Topic: Debt company

[ScouseTBE]

Ok grab a brew and pull up a chair.Back in 2004 i went with a debt company that said after 5 yrs i would be bebt free aslong as i made sure the following happened.
1 ensure payments of £520 where paid ecery month without fail...........DONE
2 Not to take out any more credit and add it to the account................Done
3 Send all letters etc from the companys i owe money to on the debt managment company........done
 
Ok whats the problem I should now be debt free yes...........NO.
4yrs 7 months later the company made contact with me telling me i would not be bept free as i had put more dept on the account which i had not.Evey letter i got was sent on to the dept company and 2,3,4 and still now i get letters from companys saying they havent been payed.I have now gone with a new company in a hope to sort this problem out my next question is the first dept company have saved over £8000 of MY CASH thats should have been used to pay of my depts...
I was paying £520 per month the company would pay(when they did)no more than 150-200 per month.Does the company have to give me that £8000+ back.any advice please.

[Steven Jackson]

Hello ScouseTBE
 
Do you know for definite if you were in a debt management plan (DMP)? It sounds as though you were but the comment about being debt free in 5 years makes me wonder whether it was an IVA??
 
A debt management plan is NOT a legally binding contract with your creditors. You are still liable to pay 100% of your debt and your creditors can add additional interest and charges to your accounts at any time.
 
Given your plan was a dmp, it was absolutely wrong for the company you were working with to tell you you would be debt free in 5 years. There is no way any company can guarantee that by doing a DMP.
 
I would also assume that you were paying the debt management company a monthly management charge. At a standard rate of 15% of £520/mth, you would have paid more than £4000 in fees. I can not understand why or how the company was keeping any more then this for themselves??
 
Given my assumptions are right (sorry for all the questions), I would have thought you have a good claim against them. If you can confirm the above, I will be happy to advise further.
 
How much debt do you have now? Has the new company you are with discussed the different options with you? Have you thought about the possibility of an individual voluntary arrangement (IVA). This is a legally binding agreement and is the only way to guarantee that you would be free of your debt after five years.

[ScouseTBE]

Hi and thank you.Yes it was a dept managment plan.Its a shame i can not tell you the name of the company so you can see for yourself the promise they make and even more so to warn people off obout the company in question.I have made contact with the company and after recording the conversation i was told just to give writen notice and will take 28 days for them to send me any out standing funds i have with them.

[madison85]

least thats something, i have noticed more 'debt management companies' taking advantage from people struggling.

[Steven Jackson]

Hi ScouseTBE
 
In reality you do not even have to give written notice to a Debt Management Company. There is no formal agreement binding you to make payments so you can stop paying one company and start with another immediately with no issue.
 
The new company should even ba able to make proposals to your creditors without waiting for all the paperwork from the old company. Getting this can sometimes be a bit of a pain!!
 
By the way, there is no reason why you can not mention the name of the company you used to be with. In fact it would be useful information for people currently considering which company to choose. If you feel you want to, go ahead and let us know who it was. 

[madison85]

Hi ScouseTBE
 
In reality you do not even have to give written notice to a Debt Management Company. There is no formal agreement binding you to make payments so you can stop paying one company and start with another immediately with no issue.
 
The new company should even ba able to make proposals to your creditors without waiting for all the paperwork from the old company. Getting this can sometimes be a bit of a pain!!
 
By the way, there is no reason why you can not mention the name of the company you used to be with. In fact it would be useful information for people currently considering which company to choose. If you feel you want to, go ahead and let us know who it was.

thats really good advice, especially as the amount of Debt Management Company out there it is good to know if you pick a bad one and want to move to a more managable company.
i know someone in that situation and its great to know, thanks

[Steven Jackson]

Hi there ScouseTBE
 
How is it going with your new debt management company? Any news on whether they can put a proposal together for your creditors straight away??

[AshleyPark]

Hi ScouseTBE
 
I would guess your case is not unique! Up until a few months ago you could find an advert in the back of most newspapers that would have blurred the lines between IVA and Debt Management Plans and insinuate that in all circumstances they will write off 70/80/90% of your debt after 5 years.  If you are looking into these types of products you are more likely to deal with someone promising you the earth as opposed to a company saying they may be able to stop charges and interest.
 
This company contradict themselves in a similar way, For example;
 
An IVA would see you debt free in 5 years but this would also guarantee to stop contact from creditors as this is something they agree to as part of any IVA proposal.
 
The debt solutions industry is somewhat more compliant than 4 years ago but there are still rouge traders operating.
I would recommend speaking to at least two new companies before committing to them as both should offer the same advice and then you can decide which company to proceed with.
 
Lee

[Steven Jackson]

I know the OFT is definitely trying to clamp down on debt management firms who are misleading potential clients Lee. There was a case reported this week interestingly enough: http://www.beatmydebt.com/news-articles/oft-warns-debt-company-carefree-over-false-claims.htm
 
Hopefully they maintain this kind of pressure. However, I certainly echo your comment that anyone considering a debt management company should speak to 2 or maybe even 3 different companies. This way you can choose the one you feel most comfortable with.

[AshleyPark]

Any update ScouseTBE...

[Steven Jackson]

Hi ScounseTBE
 
Yes, any update? I would be interested to hear whether you have been returned any of your information or outstanding funds by your old company If you have not heard anthing yet, I would advise you get on the phone....