Mr A asks:
I have had an arrangement with a debt collector for a number of years, paying £10 a month.
They have sent a letter asking for a review.
Do I have to do this? Can they do anything if I just continue with my current payments?
Contents
You don’t have to give these numbers but…
It is a good idea to give revised details
Everyone was happy when the arrangement was set up.
Mr A was relieved this debt was “sorted” in a way he could afford.
The creditor was getting some money and knew Mr A was paying a fair amount.
A few years later, Mr A is still happy, he doesn’t mind carrying on paying this. But now the creditor is wondering if Mr A can pay more.
This may feel unfair – you have kept your side of the bargain, why does the debt collector want to change it?
But this sort of arrangement is not a formal long-term contract. It is just a temporary agreement with the creditor to accept less than the original contract said because you were in financial difficulty.
You don’t have to send them a new Income & Expenditure (I&E) form. They can’t make you!
But if you don’t, they may think you do have more money … in which case they may decide to start adding interest again (that is most likely with the original lender) or take you to court for a CCJ (that is most likely with a debt collector).
So it’s better to give them your revised income and expenditure details.
Make sure your numbers are up to date
It’s worth thinking about what your expenses actually are – it’s easy to miss off things if you don’t budget in detail. And inflation has been pushing up a lot of expenses.
So make sure you have the new energy bills, council tax, mobile bills etc. And probably a much larger amount for food than when you first set up the agreement.
Using an online tool such as National Debtline’s My Budget can help you to get a full list. You can also download the Inome & Expenses from there to show your creditor if you want or just use the numbers to complete the debt collector’s form.
Do you have arrears of important bills? Or may you have soon?
If your situation is bad, this is your chance to ask for your payments to be reduced, not increased.
In particular you should highlight to the creditor if you have arrears on any priority debts such as rent, council tax or energy bills. Or if you know there are big problems ahead eg when you mortgage fix ends later in the year.
Here you should ask for your current payments to be reduced so you can clear the arrears. This could be down to a token £1 a month payment.
I am in a DMP – do I still have to do this?
Some people prefer to use a DMP firm as it means making only one payment per month and not having to deal with their creditors directly. A debt management plan run by a DMP firm is essentially a series of debt arrangements made with creditors.
In a DMP a creditor won’t usually ask you to send them a new I&E.
But if one does, just send the letter to your DMP firm – it’s their job to deal with it!
Your DMP firm will do an annual review with you. This will include doing an updated I&E. This will look at whether your payments should increase or decrease. And at whether there are now nay better debt options for you. If you are finding the DMP payment hard to manage, you can ask for a review in mid year.
What are your other options?
Getting a letter from a debt collector asking for a payment review is a good time to think about your other options.
You may be very happy paying that £10 a month, but it isn’t clearing the debt very fast…
Four things to think about:
- could you make a settlement offer? A debt collector may be happy to take an offer and it would sort this debt out. A debt that has dropped off your credit record will not reappear if you settle it. And if it is defaulted, it will still drop off your record after 6 years from the default date.
- can the debt collector produce the right paperwork? If the debt is a loan, credit card, catalogue or Hire Purchase, read How to ask for the CCA agreement.
- could you win an affordability complaint? This would be against the original lender, not the debt collector, but if you win then the lender will sort out the debt with the debt collector.
- do you have a better debt option? Talk to National Debtline on 0808 808 4000.
No credit checks for new mortgage fixes?
Paying a debt not on your credit record
Could a Debt Relief Order help you?
Jane Clack says
A useful and interesting article – clearly and simply explained.
Graeme Curtis says
hello
I have a debt from negative equity from around £11k in 1999 (nearly 18 years!) and have been paying £20 a month ever since. I still owe around £8K.
Recently i have been contacted by new debt collectors asking for income & expenditure (haven’t heard from the previous debt collectors in years or had an statements from them). They also have sort of asked for copy bank statements and payslips etc. Do I legally have to send them these?
I am going to offer them £2K which will come from a relative…how likely are they to accept this as f&f settlement?
any advice or experience would be welcome.
Sara (Debt Camel) says
Legally you don’t have to send an I&E statement or bank statements, as the article above says. But the chance of the debt collector accepting a low F&F settlement if you don’t is very small. It is a shame you didn’t go bankrupt 11 years ago :(
Howard Fleetwood says
Hi there
Do l need to fill out an income expenditure form when asking for a settlement figure to a creditor.
I am getting the money to settle from my girlfriend.ls filling one out lawfully neccessary.
Thanks
H
Sara (Debt Camel) says
You don’t have to, but the creditor may be more likely to accept your offer if you do.
david smith says
i was told i have to fill out a i&e form as its is a legal requirement and send in bank statements and wage slips off which i don’t have is this true . also they said they can’t do i &e over phone but my sister who works in debt collection said they can . is that also true
Sara (Debt Camel) says
As the article above says, you don’t legally have to to this. But if you refuse, they pay go to court for a CCJ.
It’s really not worth arguing over whether you can do the I&E on the phone. It’s often better to do it on paper as you have more time to think about it. If you aren’t sure what you should put down, talk to National Debtline on 0808 808 4000 about this.
Christine Morris says
I have a few debts, have managed over the years to pay some off. I am now retired and disabled. I am paying £10 month on a mortgage debt , have been paying for approximately 25years, this debt can never be paid, I feel I have tried but it’s all becoming too much. Can I declare bankruptcy?
Also can they ask to use my disability payments towards the debt?
Sara (Debt Camel) says
Do you mind some questions? You are now renting? How much is left from this old mortgage shortfall? How large are your other debts?
Bev says
Do you legally have to include a new partner/spouses income on an I & E form even though debts were from a previous marriage? Surely debts/joint debts incurred from previous relationships have nothing to do with what a new partner earns & he/she shouldn’t be made to include their earnings to create a disposable income for a debt that has nothing to do with them?
Do you also have to give bank statements, bearing in mind that most people are paperless today?
Thanks
Sara (Debt Camel) says
Is this from court or from a debt collector?
Bev says
The original debt management plan which the company were being paid through has stopped. A direct payment & set a new plan up direct with the debtor with a slightly higher monthly payment was tried but they want loads of information including a partners/spouses income details (presumably to create a disposable income but surely a new partner/spouses income can’t be used as it’s nothing to do with a debt from his/her partner/spouses previous marriage?)
Do bank statements have to be provided?
Thanks
Bev
Sara (Debt Camel) says
There is a difference here between what you have to do “legally” and the practical way forward.
Legally you don’t have to tell them anything about your partner or supply bank statements. But legally they may be able to charge interest (if this still the original creditor or has the debt been sold?) and can take you to court for a CCJ – neither of which you want.
A DMP (and that’s what you have, even though you are running it yourself) is an informal arrangement between you and your creditor, you are just trying to reach an agreement as to what is an acceptable payment from you each month.
In a situation where you had a DMP through a firm and have now switched to a DIY one, the creditor may be wondering if you could actually afford to pay a lot more and you left the DMP firm because they told you that you had to. That may explain all the questions.
What sort of debt is this? How old is it (since you opened the account, not since you defaulted)? Is it still owned by the original creditor – if it is, have they stopped adding interest and have they added a default to your credit record? How long will it be before your new DMP repays all your debts? Do you have other debts that are not included in this DMP?
Jackie Littell says
I have been left with a bill from my dads funeral. The funeral people want £1,600. I am on JSA and my father who passsed away on 13th Aug 2018 was the last member of my family. I offered £10 month they refused that and want me to fill in a expenditure form. Do i have to or let them take me to court. I have nothing to lose.
Sara (Debt Camel) says
Have you seen if you can get help with the funeral costs? https://www.gov.uk/funeral-payments
melaine says
I have a debt of 60,000 I had a arrangement a new company has taken over I have filled an IE form but I have maintained payment each month
but they still want to see bank statements & wage slips I had never been asked for this before from the previous company
Do I legally have to provide the bank statements and wage slips
Sara (Debt Camel) says
Well legally they can’t force you to provide them – but then they don’t have to carry on with the previous arrangements, so if you don’t want them to take you to court, it’s usually best to comply. Do you have any reason not to?
Is this 60k of debt all owed to this one company> Do you have other debts as well? How long will it take to clear it if you carry on paying at the current rate?
Dave says
Hi can someone you owe money to make you send them a copy of your wage slips
Sara (Debt Camel) says
Have you offered an amount to settle the debt?
Paul says
When filling in a income and expenditure form, the company requested pay slips and proof of earnings, to which I have no problem. But they are asking for Bank statements, do I have to supply these.?
Sara (Debt Camel) says
No you don’t. But they may be more likely to believe your I&E if you do.
RPD says
I received a letter from a solicitor handling a ccj I have from 2013, started paying it in 2018, saying the account has reached the end of its term and my financial situation needs to be reassessed. They have provided an I&E form. I pay £5 a month and whilst this could be upped to approx £10 per month, a family member has offered to pay a settlement figure of just under 50% of what is owed as the letter stated that they maybe willing to accept an offer of a significantly reduced amount and to contact them by phone. I did this, they would not give me a settlement figure but said that I just had to put in an offer and they would see if the client accepted, I offered the amount and they asked if I could pay that day, I advised provided they email me to say the offer was accepted then my family member would transfer the money to me to pay. They said they couldn’t email that day(did not give reason why) they then declined the offer and told me to complete the I&E letter. There is currently £1500 outstanding. Have they followed the correct procedure? Surely the client would have a minimum figure they would accept as stated in the letter? They also want my partners income details which he refuses to give me as the debt is from a previous relationship I was in. He is also concerned as I live in his mortgaged property.
Sara (Debt Camel) says
You can’t make a creditor accept an offer and there is little point in arguing with them about this.
Your partner’s house is not at risk from a CCJ in your name.
What is the rest of your financial situation like? Do you have other problem debts you are paying small amounts to? Other problem debts you are not paying at all? ?
RPD says
Thank you for replying so quickly. I have one other ccj I am paying £5 a month for, no other debts. I’m just trying to understand why they mentioned a significantly reduced amount when they won’t tell me what they would be prepared to accept. I haven’t missed any payments.
Sara (Debt Camel) says
well I suggest you talk to National Debtline on 0808 808 4000 and get them to draw up an I&E sheet you can show to the solicitors.
JohnO says
Hi. A debt incurred by my wife, but in my name has been passed to solicitors. My wife hid it from me and said that the debt had been sorted, until I found the solicitors letter. However, in order to rectify, I have offered them a sum of money per month (£50 a month on an £1800 debt, so paid off over approx 3 years). They now want me to give them a full I&E before they even take instructions from their client. I can probably afford more but with the current financial crisis and everything going up, I don’t want to leave myself short in an emergency. Is there a magic figure or ratio debt collectors use? Will they seek more from me or will they allow me to have some excess money left at the end of the month? Thanks
Sara (Debt Camel) says
There is no magic figure or ratio. You could complete this budget sheet https://tools.nationaldebtline.org/yourbudget/ which will prompt you for expenses you may have forgotten and suggest what to offer. Don’t underestimate expenses and allow for things like Xmas, money for servicing the car, dentists etc.
JohnO says
Thanks Sara. Say hypothetically if I have £150 left a month, and I’ve offered £50 per month, are they going to demand the full £150 from me? Or do they usually allow some excess? It’s all new to me I’m afraid.
Sara (Debt Camel) says
the offer you make should take account of putting money aside for expenses that don’t happen every month- as I said things like car servicing and dentists. If after that you still have money left over, then a creditor would expect to be paid more.
Paul says
Good Afternoon
Please could you help I have been paying Link Financial £1 a month, but now they have sent a payment review and I was wondering should I ask them for a copy of the credit agreement and should I stop paying the £1 a month until I get a agreement.
Sara (Debt Camel) says
What sort of debt is this for?
Can you pay more than £1 a month to it if they can produce the credit agreement?
Do you have other problems debts or any arrears on bills at the moment?
Paul says
Good Morning
It is for a credit card and really not sure if I could pay more as all my bills have gone up but my wages have not. Was just thinking that if they can’t produce the agreement then it would give me some breathing space as it would be one less thing to worry about right now. But was not sure if I could ask for the agreement as I have been paying the £1 a month for a few years.
Sara (Debt Camel) says
Yes you can. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/
MISS A M says
Hiya
I have had an agreement with a dept. collection agency for 15years now and pay £50 a month I now owe 6k but they keep asking for an up-to-date incomings and outgoings. Looking at the trail above I’m not legally required to give but will do out of good will. Question is – will they have the old expenditures on file still?
Sara (Debt Camel) says
can you tell me what sort of debt this is? Who was the original lender?