Author Topic: Trapped into Payday Loans and Premium Rate Text Message Services  (Read 1459 times)

paydaydebt

  • *
  • Posts: 2
Hi Everyone,

I am wondering whether anyone else got into a situation like me. Some of us experienced the trap of the payday loan companies who charge 25-30% interest. I just earn a bit more than the national minimum, around 14k a year. And now the time has come. I found myself in a £3700 worth payday trap right now if I paid it in full straight away. I launched a debt management plan for this, but cannot trust the positive outcome of this action. I feel that this is right start in case one of these companies goes to the court against me.
The other thing is that I ran into premium charged text message services. These services can boost up your phone bill if you have a pay monthly phone. I had 3 monthly paid mobile and got a phone bill of £700-1000 per each. Having not paid them they have been disconnected and generated a high final bill with those mobile providers. This is around £3500 outstanding now but I paid a part of it when I was in a better situation. They would also like to increase this amount by 15% or so because the line payment I agreed with them has come to the end and the providers cancelled the contracts.
I would like to ask what the best solution would be for me of this 7,5k worth issue, if anyone can help. Is it the DMP or IVA? Or any other debt solution?

James Falla

  • Hero Member
  • *****
  • Posts: 655
Re: Trapped into Payday Loans and Premium Rate Text Message Services
« Reply #1 on: Nov 30, 2010, 11:38:22 AM »
Hello paydaydebt
 
Sorry to hear about your situation. Given that you owe £7500, a debt management plan could well be a good solutionf for you. Are you currently working with a debt management company or trying to negotiate this yourself?
 
What do you think you can afford to pay to your creditors in total each month? If you can not afford to pay £100 a month or more towards your debt, the problem with a debt management plan is that it will take you a very long time to pay off everything. The alternative solution for you in this situation could be a debt relief order.
 
Let us know how you get on and if you need more help.
Debt Expert & Author
beatmydebt.com

paydaydebt

  • *
  • Posts: 2
Re: Trapped into Payday Loans and Premium Rate Text Message Services
« Reply #2 on: Dec 02, 2010, 08:42:22 AM »
Thank you James for answering.
I have already signed up to a company who deals with DMP. The monthly payments would be 200 pounds I can easily afford. Otherwise I wouldn't have enough money to live on. I still can't beleive that this plan is working. Two of my creditors sent me letters saying that I passed the due date and they raised the amount and I suppose they will not stop doing this as time passes by. What happens if they go to the court?
Can I ask the court to arrange an affordable payment to everyone I owe? It is around 10 companies.
Is my job affected in this case? I mean whether the bosses would got to know about these money problems or not.

Can I ask about the Debt Relief Order? How does this work? Is it really possible just to write the debts off without paying?
Sorry for the lot of questions. But this information would be useful not just for me but anyone else.

James Falla

  • Hero Member
  • *****
  • Posts: 655
Re: Trapped into Payday Loans and Premium Rate Text Message Services
« Reply #3 on: Dec 02, 2010, 12:11:01 PM »
Hi there paydaydebt,
 
How long have you been paying into your debt management plan? It normally takes 3 or so months for the creditors to accept the reduced payment proposal, register the payments and update their systems. Once this happens you should get less hassle. So if you have only just started, my advice is hang on in there. At £200 a month your debt should be paid in just over 3 years so I think you are on the right track with the DMP.
 
The court can offer help to people who owe less than £5000 in the form of an administration order. However, unfortunately because you owe c£7500 you are not eligable for this. However a Debt Relief Order could help you. This is a similar procedure to bankruptcy but designed for people who have debts lower than £15,000 and allows debt to be written off (in the same way as bankruptcy). However, you are only eligable for this if your disposable income is less than £50 a month. Given you can pay £200 you might not fit inton this catagory but it is worth a look.
Debt Expert & Author
beatmydebt.com