my own experience/therapy and to maybe help other's in the future like me; I would create my own thread and as we've both mentioned, the age and size of my debts differs from most other postings.

 

A few questions I haven't found answers to quite yet:

- as my debts are fairly new and alot of them over £10k, can I expect any special treatment in terms of them hunting me down or wanting to take it to court straight away?

-is there a possibility they could seek to force me to sell our home?

-given the amounts owed, whats actually the worst that can happen from here? I understand they aren't criminal but I'd like to know worse case in your guys' experience.

 

I was very weary of securing further debt against the house, I'm pleased I didn't and that the consensus is I shouldn't - I definitely won't!

 

I will go ahead and read up the section you mentioned and update this thread on how it goes should I not get employment. Thanks again

[Badtimes123]

Thank you London for your insight.

 

I guess most people when in this situation wish to pay nothing.. I certainly am near that point as its either 6 years of repaying debt, or 6 years bad credit. Of course the morally correct would be to repay and I've no one else to blame but myself.

 

Having read many stories across the web, I guess I'd like to enter into token payments, rebutting reviews where possible with a view to pay off once they start talking about F&F settlements, however I wasn't sure on the journey to get there given the amount owed and my equity in my home. Whether due to the amounts they would keep them open forever while paying token payments and hence even things like statue barring timer would never start.

 

The question is to taken payment and hope for settlement discussions in the years to come or not pay anything at all hoping they sell the debt where settlement is easier with DCA's...? thoughts on this please?

 

I guess they can never use FORCE and that gives me some sense of security and ultimately is all I care about - is my home safe, are my kids fed and happy, can we afford our priority bills and forget everything else.

 

Car is a banger

Have a bike worth £3k which will absolutely be sold soon

Friends - Yeh, I'm too generous I guess, I didn't specify a lending agreement but I know they will give me some return in the future when it looks better for them, they are aware of my situation and I will be asking for the return favors.

 

If I may ask London - you say you've been here before.. to the same amount of debt as me? how did your token payment journey go? did they eventually settle with you or did you get employed and repay in full? finally, anything you would do differently looking back that I can learn from?

 

Thanks

 

Parachute account created, awaiting details and will get my wages paid into there for the next 3 months.

[Badtimes123]

Agree, I am absolutely employable even if not in my trade of choice - thanks for the encouragement.

 

Interesting, appreciate you elaborating a little there.

 

Ultimately, as mentioned above, provided no one can and force a sale of my house, then I'm game for anything, paying it off preferred although defaulting and not paying another penny also sounds attractive naturally. Given how fraudulent the industry is I do not have a moral issue with not paying the debt and I can afford 6 years bad credit.

 

1 - Parachute account, DONE

2 - Update employer pay details, PENDING

3 - Cancel all DD for consumer debt, DONE

4 - Decide whether to token payment (perhaps worthwhile even if just initially), PENDING

5 - If yes to above, send Pro Rata payment letter from the library, update if/when circumstances change

6 - Get a good credit score again in the future but never borrow again like I have, ONGOING LIFE NOTE

 

I can't thank you enough guys and I will certainly donate to the site at my next opportunity

[Badtimes123]

Yep, you're right. Funny how it's the most simple things we miss when looking to our own advice - I would have told a friend to do exactly that! yet here I am, having to be told... Funny ol' world

 

Thanks again London, it's quite the list but I can certainly get through them all before the week is out, then at least I'm more informed. What's the worse they could say right? change is afoot either way (they don't need to know that yet though) but asking questions shouldn't show my hand.

[Badtimes123]

Thank you HB.

 

Apologies for the lack of updates.

 

I wanted to update the thread today with the latest progress and where I am at currently with all these accounts to hopefully help other people in the future.

 

Ok here goes:

 

I decided to allow all the accounts to go into a default state, with the exception of the debt owed to my current bank as I wanted to continue using it temporarily for mortgage payments etc before I could get my parachute account in order, I have now stopped payments to them too.

 

I have 3 loans:

Tesco Bank £8600 remaining - Default notice received 29/09 with a request to pay in full

MBNA £4350 remaining - Default notice received 28/09 and credit agreement ended, requested to pay in full

Halifax (my current bank account provider) £13,000 remaining - Only missed one payment as of sept due to my commented above reason.

 

I have 5 credit cards with remaining balances:

Tesco Bank £8750 - Default notice received 10/09, still offering repayment options after clearing arrears

M&S Bank £9100 - Default notice received 29/09, still offering repayment options after clearing arrears

MBNA £11000 - Letter threatening default notice and ending the credit agreement but they are still requesting payment of arrears as of today

Virgin £4000 - Still chasing arrears, nott default notice yet

Halifax £2800 - Only missed one payment as of sept due to my commented above reason.

 

So, there has been movement across all my accounts in the 'right' direction. My mortgage company would not give a holiday due it 'not being part of my product' - I actually found this quite disturbing.. they stated that all missed payments would be treated as such and there was no other options. Even if I submit to an income and expenditure with reduced payments, all would be treated as missed payments where a full month payment isn't covered!, disgraceful in my opinion but hey, who am I to moan.

 

For all those reading and wondering why I took it in this direction - I want to pay these debts, but I also would like to pay them in full at a reduced rate due to size of them, I know that sometimes OC's are quick(ish) to sell the debt onto a DCA where I feel I would be better placed for a reduced settlement. I knew I would get re-employed and if I could postpone the payments and save the money, I would then have the ability to actually pay some off 'in full' at a reduced rate where possible.

 

I guess a question I have for you gurus of CAG is, for the now defaulted accounts, is it time to suggest a token payment plan? I don't want to pay more than I have to, regardless of my current salary because I want them to realize the debt wont get cleared with  token payments and suggest a reduced settlement, is this sound logic? it seems that trying to clear these debts now they are defaulted would be a waste of time and money as either way, they should now drop off in 6 years, or go further with court in which case I deal with those on an individual basis.. any criticism or advice very much welcome.

 

On a positive note, I start new employment on Monday and as I say above, I will be saving as much as possible for the time when they might accept a reduced settlement. I will not be paying them anymore than minimum even though I could maybe afford it because the damage is done now.

 

Thanks in advance

 

[Badtimes123]

Thanks Andy, I was reading a thread earlier with your comments in regarding this very type of situation and amounts, saving the letters in seperate envelopes is something I should have done 6 months ago! naturally they've each sent me in excess of 10 letters each which sits in one folder - I will do this right now.

 

I did think that after default notice then the statue of limitations started and wouldn't be affected, so that must be only once the debt is assigned to another outside company? but with DCA's am I right in thinking the same applies? any acknowledgement or payment made towards resets the SOL 6 year counter?

 

I am very confident of being able to deal with DCA's for smaller amounts having assisted friends in the past with them and wish all my OC's to sell the debt sooner rather than later at which point I'd hope to settle for say 30% of the original amount.

 

My credit file is now trashed but yes I will keep a record of those dates.

[Badtimes123]

1 minute ago, Andyorch said:

Assignment has no bearing on the statue of Limitations....its from when the default notice is placed on your file.

 

Interesting.. things must have changed since I learned of the Statue of Limitation years and years ago, I guess it helps to stay abreast.

 

My current account with Halifax now has a maxxed (4k) Overdraft, they are applying daily interest which is now taking the account into unarranged OD territory - How best to deal with this? I won't be using that account again and will apply the same processes as with all other consumer credit however having never dealt with OD before I'm unsure what to do.. I guess they won't 'close' the account until the OD is cleared but that means accruing further debt until.... I don't know when.. should I make contact and make it clear I won't be paying them or will they eventually get the message and close/default my current account with OD?

 

I'm mortified to learn that one of my OC's (MBNA) is part of the banking group I set up my parachute account with.. I tried to pick one that wasn't but I must have missed it given the amount of OC's I have -  what impact will this have given I want to receive my salary into that account..

 

Thanks again for answering my questions, I don't think I have any more other than the few above, for now.

 

Cheers

[Badtimes123]

I'll try to keep this thread updated with default notices against accounts ON MY CREDIT FILE:

 

First one!

 

Tesco Bank loan - Default Date on credit file 21/09

 

Also, I didn't realize a credit score could be 0!! My credit score was 980 at the start of 2020, and since stopping payments this is the drop-off, as you can see, October is definitely the month of real movement:

 

707April

697May

621June

473July

445August

409September

0October

 

 

Edited October 6, 2021 by Badtimes123
stating its a credit file default notice

[Badtimes123]

Thanks for the material, is it sad that I just had to read it right away!?

 

Interesting, as my first thought when you mentioned the Status of Limitations 'start'' was "hmmm well delaying it would only benefit the creditor...." In my opinion the timer should start the moment the debtor receives a dated letter with the default notice.. it does raise questions as to whether the receipt of a default notice needs to be acknowledged... signed for etc.. but I guess this is the primary reason for keeping all paperwork to hand throughout the next say 10 years, as you never know when the creditor may jump out the woodwork and assign court papers.

 

Of that case in particular, the creditor waiting ALONG time to serve and I wonder if given the amount (~£26K) affected their decision on whether to sell the debt or not, I suspect it did given it's a large sum and they thought they would be successful.

 

Thanks again I enjoyed mulling that over

[Badtimes123]

It was my intention to use my parachute account for my salary moving forwards with my new employer, but given I now know they are part of the same banking group as one of my creditors, should I change this? would they be allowed to access this account say straight after payday and zero it to clear some of the debt? or would it just give them insight into my earnings etc?

 

Happy to find another bank however with a 0 credit rating as of this month, I'm unsure whether a bank would give me an account even with 0 OD

 

Can you advise please?

[Badtimes123]

Hey dx,

 

Yeh I can create an account with Co-op for sure if you think it's worth.

 

MBNA part of HSBC group... don't know how I missed it because I really tried to get it right!!.. I was swayed to them too as my missus also banks there and thought it would be easier

 

I have card and loan with them, loan is defaulted but not on credit file as such just yet, CC is still threatening letters stage

[Badtimes123]

You know.. at the time a parachute account was suggested to me, I was going to ask for your advice as to which bank I should choose but it also seemed like such a simple thing I can do myself. I know there are no stupid questions, but I wanted to do as much as I could myself given how much effort you guys expend on here helping people.

 

Bah! ok well I still have time to change my bank details before I get my first pay at the end of Oct.

 

You guys made me feel much better about my situation when I first posted and certainly every post I read from you lot gives me more and more confidence with how I'm dealing with this. Naturally, and as promised, with my first pay I will be donating, I just wish I could buy you all a beer.

 

 

[Badtimes123]

So Tesco Bank didn't hang around!!

 

Loan debt of £8367.52 passed to Wescot DCA, letter dated 05/10/21

 

Watch this space!

 

Any comments re experience with Wescot?

 

Given how quickly this happened does that mean the debt is 'sold' to them or simply they have been engaged to act on behalf of Tesco and Tesco remain the owning creditor at this time?

 

Thanks

 

[Badtimes123]

Thanks dx and good morning!

[Badtimes123]

Thanks for reopen BankFodder.

 

So an update (we knew this was going to be a long road..):

All debts are now in default state with threatening letters being sent on the regular.

 

I have one that has sent me a letter of claim, this is the MBNA debt of £4271.33.

 

The letter is from a solicitors on behalf of LC Asset 2 S.a.r.l

 

Any guidance on this please team?

[Badtimes123]

Hi Dx, thanks for reply.

 

Apologies, this is the MBNA loan that was sold on yes. I'm pretty certain every OC has followed the correct process with notifications however recently I've gotten a little lazy with sorting the letters.

 

I'll re-order and file them this weekend and pick out the MBNA one, then update the thread properly.

[Badtimes123]

To think it's almost a year ago when I started this journey reaching out for your help.

It's quite the lengthy update to follow, apologies for that.. as you can imagine all OC's have progressed the accounts in some way or another.

It was my understanding that at least until I saw the words 'court' or something similar I could pretty much ignore correspondence. Especially with the understanding of DCA's I have gained from this site and other research, I thought I wait for their moves. That said, I have taken my eye off the ball these last few months dealing with other challenges and perhaps there are things I should have been doing? instead of ignoring the DCA's (which I thought was correct)

To start, all have progressed to a DCA (I have all correspondence filed in order) - perhaps I need to confirm if they are acting on behalf of, or if they actually bought the debt??

 

Some offering reduced payments in full (which is where I want this to go ultimately) to the one that has progressed the furthest, to a letter titled 'Letter of Claim':

 

Kearns solicitors, instructed on behalf of LC Asset

Dated 21/02/22

 

Letter titled Letter  of Claim, requesting my response within 30 days completing an income and expenditure, and tickbox letter for me to tell them whether I dispute it or not (think I've seen Dx link the same form to someone in another thread..)

 

Any help appreciated. I will follow-up today with who is looking after each account now and act on mass where appropriate.

 

Thanks

 

 

This account was assigned to LC Asset on 22nd October 2021 (letter from MBNA)

 

Words in letter that confirm it's fully sold on? - "MBNA Limited has assigned all of it's rights, title and interest in respect of......"

 

1st Feb 22 - Letter from Link Financial, giving me 14 days or they will do the above and assign to Kearns.

 

Happy to list out each account (with dates of letters included, but appreciate it could be a long post.. so here's a summary for now.

 

Both tesco's accounts went to Wescots (offering reduced settlement), now they've both been moved to Moorcroft!

 

Moorcroft:

Tesco CC

Tesco Loan

Virgin CC

 

Wescots:

M&S CC

 

LC Asset:

MBNA CC

MBNA Loan

Halifax CC

 

 

 

 

Edited March 7, 2022 by Badtimes123

[Badtimes123]

Will do dx,

 

I'm happy to have gotten the letters in order again..

 

Notice of Assignment: Riiiight, I kind of expected this as the title of letters that may jump out at me, like the Letter of Claim does.

 

But as I elude to above, it's the wording in the letter body '...(Insert OC) has assigned all of it's rights, title and interest in respect of......'

 

Sorry I know that's probably 101 for you but this is a first for me trying to understand the process and I'm deep in letters and wording with this many accounts

[Badtimes123]

Understood. I have 3 to do then, all to LC Asset:

 

MBNA CC

MBNA Loan

Halifax CC

 

My credit score is now 0 and will not recover for circa 7 years, this will not change now these accounts are defaulted regardless of whether I pay or not, even if I pay in full today, in fact, paying anything towards them only prolongs the pain with respect to Statue Barring situations. So I'm incentivised to find another solution.

My intention remains the same as a year ago, default them to start the timer and where possible settle for less than the full amount. There's no benefit to a payment plan other than perhaps a token plan where the debt gets devalued due to time passing with an eventual F&F of factions the value...

 

Thoughts?

[Badtimes123]

Ok, will do.

 

So, what happens next then usually? let's say they reply with all the info requested.

[Badtimes123]

I've read a number but none are as new of a debt as mine/I haven't scoured deep enough yet.

 

Let me go make a brew and get to reading

 

Thanks dx

 

Wow, just finished reading

 

Read all of it what a success!

 

I guess the difference with mine could be they are so recent there is no way they don't have the paperwork.. or perhaps I'm giving them too much credit? lol

[Badtimes123]

So that was a first me using PO's also the lady at the counter didn't realise you could create a PO with no name, she was happy she'd learned something new after years doing the job, she had actually advised people previously that they must, it wasn't until I said I was pretty sure you can that she said "oooh, you know what I'll try to click next without entering one, see what happens" haha it was a fun experience. Anyway, enough waffle.

 

Just to confirm now I'm at another juncture with these debts, the advice is:

- Ignore all DCA comms while they are working on behalf of OC

- CCA request to debt purchasers upon receiving Notice of Assignment.

- Follow the PAP instructions should I receive a Letter of Claim.

Any paperwork received following CCA requests/PAP response, return here for upload review, then take action on each individually depending if it's enforceable.

 

^^that all correct please?

 

Just want to double check before I potentially go radio silent again while I action them, I will of course update the thread with anything relevant in between.

 

MBNA Loan assigned to Link, letter of claim received from Kearns: I've sent the CCA to Link and the PAP forms to the solicitor with reason for dispute to the solicitor as 'I do not acknowledge the debt, and the debt purchaser is yet to respond to my request for documentation' - I hope that's right? awaiting response on both of them. Both were sent at the counter and I have proof of posting.

Edited March 25, 2022 by Badtimes123

[Badtimes123]

Update:

 

Letter from solicitor received dated 25th March confirming receipt of my correspondence and stating they have 'requested the documentation' and it will be sent to me when they get it..

 

I haven't received any letter replies from the debt purchaser yet since my CCA request which was posted 22nd March.

[Badtimes123]

Morning CAG Team.

 

CCA request sent with proof of postage 22/03, the 12+2 requirement - is that 12 working days please?

 

Also, what are the next steps if I don't hear back within the 12+2 please?

 

Thanks