A reader asked:
I have a Debt Management Plan where I still owe 17k to 10 creditors. I have been paying for ten years at £150 a month, so it will end in about 8 years. Most of the debts have gone from my credit record but a few are marked as “on a DMP”.
I want to pay off the debts and improve my credit rating. I have been offered about 7k by a relative, so I could offer all my DMP creditors around 40%. How would settlements affect my credit rating? Is it worth me finding out if the debts are actually enforceable?
It’s a great idea to try to end a long-running Debt Management Plan (DMP).
I have already looked at offering settlements where the DMP had only been running a few years. And this Guide to F&Fs looks at the how to make a good full and final settlement offer to a creditor.
But this reader’s case is different:
- older debts have different options as it may be that the debts are unenforceable;
- there is the added complication of the different way his DMP is showing on his credit record.
Are the debts enforceable?
It’s best to do this before you offer a settlement.
For credit cards, catalogues and most loans, the debt collector has to be able to supply you with a copy of your Consumer Credit Act agreement if you ask for it. See How to ask for a CCA agreement, which looks at how to do this and when you should do it. It doesn’t apply to overdrafts, utility or mobile bills.
How likely is this to work?
This reader’s accounts are at least ten years old. It is likely that at least some of his current creditors may be unable to produce the CCA agreement:
- the older a debt is the less likely it is that it can be found;
- it is also harder to find if the debt has been sold to a debt collector, who usually has to ask the original creditor for it.
If it can’t be found
If the creditor can’t produce the CCA agreement for your debt, it is unenforceable.
I would allow the debt collector a couple of months before deciding that they aren’t going to be able to find it. Three if you are feeling nervous.
The debt is still legal, it stays on your credit record and the creditor can ask you to pay it … but they can’t make you by taking you to court. The regulator says they have to explain this to you – they aren’t allowed to pretend you do have to pay it.
In this case you can simply stop paying the debt – or tell your DMP firm to stop paying it, explaining why.
There is a small chance that the CCA agreement could be found later. This seems to be rare – if the debt collector hasn’t found in in the first few months the chances of it turning up later seem very low! To prevent that being a problem, and to stop the odd polite letter, you may decide to offer them a really low settlement amount, say 5%.
But if you want to offer this low amount to tidy up the loose end, then it is best to stop paying the debt first for a couple of months. Then the creditor will realise you are serious about not carrying on paying them. And then make your low offer. If they reject it, just say then you won’t be paying them anything.
This is why it’s worth asking for the CCA agreement before making a good settlement offer. By clearing out of the way any unenforceable debts you will have more money left to settle the others.
When the CCA agreement is produced
If you aren’t sure that what you have been sent is a proper CCA, read “How can you tell if it’s right” in the main article on CCAs.
If the creditor produces the CCA agreement, then the reader can just make the full and final settlement offer of 40% that was planned. That is a very good offer for a debt that old if only low payments are being made. He can help ensure the offer is accepted by:
- explaining that the money is coming from a relative if it will help to settle the debt; and
- enclosing an income and expenditure statement showing that he can’t afford to increase his monthly payment.
The only downside to asking for a CCA agreement is that if the creditor finds it, they may then decide to go to court for a CCJ. But that would be pretty unusual if you are making them a good settlement offer!
Effect on your credit score
Settling debts doesn’t improve your credit rating. People often don’t believe that, it sounds so odd. In practice settling the debts makes some lenders much more likely to give you more credit and it’s vital if you want a mortgage in the next few years. But that headline credit score number will not change.
Where a debt already has a default date, it is going to disappear 6 years after that date and making a full and final settlement offer won’t change that. In this readers case the debts have already gone – they will not reappear.
For debts with an arrangement to pay marker and no default date, settling the debts will mean they drop off 6 years after the settlement.
It is a pity all the debts weren’t defaulted originally – the reader should ask the original creditor (not the current debt collector that owns the debt) to add a default to the record back before it was sold.
If that is done – and some creditors do agree easily – that will remove the debt sooner and improve the credit rating. But do this after asking for the CCA agreement and sorting out the F&Fs – it’s too complicated to try to do this all at once.
Do F&Fs make it harder to get a mortgage?
How does a DMP affect your credit score?
Do I have to pay a debt not on my credit file?
Bob says
Hi Sara,
I am in the process of trying to settle two debts from pre 2006. They are still with the original lenders so no point asking for the CCA. Santander have replied requesting I & E, where the money is coming from, details of other debts including balances, and what offers have been made to them. The others cannot produce the CCA so I am treating them differently as per your advice on this website. Can I reply to say the settlement offer is for the Santander debt only and how/should I explain the others?
Sara (Debt Camel) says
Have you asked for the CCA for Santander? For very old accounts this can sometimes be worth doping.
You can say you aren’t making offers to unenforceable debts, I don’t see any reason to give Santander the details of them
Steve says
Hi Sara
Just got a CCA letter from the PRA group after 6 months
Letter looks suspicious photo copy knock up with terms and conditions on all pages
Page 1 has my name and address at the top and bottom right has a tick in the box with the date 1/09/10
There is no mention of any amount of credit or a credit limit
They have also sent a letter saying if I pay now they will give me a 10% discount on the amount I owe
which seems strange if they have found the CCA
Should I challange this CCA or is this correct
Regards
Steve
Sara (Debt Camel) says
See the article above for who to talk to if you are not sure you have been sent a correct CCA – I don’t give an opinion on this.
PRA will probably have paid less than 10p in the £ for this debt – they will be delighted to settle it at 90%.
Helen G says
Hi Sara
Following Steves comments I had two accounts with PRA and requested CCA’s. One account turned out to be an overdraft and the other account the CCA could not be found. Previously and over a period of years I had offered settlements all of which were refused. The one lesson I have learnt is “Patience”. i.e. just because I would like to settle the accounts it did not mean that PRA were on the same page.
When the CCA could not be provided and redacted copies were not put up I offered 5% in full and final settlement of both accounts which was accepted fairly soon after my offer. Hope this helps.
Helen G
Nick says
So just to be clear, if the debt defaulted more than six years ago and has already dropped off my credit record, there is nothing that PRA can report to credit agencies that will make the debt reappear if I choose to stop paying when they have failed to produce the CCA? Or if we agree a partial settlement?
Sara (Debt Camel) says
Correct.
Harriet S says
Hi,
Could I check my understanding on something please? I have an account that has defaulted over 5 years ago, I have been making repayments every month for the whole time, the last 3 years with PRA – who seem happy with my monthly payment. Once the default drops off my credit report, does the unsecured lending then class as ‘unenforceable’? And if they tried to threaten a CCJ before the six years are up, am I then okay to do a CCA request!?
Sara (Debt Camel) says
Once the default drops off my credit report, does the unsecured lending then class as ‘unenforceable’?
No – many debts are enforceable even though they do not show on your credit record: https://debtcamel.co.uk/debt-not-on-my-credit-file/.
You have been making payments to this debt – it will never become statute barred.
You can ask for a copy of the CCA – unfortunately these are normally pretty simple to produce for payday loans, so you should not exp[ect there is a good chance this will work.
James Burry says
I just found out that a old welcome debt of which was sold to Cabot isn’t secured or a ccj I’ve been paying 1 per month since 2007. I was under the impression that the the loan was secured where do I stand. They also can’t provide me with the cca details as well
Sara (Debt Camel) says
Cabot has said they cannot provide the CCA and that the debt is unenforceable?
Presumably this no longer shows on your credit record?
Did Cabot previously say that it was secured or that there was a CCJ?
James Burry says
Hi there is no charging order on land registry no ccj. And yes Cabot have said the debt is unforceble however they said they can still chase the debt. Do I have to pay
Sara (Debt Camel) says
If Cabot have said it is unenforceable, then no, you don’t. Just tell them you will not be making payments. They may occasionally ask you to pay – every time they should tell you the debt is unenforceable. They will probably stop after a while!
EnKay says
Hi Sara,
Hope you are well.
I would appreciate if you could provide a response to my situation.
I have some debts, 4 of which are currently owned by LINK (purchased from the original creditors; unsecured loan and credit cards).
All debts have fallen off from my credit reports.
LINK manages 3 of those themselves, Moorcroft manages 1 on behalf of LINK.
I have recently sent CCA requests to LINK for all.
LINK came back with responses for 2 of them saying “the original creditor has confirmed that they are unable to comply with your request within the 12-day initial time frame. Although the account is unenforceable the outstanding balance remains collectable and it is acceptable for creditors to register and continue the reporting of a default”.
I know from your previous posts that the default will not reappear on my credit report.
My query is – should I simply stop paying (I manage the DMP myself), or do I need to send them a letter first to say that I will not be paying unless a CCA is provided?
Also, if they do manage to find the CCA, will they contact me first for a payment or will they go for a CCJ before notifying me?
Many thanks for your time.
Sara (Debt Camel) says
If you decide to stop paying, you should definitely tell them why.
But this is very soon. The CCA may well turn up. You can stop paying now if you want, or you could just wait a couple of months, by which point it is less likely the CCA will turn up.
if they find the CCA, they should tell you. And you can then start paying again. Debt collectors don’t actually want the bother and cost of going to court unless people won’t pay.
EnKay says
Thank you for your quick response.
Is there any formal letter format I should follow to tell them I am not going to pay?
Should I tell both Moorcroft and LINK (for the account managed by Moorcroft for LINK)?
Many thanks.
Sara (Debt Camel) says
No, just say as the debt is unenforceable, you will not be making any payments and that you will resume if they do produce the CCA. I would tell them both.
Chris says
Wow here’s an interesting one, I asked for my CCA from Cabot in March 2021, they replied, finally after 13 months April 2022, they have finally found it. 13 MONTHS
What can I do? Is there a time limit on the request and finding the CCA?
Help please
Sara (Debt Camel) says
Well it is certainly unusual, but no, there is no time limit. Unless you think the CCA doesn’t look right, you need to make plans to start repaying the debt, if that is affordable.
Chris says
Hi Sara,
Thanks again, here’s another surprise move by the DCA they have admitted fault for the delays, and are now accepting 5% to close the accounts… I am jumping at the chance to rid myself of these two accounts.
Chris
Sara (Debt Camel) says
oh! good!
Chris says
Hi
Both of those are now settled. Hurrah. That was with Cabot.
Now I have a problem with Pra Group requested my CCA …. I received a reconstituted CCA contract t&c item. But no signed agreement. There is zero mention of me any of it. I can look again.
They sent a letter to say it is unenforceable. But still to pay.
I said NO!
This is the reply
“Hi C
Thank you for your response.
Agreements provided do not have to be the original documents, a reconstituted agreement is deemed as being acceptable to our regulators and does not have to contain signatures or be the actual signed agreement. You can get further info on the CCA website around acceptable reconstituted agreements http://www.handbook.fca.org.uk
Please let us know how you would like to proceed?
Yours sincerely
JQ
Is that true? I would say from first hand experience that it is a lie.
Sara (Debt Camel) says
They sent a letter to say it is unenforceable.
So PRA have said in writing that the debt is unenforceable?
Chris says
Yes I wish I could add the photo of it.
Do you think they have made an error?
Sara (Debt Camel) says
If they have said it is Unenforceable then you can ignore requests for payment. Which is why I checking you didn’t mean to write Enforceable.
Sean says
Hi Sara,
I have a letter that says their client (creditor):
“They have advised that they are unable to provide a copy of Opening Agreement of the account”
But haven’t explicitly used the word unenforceable.
They have since gone quiet and not chased.
What if any action would you consider in such a circumstance?
Sara (Debt Camel) says
So they haven’t said it is unenforceable.
Have they provided a reconstituted CCA agreement? That should have your name, address etc. if you aren’t sure if it is valid, talk to National Debtline on 0808 808 4000 or post on the Legal Beagles forum https://legalbeagles.info/forums/forum/legalbeagles-consumer-forums
Sean says
Hi Sara,
Forgive the long delay and thank you for your response!
No they only said the above and followed up with no CCA; reconstituted or otherwise – and have not followed up since with either a request for payment (nor indeed for any reason).
I did message Legal Beagles Forum twice – in both cases no response.
Seems like everyone wants to leave this one dormant (which of course works for me). Drops off in 2 years)
Sara (Debt Camel) says
OK but the next time you hear anything, reply that they have said they cannot produce the CCA agreement so can they please confirm that the debt is unenforceable until they do.
Chris says
Thanks Sara, your reply is one good thing this day, I think I’m having a Friday the 13th week of it. 😂
I will have to sort an arrangement with them.
Have a good day
Mia says
Hi Sara
I have just phoned Capquest (debt collectors) specifically which address I should use to request a copy of the CCA, as the Arrow Global are the debt owners. Address for capquest is different (Glasgow address), whereas Arrow Global is Manchester. I am aware that they are part of the same group of companies.
It was verbally confirmed that they couldn’t produce the CCA, and they agreed to put it in writing. I am still keen to send an official written request, with the £1, because I want proof I have followed the correct channels and procedures, and would like proof of my own that I have sent the letter. Throughout the call, I was not told which address to use, and was met with lots of obfuscation/deflection as to which address to use. I found this odd, however after a half hour phone call (most on hold), I told them I would wait a week for the written confirmation of what they had told me (i.e. they can’t produce a copy of the CCA)
Has anyone dealt with Capquest/Arrow Global to request the CCA copy? My instict tells me to write to the Arrow registered address, as Arrow are the current debt owners, but their notice of assignment letter requests comms via capquest.
Many thanks
Sara (Debt Camel) says
I would send it to Arrow and send a copy of the letter to CapQuest. “here for your information is a copy of the CCA request I have just sent to Arrow”
Matt says
Hi Sara,
In May 2018 I took out a loan with AA Loans (underwritten by Bank of Ireland) for £25,000, on a 60 month term.
Original repayments were £558 a month, which honestly were unaffordable, and it’s my belief they never should have lent me so much – I was in a debt spiral and this worsened it. I used the loan to pay off other debts I had accumulated, and the repayments soon became too much for me. Thankfully I found Stepchange in November 2018 and went onto a DMP, a huge relief. I heard that you can claim against a creditor for irresponsible lending, what is the process for this please?
I’ve managed to clear all the other debts that were included on my DMP, there is around £18k remaining on this loan, which AA sold to Intrum in March 2020. I’ve been dealing with Intrum directly since March this year, having closed the DMP. I set up a Direct Debit for £433/month (the same I was paying to them via the DMP).
They want me to complete an affordability assessment, which I haven’t done yet. I heard that potentially they can’t enforce the debt if they can’t produce a copy of the CCA. I wrote to them on 1st June using the National Debtline template, via signed-for delivery. The 12 days have now passed and I’m wondering what I should do next? I’d be really grateful for your advice on the best course of action to take.
Sara (Debt Camel) says
The process for an affordability complaint is here: https://debtcamel.co.uk/refunds-large-high-cost-loans/. Your complaint will be against Bank of Ireland, not the AA and not Intrum. Use the form here: https://www.bankofirelanduk.com/help-and-support/how-to-complain/your-complaint/
You should also look at affordability complaints against the debts that you cleared with the Bank of Ireland loan.
You can’t assume they won’t be able to produce the CCA agreement for a couple more months. This was a recent loan and you were paying a lot a month to it – it is likely (but not certain) that they will be able to produce the CCA agreement.
Matt says
Hi Sara,
Thanks for the quick response, it’s much appreciated. I will look into those links regarding the affordability complaint.
For the outstanding loan, is my best bet to continue paying the monthly Direct Debit of £433 for the next couple of months or so, and see if they present the CCA during that time (I guess best for me to keep quiet and not chase them in the meantime?)
Finally, if they chase me to complete an affordability assessment, shall I try to defer this and just keep paying the £433 for now?
Thanks so much for your advice
Matt
Sara (Debt Camel) says
is the £443 affordable with all the bills and price rises this year?
Matt says
Yes it is affordable at the moment. I’m just thinking maybe to keep paying it for now, so as not to rock the boat for the next couple of months and then reconsider say at the end of August, based on whether they’ve found the CCA?
Sara (Debt Camel) says
that sounds good – say you will do an affordability assessment when they have produced the CCA agreement.
Lynda says
Hi I have a question to confirm. I have 2 credit cards that I was personally paying by agreement with some credit companies of a debt that was from 2011. These have been nominal payments of which I recently stopped paying as I don’t believe the balances to be correct and one I thought was in my ex partners name. However because the payments were small I had continued paying them. There was a sign if isn’t amount of interest loaded on these when I originally defaulted aswell. I have been looking into whether they are statute barred which I thought was more of a ‘time’ issue but upon reading it included contact whether that’s correspondence or making payments. I requested my cca however they cannot produce these for either but have sent a statement from 2006 (when I originally opened the accounts) sling with a systems of the payments I have made over the last couple of years. On that basis I’m thinking that although my defaults have now dropped off my credit file, the debts are not statute barred snd are still enforceable. I’m thinking of offering a full and final settlement snd want to clarify that this will not re-appear on my now clean credit file. I have read the threads that suggest because they have now dropped off that they will not re-appear once I have made snd gad offer accepted, can you confirm that this is the case please before I draft this offer. So sorry it’s long winded, thanks
Sara (Debt Camel) says
If you have been making payments, the debts aren’t statute barred.
But if they can’t produce the CCA agreements, they are NOT enforceable. Has the creditor said clearly that they cannot produce the CCA agreement? When did you ask for the CCA agreements?
Lynda says
So I wrote to them in 2/3/2022 and had a reply yesterday by way of courier requiring a signature! It was a bunch of statements for my credit card from 2006 2011 and a few from 2017. There was no complete set of dates just to add, they were random statements. The letter stated they were unable to provide copies of cca as they were no longer available from the credit card companies because of how old the accounts were. It said how much I now owed and when the cards were taken out. There was a statement of payments I had made previously and some copies of letters saying where the debts had transferred to/from as they’ve swapped collection company several times. It also went on to say that as I’d made payments it was my debt and they would contact me in 21 days to secure a payment plan.
Sara (Debt Camel) says
You aren’t disputing that it is your debt – that is not relevant.
Did they say that the debt was unenforceable? If they didn’t you need to go back to them and ask them to confirm this.
Who is the current creditor?
Lynda says
It is with Lloyd bank and RBS and they haven’t said it’s not unenforceable at all. Hence the query of double checking the previous threads.
That’s the original company, it’s now with Cabot.
Sara (Debt Camel) says
I suggest you go back to Cabot by email and ask them to confirm that the debts are currently unenforceable.
Fi says
Hello Sara
Please could you comment on my two debts below? Thank you for the very useful information you provide in your articles I have read.
I have two debts from 2008 – my 1989 only credit card (CC) – possibly debt sold on in 2017 although I have not corresponded in any way with debt purchaser(?) writing to me – and a 1989 current account (overdrawn) with the same bank. I continue to make £1 a month cash payments in-branch for both debts,. DCA statements sent to me show payments on CC so I assume the bank is passing them on. In 2019, I requested a CCA with follow-up reminder, for the CC from the Bank and my £1 PO was returned with no CCA. Is that an indication the Bank no longer has it from 1989? The two debts did show on my credit file but had gone on my last credit report (2019 Experian and Equifax).
Could the CC debt be statute barred next year on the basis that I have not communicated with the DCA in any regard, nor have they taken legal action? I do not wish to instigate a new limitation period unknowingly. I could consider a low settlement offer if a CCA exists yet must ascertain if it does not. How should I proceed? Should I deal with the original creditor or start up contact with the DCA, to request CCA from them? Regarding the current account debt, I’d consider a low settlement offer on this debt (c.5%). A collector ‘for client’ writes to me. Thank you.
Sara (Debt Camel) says
Could the CC debt be statute barred next year on the basis that I have not communicated with the DCA in any regard, nor have they taken legal action?
No debt that you have paid continuously will ever become statute barred. Every payment you make acknowledges the debt.
Have debt collectors bought these debts or are they collecting on behalf of the original creditor? The statement you get shouid confirm this.
Fi says
The CC debt is purchased probably – DCA statements outline they are ‘Owner’ and states the ‘Original Lender’, ‘Agreement Date’ and ‘Original Account Number’. They describe £1 transactions as ‘Direct Payment’. Correspondence requests I switch my payments to them.
Regarding the current account – in branch they issue mini statements when I pay and can see account history (recent?). A DCA has written to me on behalf ‘Our Client’ three or four times. Collecting, I would say.
Sara (Debt Camel) says
Yes that CC debt has been sold. You ask the debt purchaser for the CCA agreement, not the original lender.
The overdraft hasn’t been sold. And a CCA agreement isn’t relelvant for an overdraft. You can offer 5% but that depends on your financial situation – can you afford that? Could you afford a lot more?
Fi says
Thank you particularly for addressing my question on statute-barring. I see it is about my making payments, irrespective of who I was making those payments to.
I am not employed/ have no salary coming in. I receive state benefits. I received a PPI refund on the CC from original creditor. I consider I have the possibility at this time to offer c.5% as FF settlement of my debts in total (£8+k CC/£3.5+k CA).
I envisage making any settlement offer for the current account to the Bank first off. Should I do this in writing best and expect any agreement to be in writing from them before payment? From there, I will contact the DCA of CC and request the CCA and await the outcome. Does this sound appropriate? Thanks once again.
Sara (Debt Camel) says
I am not sure if you have no income, why you would want to make a 5% settlement offer.
What benefits are you in receipt of?
Are you buying or renting?
Do you expect anything to change in your situation in the next couple of years?
Fi says
Thank you for your prompt reply to me. I considered this a possibility of bringing my debt matters to a close that’s all. However, with thought, if my offer regarding the CA at that level is likely not to be productive, perhaps I will just continue with the current situation for the CA (i.e. making monthly payments). I receive an incapacity benefit and housing benefit. I rent, my landlord is a housing association. I do not anticipate a change.
Sara (Debt Camel) says
If your only income is from benefits, then I suggest you look at a Debt Relief Order, see https://debtcamel.co.uk/debt-options/dro/. As your situation sounds unlikely to get better and you have a secure tenancy, a DRO may well be be your best option – it would resolve your debts with no need to make further payments. Phone National Debtline on 0808 808 4000 about this.
Fi says
Thank you for providing this information.
A final question, can you see any reason why I can’t contact the DCA to make a CCA request? I feel this would be useful for my knowing the status of the debt on my CC. Thank you very much for your commenting on my debts overall Sara.
Sara (Debt Camel) says
You can ask for the debt that used to be a credit card. But seriously it doesn’t help with your overall situation as you are still left with a large overdraft debt. There is little point in spending time and mental energy doing this. A DRO will sort out both debts very simply.