A reader, Mr P, asked:
I have debts of around £28,000 on five credit cards and loans, which I couldn’t pay from last summer.
A Debt Management Plan (DMP) was set up a couple of months ago. This will take about ten years to pay off.
The DMP firm suggested an IVA or bankruptcy as I’m not a homeowner but I do not really want to get into an IVA or bankruptcy as these will affect my credit score for longer than 6 years.
I’m thinking I can borrow a maximum of £6,000 from family. So 25% each. Is it too early to suggest a partial settlement on these debts? I also have some payday loan cases with the ombudsman which I’m hoping can refund me £4-5k in interest.
The simple answer here is Yes, this is a lot too soon!
But let’s look at Mr P’s options. Some of these may be useful for you even if your case isn’t the same as his.
Lenders rarely accept low settlement offers soon after a default
It is less than a year since Mr P was unable to pay these credit card and loans. He hasn’t said why – perhaps his income fell or his expenses went up if he separated from his partner.
His creditors will be hoping that in a few years he will be able to pay them back, so they aren’t going to accept a 25% or even 50% settlement offer now.
When Mr P can show his situation is very unlikely to improve – he may have retired and be living on a State Pension, be permanently disabled or have a major health condition – a creditor may consider a low settlement offer. But otherwise, no they won’t, not for a long while.
What should I do when an F&F offer has been rejected looks at all the reasons why an offer may be refused, and if you are hoping to get a partial settlement agreed, it’s good to read that before you make the offer!
Payday loan refunds will let him offer more – but it may still not be quick
If Mr P can get several thousand pounds back in payday loan refunds, that would increase the settlement offer he could make. Possibly up to a level that a debt collector may accept once his loans have been sold in a year or so.
But the reality is that even after refunds, he will still be doing well if half of the lenders accept a Full and Final settlement offer in the next two years. It may take several more years to get his debts cleared this way. And then he would still owe a debt to his relative that lent him the money for the settlements.
His credit score will be bad for most of the next 6 years
Mr P’s credit records will be showing five defaults for most of the next six years. Getting settlement offers is not going to change that.
His DMP firm was quite right to suggest that a ten year DMP is not a great option and that he should look at an IVA or bankruptcy instead.
Mr P is was wrong when he said: “I do not really want to get into an IVA or bankruptcy as these will affect my credit score for longer than 6 years.”:
- bankruptcy will definitely go after six years except for the very rare occurrence of a long bankruptcy restriction order;
- as he isn’t a homeowner, his IVA would probably be five years. The majority of 5 year IVAs are finished and will drop off his credit record at the six-year point.
See Bankruptcy, IVA, DRO & your credit rating for details.
In this situation, it may well be better for Mr P to go now for an insolvency option. That is likely to be bankruptcy as he doesn’t have a house with equity to protect, unless he has other assets.
He didn’t mention concerns about a future mortgage but that is often in the back of people’s minds. It is possible to get a mortgage after the six year period of bankruptcy or an IVA. And he isn’t likely to get a mortgage in under six years if he waits for years in a DMP hoping to get settlement offers!
Wait a bit and see how the DMP goes?
It’s common for setting up a DMP to come as a huge relief – no more worry about creditors. And Mr P may want to wait and see how much he does get from payday loan refunds.
He could settle down in the DMP, have a go at cutting his expenses and pursue the payday loan refunds. Then think again in 6 months.
But it’s best not to wait too long. If he does decide bankruptcy is best, the sooner he gets it over with, the sooner he is out the other side.
How much will my credit score change if…
Choosing between IVA and bankruptcy
Choosing between an IVA and a DMP
Warwick65 says
Nearly all my accounts were opened long ago, pre Apr 2007. I sent CCA requests to all my creditors and only a few were able to provide the agreements. I stopped paying and all my debts are now statute barred.
CCA requests might be worth looking at
Sara (Debt Camel) says
Well it’s not likely to help this reader’s case – his debts haven’t yet been sold to a debt collector! But for people with old accounts whose debts have been sold, I agree – see https://debtcamel.co.uk/settlements-old-debts-cca/ which was in answer to another reader’s question.
Brian Rose says
Warwick 65, what do you mean your debts became statute barred? You say that a few creditors were able to produce CCAs (do those initials stand for consumer credit agreement?). Did you stop paying only on those debts where the CCAs could not be produced and then how did the statute barring come about? And have you continued paying on those debts where the CCAs were produced?
warwick65 says
CCA does indeed mean consumer credit agreement
As for statute barred , while it is slightly complicated, in essence it is 6 years since the cause of action (usually the default or termination of the account). Of course if you later make a payment or acknowledge the debt that 6 year ‘clock’ starts all again.
In my case I stopped paying all my accounts- yes it was a ‘choice’ but one driven out of necessity, I was not working so did not have the money. Even the ones where a compliant agreement had been produced thanks to S77-78 consumer credit act ( and they do not have to be the actual agreement or indeed have any signatures) I stopped paying , I simply did not have the money. Remember a request under the Consumer Credit Act is for information only
Brian Rose says
Warwick 65, I’ve only just seen your reply – for some reason the thread ended up in my spam folder. Anyway, in my case I have been making regular £1 per month token payments to all my creditors for several years (as that’s all I can afford) so I guess the regular payments constituents acknowledgment of the debt. In your case it seems you didn’t pay anything so our situations are somewhat different. I was thinking that if asked all my creditors for the original CCA and stop paying the ones that can’t produce the CCA then is there anything they can do if I stop paying?
Hannah says
I don’t have a huge amount to add to this except a word of warning. I did settle some debts early, with the assistance of a free debt advisor from the council.
She rang with me with my authorisation and rang to ask what they’d accept in full and final settlement, hoping to get a reduction. Which we did on several. I paid there and then on the phone, but my credit history is now showing as a permanent default even though I paid them off.
We’ve rang them since, and they’ve said because I didn’t pay the full amount it shows as a default.
Obviously, I’m furious as the whole idea was to repair my credit by paying early.
Do be careful and do clarify if you are offered reductions how it will effect your credit score.
It was only two companies out of approx 7 who did this, the rest are shown as paid off.
I probably need to look in to this further to correct.
Hopefully, this helps someone and doesn’t fall in to another trap.
Sara (Debt Camel) says
What should happen after a full & final settlement:
– the balance showing should be zero.
– there should be a “partial settlement” marker on the account – that doesn’t actually affect your headline credit score calculation though.
In the reader’s case, all his debts already had defaults added. In that case, the F&F won’t improve his credit record or make it worse. but more lenders may be happy to lend to him as his debts have been settled.
Hannah – how were these debts showing before the settlement? how do they show now?
Martin says
My debts are now well over 6 years old. I have a work pension with a value of £65000 (less tax on any withdrawals). I recently saw an article saying this pension could not be touched if I went bankrupt, I have seen other articles saying it will be taken into account. I’m confused!!
Sara (Debt Camel) says
How old are you?
Are you thinking of going bankrupt or are you worried that a creditor may decide to make you bankrupt?
Your debts – can you say what sort of debts these were and have you been making payments to them?
Martin Johnson says
I am 67. I have a DMP with Stepchange. Most were credit card debts and have been sold on a number of times. I would be willing to go bankrupt, but not if my pension was at risk. The DMP will take me long after I am dead to repay and Stepchange have suggested bankruptcy. Debts amount to around £45k
Sara (Debt Camel) says
How long have you had the DMP?
Could you say something about your pension?
Martin Johnson says
My DMP started in 2015 (approx)
My pension is a draw-down pension with Aviva. I do not take regular payments from it.
Any other info you need?
Sara (Debt Camel) says
How large is this pension?
Martin Johnson says
Hi Sara
I did respond some days ago, but have not heard from you since.
In case the reply from me went missing the pension stands at £65,500 at present
Sara (Debt Camel) says
Yes, sorry I didn’t see your reply.
See https://debtcamel.co.uk/pension-safe-bankrupt/ – it sounds as though you may be in Case 5 – where your bankruptcy application may be refused.
Your options may include (and I suggest you talk to StepChange who know more about your case and may be able to say much more about what may be suitable):
– changing from drawdown to an annuity
– staying with token/low DMP payments and not caring that they won’t clear the debts
– trying asking for CCA as the artcicle above suggests – that may be able to “get rid” of quite a few of them if they are old and have been sold several times. Then if there are a few left you could take some money from the pension to offer a settlement on them?
Ffionpearl says
Better results are gained on low offers once debts have been sold. Advisers can make those offers on your behalf so getting advice should be the first step when considering f and f . Also there are odd loopholes. Going back to Pinells case in 1602 the law states there is no such thing as a full and final based on money as there is no consideration. So the offers have to be made binding on creditors and advisers word the offers to ensure this
Sara (Debt Camel) says
yes, I always suggest people use the National Debtline template letters
Molly James says
Hi Sara, I have 4 separate debts, totalling £34k. All are in default with Default Dates of 2014.
Two are with the same debt collection company (from two loans sold on to them), the other two are with major credit cards. As I have moved around a lot they do not know where I live, but the debt collector ones send letters to my parents house. I have just received a letter saying they would accept 25% of the value to settle one of my debt collector amounts. I am now thinking to send a standard F&F letter offering 25% to all. I can borrow this from a family member.
Should I do this? Do you expect it to be accepted?
This would be the first correspondence I have had with any of them in 5 years. I have never spoken to the debt collectors or acknowledged the debt. I do not have a CCJ on any. The two credit card debts have a different address and therefore I am unaware of any letters from them.
Sara (Debt Camel) says
the credit cards haven’t been sold to a debt collector?
Molly James says
Not that I can see on my credit report. Still showing as with the original credit cards. Thanks
Sara (Debt Camel) says
That sounds odd. Few credit cards would keep a 5 year old bad debt. Have you checked your credit records with all three credit reference agencies, see https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this. Are the CRAs showing your current address?
Molly James says
The CRA’s show my current address and Experian shows the credit cards through a linked address. Equifax does not show them at all (did not pull up any linked addresses). I have not used the other CRA. I will check that one now. Thanks
Molly James says
I’ve checked through Credit Karma and it’s the same as Experian. Two credit cards showing with original companies from a linked address. Two loans with current address. I am now thinking about asking Cabot (owner of the two loans) for the CCA agreement. Would this affect the statute barred possibility this year?
Unsure on what best cause of action is for the credit cards. They were both opened in 2007 (defaulted in 2014). Is it worth asking for the CCA agreement on those?
Obviously I would prefer to have all 4 statute barred this year. But do not want a CCJ. Atleast Cabot are mailing my current address. The two credit cards could send a letter of intention to take to court to my previous address and I could end up with CCJ’s without knowing (none currently). Thanks for you help.
Sara (Debt Camel) says
So you have a problem with no easy solution. It would be lovely if all 4 become statute-barred this year. It’s just incredibly unlikely…
Yes I think you should ask Cabot for the loan CCAs. This acknowledges the debt so they won’t go statute barred, but then Cabot is already looking at these so that is VERY unlikely to happen,
As you say the worst thing is if you get a CCJ without knowing it. It’s odd neither credit card has sold you debt, but it’s a big risk to just cross your fingers and hope.
Bev prince says
Hi Sarah.
Can I ask what happened. I’m in the same situation.
Molly James says
Update – I asked Cabot for the CCA for one and they could not find. That one is now gone (unless they somehow find it). The other Cabot I heard nothing about and will be stature barred now. Then the two credit cards I offered F&F to and they came back wanting all sorts of information (most I had provided). Then covid happened and I have not done anything with those two since. Atleast they now have my actual address so if they do chase me then I will know about it. And my total is now about 40% of what it was before (as the two Cabot have gone) so I can make a better offer if required. But I’m just leaving it for now whilst we are all dealing with covid. Can’t see them chasing me anytime soon, but the 6 years clock has started again with those as I wrote them letters with the F&F. But I know where I am and still have my existing savings to settle if required.
Molly James says
Hi Sarah,
Update from my special case. I phoned National Debtline and discussed with them. Forgetting about statute barred now. I’ve sent a CCA agreement request to Cabot, with intention of making a F&F offer, amount dependant on whether they find it or not. The other Cabot amount I am leaving until they contact me (no contact in previous 6 months atleast).
I phoned the two credit cards to give my current address and said I would be making a F&F offer to all my creditors, with details showing it was pro-rata, so fair to all. They were both good as I had called them years back when I had my problems and that was on my record. Likely why those debts were never sold on to a collector.
Only issue I have now is one of the credit cards is RBS and I have savings in my Natwest account. The lady said she could see the amount and asked if that was what I would be using to make the F&F offers. I said yes. Now it is likely they won’t accept a low F&F, that is fine, but is it possible they could just take money from my savings (natwest to RBS credit card) for their debt? Or is that not legal? If so I would rather transfer that money to a family member, as I may need it to pay the F&F offers to all. Many thanks
Sara (Debt Camel) says
That is hard to say. Banks don’t do this as often as they used to but they still can legally. I think you might want to move that money to be with a different bank you don’t owe any money to.
Terry says
Hi Sara,
I would like some of your advice on potentially setting all my debts which defaulted around Aug 2018. Debts consist of 4 credit cards, 3 loans, and a bank overdraft, all of which have been passed on or sold to debt companies.
Robinson Way – 3 debts total £7,500
Link Financial – 2 debts total £5,500
Moorcroft – 2 debts total £2,500
LCS – 1 debt total £1500
Total debt = £17,000
By the end of 2020 i expect to have around £8,500 saved up which i am looking at using to settle all the above debts by way of F&F offers. What is the likelihood of getting 50% offers accepted in your opinion? I have never responded to any calls, texts, emails or letters regarding these debts. Looking through all the letters recently i see one of the debt companies have already offered me a 40% reduction and some of the others have said to call up to discuss their ‘discount offer’.
I have been reading on your website about contacting companies regarding retrieving my CCA information from them and this is something which i might do but i would like to be in a position whereby i have a decent chunk set aside to be able to offer them if they do manage to get my CCA details.
Sara (Debt Camel) says
There are no guarantees about this sort of thing.
You are more likely to get offers accepted where a debt has been sold rather than passed to a debt collector to collect in for the original creditor. And asking for the CCA agreement isn’t relevant unless the debt has been sold.
There is no particular advantage in trying to sort them all out at the same time. If you are offered 40% off now, especially by an original creditor, you might think of taking it.
The advantage of accepting offers rather than making them is that you won’t be asked to complete an income & expenditure form… which I am guessing would show that you are able to make payments at the moment, and reasonably large ones? If that is the case a creditor may refuse a 50% offer. But they may accept… who knows what state the rest of the country will be in BG the end if the year..
Terry says
Hi Sara,
An income and expenditure would perhaps show that i am currently able to make payments (around £1k disposable) however my circumstances have changed now as my partner has stopped working and started full time education to be a nurse. My income is now having to stretch more in the next month or so as my partner who has similar size debts is being advised by the CAB to apply for a MAP bankrupcy. Her income is only going to be her SAAS payments which is only a little over £600. Can one of my reasons to get a F&F offer accepted be that i gambled very heavy in the past and that’s how mostly all our debts accumulated? This is the absolute truth but i could bend the truth slightly and say that the £8.5k i have to pay off my debts has come in the form of winnings from gambling and if they don’t accept the 50% then money might not be there in the future?
Sara (Debt Camel) says
so by the time you make offers you won’t have that much spare income – that helps!
the longer you wait before making offers, the more chance there is that the debts may be sold.
“can one of my reasons to get a F&F offer accepted be that i gambled very heavy in the past and that’s how mostly all our debts accumulated?”
no – how the debt accumulated is largely irrelevant. What matters is what you can afford to pay to it.
Nick says
Terry – For what it’s worth I found myself in a similar position a few years ago, with very high debts owned by half a dozen lenders and debt firms and also to HMRC, but I was also fortunate to have a good income. I wrote to all the debt firms to offer 30% F&F with a Stepchange I&E form and most accepted that. However, some firms, including Robinson Way, held out for more, and eventually accepted 50%. In all it took 2 years of arguing, haggling and making complaints to get F&F with all firms. You may or may not think it worth the effort but it saved me a lot of money. My personal experience was that it was helpful to explain the scale of the total debt. It was also interesting, and a surprise to me, that no firm requested any evidence to back up the numbers in my I&E form.
Terry says
Hi Nick,
When you filled in your I&E form can you remember how much disposable income you had and what was your total debt? Good to know that you got settlement offers on some of your debts for around 30% though, well done. As Sara mentioned above, it’ll be easier to get a lower F&F offer if the debt has been sold and looking at my letters and credit files it looks like only 2 of my debts have been sold, with the rest with debt recovery companies. Robinson Way have 3 of my debts and only one of them has been sold onto their parent company Hoist Finance. Seems like it would be better for all my debts to be sold to get a lower offer.
Nick says
Hi Terry
At the time I had about £75K of defaulted debt and disposable income after essential costs of about £50K/year. I think it helped in my negotiations that I was not a homeowner and had no assets other than a SIPP. Also that the debts were so large that bankruptcy would have been an attractive option, a point I made to the debt owners.
Something I discovered was that while some debt owners were very reasonable, others tried it on, both in letters and in calls, and were clearly in breach of the rules. I would highly recommend a careful reading of the FCA rules and guidance on what lenders and debt owners can and cannot do, and not be afraid if necessary to make a formal complaint.
Rob says
Hi Sarah,
I have debts in Australia of £11,000 that were sold in 2019 when I moved back to the U.K. I have been making payments of £400 per month but my income has dramatically lowered recently with no real sign of it improving. I requested a settlement offer which was given at 80%, around £9,000. I can’t manage that amount, but a relative has offered £5500, only if it would clear the debt. What do you think the chances are of them accepting a 50% offer. Do I go in with 40% first to see what they say? I have been very upfront and communicative with them when setting up the arrangement so far. They know I won’t be returning to Australia and the debt doesn’t show on my credit report here in the U.K.
Many thanks, Rob
Sara (Debt Camel) says
would the money from a relative be a gift or something you need to repay?
what are the rest of your finances like? do you have debts here? will you be struggling to pay the bills?
It may be simpler to just say you need to reduce your monthly payments to £10 and then ask for a reduced settlement in a while after they have realised they ain’t going to get £400 a month from you any more…
Rob says
Thanks for your super quick reply Sara. The money would be a gift, so long as it meant the debt was cleared in full. I don’t have any debt here in the U.K. My finances are just about ok here, I can manage but not with the debt payments that I’m making at present. I could request much much lower payments as you say, but with the interest being applied I’d be concerned that the debt would keep creeping up and up. My worry is that I’m looking to apply for a mortgage, and whilst the debt doesn’t show anywhere on my credit file, any due diligence on my bank account would see the monthly payments and would quite rightly flag. This is why I’m hoping to pay it off sooner rather than later. In your experience would a low settlement offer of 40-50% be accepted if the debt collectors understand that any other substantial repayment plan is not feasible? Many thanks
Sara (Debt Camel) says
If you want to offer this, you need to supply an income & expenditure statement showing your £400 a month has to be reduced to £10 (or whatever) and a letter from your relative offering £x if it will enable to make a full & final settlement on the debt.
I have no experience of what a creditor in Australia might be likely to accept.
Nick says
FWIW I was able to get my large defaults settled between at between 30% and 50% in F&F offers, although in some cases that took 2 years of haggling. In one case it was 0% as the lender just gave up bothering. So my suggestion would be to low ball it and see who bites. Bear in mind that for the lenders anything is better than nothing and that debt agencies will have bought for pennies in the pound.
Brian Rose says
You’re right Nick about debt agencies buying debt for pennies in the pound – I read recently that one of the biggest, Cabot, buy debt for 9%. Then, when they offer to accept just 30% to settle the debt, they make out they’re doing you a big favour. And that still means about 300% profit for them.
Sarah says
Hi, thanks for such a comprehensive and helpful article. I have a different situation, and wondering if I may be able to get agreements of partial settlements. I have only just gone into a debt management plan and have really only just started missing payments because I’m self employed and was subsidising the payments with my business overdraft, cards etc – until I couldn’t any more. So I have quite a lot of debt and very little income.
I’ve entered into a DMP in the last month. I have a house with equity, but selling would mean I couldn’t afford housing costs if I used the equity to pay off the debt.
My question is this: My partner has been offered a job overseas, and I’m going to go with him. I can’t work over there due to visa restrictions and so I’ll be unemployed, and won’t be getting disability benefits anymore. All of the debts are mine.
I do have a house to sell, and should have enough equity to cover the debt… but if I do that I won’t have any cushion to manage unexpected costs for my disability/medical care, and will be in the same position for housing when I return.
I’m therefore wondering if in my situation – i.e. I’m leaving the country for several years at least, I’m likely to remain unemployed, and I’m offering a partial settlement – might be more likely to be accepted? It is likely to be when the DMP has been running at token payments for about 4 months.
Sara (Debt Camel) says
Does your partner also have a house?
Sarah says
No he doesn’t own a house.
Sara (Debt Camel) says
Well you need to think about where you will live when you return. Might it be better to keep the house and let it out?
I would be surprised if many of your creditors would accept a low settlement offer now. After a year of token payments, many more will have selfd the debts to debt collectors who are more likely to accept a low offer.
Sarah says
Thanks Sara, unfortunately it’s not going to be possible to rent the house out because it’s a shared ownership. Only option is to sell.
Puts me in a sticky situation if they won’t accept a lower offer because it will essentially mean that I won’t be able to afford a home when I return.
Sara (Debt Camel) says
Have you talked to the housing association and asked for an exception to allow you to rent because of your disability and the fact you intend to return to the UK? You could say this would be just for two or three years – they would be unlikely to give an indefinite one.
If they won’t, then you could just sell the house, move the money overseas (where are you going?) and carry on with the DMP payments. Indeed reduce them because of your lack of income.
But ultimately is this the right move you and your partner? Taking into account your house as well as his earnings? They may be your debts, but your partner is benefits from living in your house.
Sarah says
Hi Sara,
It’s definitely the right move – the opportunity of a lifetime to live in South East Asia. The Housing Association won’t make any exception, so the house will have to be sold…
Having said that, I had no idea I’d be able to continue with the DMP from abroad and thought I’d HAVE to pay off the debts when I sold the house. I assume I’d just give them my new overseas address? Are there any downsides? (I assume they can’t send bailiffs but I really don’t want to end up in any trouble in the UK or overseas).
Thank you :)
Sara (Debt Camel) says
I know nothing about your health problems. But if the property is suitable for your health needs and many others wouldn’t be, you could contact the HA Trustee board and ask for an exception. You would have to justify this.
If you sell the house and money is left in a UK bank account, your creditors could go to court for a CCJ and try to enforce it by a third party debt order https://www.gov.uk/government/publications/third-party-debt-orders-and-charging-orders-ex325. If your individual debts are smallish and normal consumer debts (cards, loans) this would be unusual.
If the money is moved abroad, a debt would have to be pretty large for a creditor to contemplate trying to enforce it in a foreign country.
In any case, you would get notice of these problems coming up by being told that the creditor is going for a CCJ… at that point you could simply clear that debt if you want.
I suggest you talk to National Debtline on 0808 808 4000 about your options here.
Sarah says
I apologise for leaving this for so long, I had thought I’d responded. The housing association weren’t willing to look at renting it out while I’m away so it’s now in the process of being sold.
Knowing that they would be unlikely to pursue things while I’m abroad, and the fact I’d have warning time to take action is really reassuring. You mention calling national debt line to discuss but I’m currently with Payplan for my DMP, would they be able to give the same information? I’ve just spoken to my Payplan representative about something else and mentioned the move in very general terms. They have said that they would have to do another full review of my finances in order to change my address and manage the plan from abroad, I’m concerned that this would mean that I’d have to pay the debts in full and not be able to fund a home when I return. They also talked about an IVA as an alternative if I don’t have any income (which I won’t). I don’t want either of those options though. Can I change to manage the DMP myself or is that a bad idea?
Thanks so much, you do such an amazing and much-needed job here :)
Sara (Debt Camel) says
An IVA is a very bad idea. You can change to mange your DMP yourself, see https://debtcamel.co.uk/how-much-work-dmp/
Sarah says
Hi, updating the above situation, I’m still abroad and mostly have been able to keep paying the debtors the same amount without really letting on that I’ve moved abroad. However, I’m getting pressured to do a new income expenditure. Unfortunately I don’t really have any income at all, because I’m not allowed to work here. I’m not sure what to do. I’m worried that if I try and complete the new income and expenditure and highlight that I have no income then it will make them chase a CCJ or bankruptcy which I don’t want. Can you help me understand my options? Is it time to offer a settlement? One of my debts is a business one with Barclays, and they seem to be the most difficult or perhaps better to say the least understanding and flexible! Should I approach this one differently? Thanks
Sara (Debt Camel) says
Are you still in a DMP with Payplan?
Sarah says
Hi Sara, Thanks for a quick response, yes still with them, but last year when they asked to do an annual review I just ignored it (through being totally overwhelmed and stressed) and the requirement just went away! Now they are asking again a year later, and don’t think I can (or should!) duck this forever.
Sara (Debt Camel) says
How long has the DMP been running? How many debts have been sold to debt collectors? What is the total debt value?
How much are you paying at the moment? What has happened to the money from the sale of the house?
When do you expect to return to the UK?
Sarah says
It’s been running since early 2022, and as far as I can see 4 out of 8 have been sold over to debt collectors. Total debt is in the region of 40k and I do still have some of the money from the house sale, probably just enough to cover the debt, but a rather large lump of it went on unexpected hospital costs and I’m reluctant to leave myself with absolutely nothing to spend on healthcare should I have an accident, and need to have funds to fly back if needed. I’m not sure about date of return to the UK as yet, but I don’t reasonably expect to be back for the next 3 years.
Sara (Debt Camel) says
How much are you paying to the DNO each month at the moment? Is the Barclays business debt included in that – how large is it?
Where is the money at the moment? In the UK? In easy access funds?
Sarah says
Paying Payplan 60 odd per month and haven’t skipped any months since we started. Yes the business debt is included, it’s 13k. The money is in the UK, have a small amount in easy access funds and the larger proportion in the same savings only bank in an 18 month fixed, which I think is due to finish in May or June this year. I have thought about bringing the money over here, but there is very little financial protection here and a lot of fraud so I feel like it’s probably a big mistake to do that unless I don’t have any options.
Sara (Debt Camel) says
I think you need to be honest with Payplan about your situation, your lack of income, your health problems etc.
Sarah says
Thank you, yes I was wondering if I should, but my concern is that they will try and get me into an IVA again. (They said before, that if I don’t have £50 to pay monthly then they can’t do a debt management plan).
Sara (Debt Camel) says
You can say that you are happy to pay the current £60 a month out of your savings until it is clear when you will return to the UK and what your health is like. And at this point your situation is so uncertain you don’t think an IVA is appropriate.
NB if you come back to the UK in a few years you will not be able to get a mortgage because of your DMP and your credit record.
Sarah says
Thank you. That does sound like the best way to go about things. I’ve just requested a contact from Payplan to discuss my situation. Thanks so much for all of your help!
Jey says
Hi Sarah,
Thank you for this very helpful article.
This I submitted an application for a DMP for a loan and a credit card (the total debt is approx £19,000). I’m moving to Mexico soon to live with my fiance. I don’t have a job lined up yet but I have a few savings to cover me for the first 3 months. I’m not sure how to go about asking for my payments to be reduced as I will be unemployed for the next few months. Could you please advise if I should approach my creditors directly or do it through StepChange as they are helping me with the DMP.
Sara (Debt Camel) says
Are those your only two debts? Do you own a house? Do you intend to return to England? Will it be easy to find a job in Mexico?
Jey says
Thank you for your response. Those are my only two debts. I do have two other credit cards that i don’t use. I don’t own a house. I’m not sure when I will return but don’t intend to for at least a decade. I think I’ll be okay finding a job but the salary will be a lot lower.
Sara (Debt Camel) says
Then I think you should discuss your options with National Debtline on 0808 808 4000. Because a form of insolvency (DRO or bankruptcy) may be a much better option for you than trying to make small pay from abroad for a prolonged period.
pete jackson says
Hi Sara, I defaulted on a Natwest credit card in 2006, I asked for a CCA in 2013 which wasn’t complete and we argued for a while until in 2016 they sold the debt to Cabot..I was paying £1pm to Natwest and haven’t ever spoken to Cabot nor have I changed who I’m paying so natwest have to transfer my £1 to Cabot every month.. I did consider claiming ‘sold while in dispute’ but tbh at £1pm, why bother. Now 8 years on , and I’m 74, and Cabot have mailed me every month with letters/statements etc so not making anything from me, but now have offered to settle at 30% of the debt. I’m thinking of contacting them for the very first time with a lower offer, to test the waters, what do you think ? I’m currently understanding my debt doesn’t die with me so would come out of my ‘estate’, assuming there is anything…I don’t really want to leave this for my kids to sort out.
Sara (Debt Camel) says
Well you can if you want. But why not just ask Cabot to produce the CCA?