Problems with Halifax

[Spellkaster]

I have 2 debts with Halifax.

I applied online for a credit card in September 2006. They agreed to set a limit of £1000 which I was happy with.

In time, the credit card limit soared to nearly £9K. It was raised automatically each time the card was used and payments made.

By June 2012, there is a debt on the card of £3192.

In December 2011, I applied for a loan online and they gave me £7K.

I made 5 payments before falling into difficulty.

I need to ask; each time Halifax gave me credit, they did not ask me for proof of income and did not ask me anything about affordablity.

I was not asked to show my benefit entitlement.

I have gone through the Lending Code and I feel Halifax has breached the Lending Code on a number of grounds.

Although I have a complaint regarding this with the Financial Ombudsman Service, I dont know what the outcome yet will be.

I have no more money to pay the debts off, I was in an IVA with Debt Free Direct but its failed because they wanted more and more money off me which I could not afford.

Is it worth writing a letter requesting that they write off the balance due to my circumstance?

I am registered disabled due to health problems, I was under treatment for mental health problems when the credits were given which I have told the FOS about.

Any help please thank you.

[FlamingParrot]

Re: Problems with Halifax

I have 2 debts with Halifax.

I applied online for a credit card in September 2006. They agreed to set a limit of £1000 which I was happy with.

In time, the credit card limit soared to nearly £9K. It was raised automatically each time the card was used and payments made.

This was very common, most credit card providers raised the limit automatically, they did the same with me. I don't think there's anything unlawful about that though.

By June 2012, there is a debt on the card of £3192.

In December 2011, I applied for a loan online and they gave me £7K.

I made 5 payments before falling into difficulty.

I need to ask; each time Halifax gave me credit, they did not ask me for proof of income and did not ask me anything about affordability.

While that was almost the norm in 2006, I'd have thought things would have changed by 2011, given the events of 2008, the credit crunch and all that... :confused2:

I was not asked to show my benefit entitlement.

I have gone through the Lending Code and I feel Halifax has breached the Lending Code on a number of grounds.

Can you tell us a bit more? On what grounds you think they've breached it?

[FlamingParrot]

Re: Problems with Halifax

Although I have a complaint regarding this with the Financial Ombudsman Service, I dont know what the outcome yet will be.

I have no more money to pay the debts off, I was in an IVA with Debt Free Direct but its failed because they wanted more and more money off me which I could not afford.

Is it worth writing a letter requesting that they write off the balance due to my circumstance?

I am registered disabled due to health problems, I was under treatment for mental health problems when the credits were given which I have told the FOS about.

Any help please thank you.

It certainly is worth trying. You'll need to produce an income and statement form to start with, showing you haven't got any money available to make repayments and that this situation isn't likely to change in the future. A good online tool to prepare your statement can be found here: https://nedcab.cabmoney.org.uk/quickfs.asp. You may need to explain certain expenses related to your disability or health.

There are two concurrent issues here, one is your circumstances, which are not the fault or responsibility of the bank, the other is your complaint against them. I'd say you should start by explaining your circumstances, along with your income and expenditure form. Presumably you are in receipt of benefits and allowances such as ESA/DLA (or PIP as is called now). Creditors are understandably reluctant to write off debts so you may need to provide detailed information about your disability and other health issues.

Any further steps you take will depend on their response. I'd probably refrain from mentioning the Lending Code or irresponsible lending, etc. at this stage and only bring it up if their response and/or further action merits it in the future.

An example letter is below.

Dear sirs

Account No: xxxxxxxxxx

I am writing to you because I am in financial difficulties. I enclose a copy of my budget sheet which gives details of my present financial circumstances. As you can see, my outgoings are more than my income and I am experiencing extreme financial hardship.

I would be very grateful if you would consider writing off the outstanding debt owing. I have always taken my financial responsibilities very seriously but unfortunately, my circumstances are so bad that I cannot realistically maintain payments of any kind. Please take the following special information into account when making your decision.

[EXPLAIN YOUR CIRCUMSTANCES HERE, INCLUDING ANY MEDICAL EVIDENCE YOU ARE ABLE TO SUPPLY]

As you can see, my situation is very unlikely to improve in the future, and my continued high debt level may have a serious effect on my physical and mental well-being. I would therefore be grateful if you would seriously consider this request for the debt to be written off.

I would appreciate any help you can offer me right now.

I look forward to hearing from you.

Yours faithfully

[Spellkaster]

Re: Problems with Halifax

It certainly is worth trying. You'll need to produce an income and statement form to start with, showing you haven't got any money available to make repayments and that this situation isn't likely to change in the future. A good online tool to prepare your statement can be found here: https://nedcab.cabmoney.org.uk/quickfs.asp. You may need to explain certain expenses related to your disability or health.

There are two concurrent issues here, one is your circumstances, which are not the fault or responsibility of the bank, the other is your complaint against them. I'd say you should start by explaining your circumstances, along with your income and expenditure form. Presumably you are in receipt of benefits and allowances such as ESA/DLA (or PIP as is called now). Creditors are understandably reluctant to write off debts so you may need to provide detailed information about your disability and other health issues.

Any further steps you take will depend on their response. I'd probably refrain from mentioning the Lending Code or irresponsible lending, etc. at this stage and only bring it up if their response and/or further action merits it in the future.

An example letter is below.

Thank you for the advice.

I have mental health issues and am on very high medication. I also have a heart condition which is made worse by an under active thyroid.

I receive cont based esa support group of £108 per week and middle rate care dla and higher rate mobility dla.

I always disregard the DLA because this money is for healthcare costs and not used to pay off creditors.

Halifax are well aware of my issues when I complained to them recently.

When they responded with their letter, they have refused to accept responsiblity for lending me money I could not pay back.

In the Lending Code it clearly states in their on multiple times that lenders must base their lending on affordability and the person being able to pay the money back.

They did not ask me any questions regarding what was the loan for, what my benefit entitlement was, nothing.

Halifax said in their letter that I need to seek another debt solution ie a debt relief order.

Why should I undertake another form of debt solution when one has already failed, and the fact another debt solution would cause me further problems?

They have got a bloody cheek and I told this to the Financial Ombudsman Service.

I have given the FOS a copy of my repeat perscription, and a copy of a letter from the psychiatrist outlining my problems when they lent me credit.

As I was a vulnerable adult, they should not have lent to me in the first place.

[FlamingParrot]

Re: Problems with Halifax

I know where you're coming from, however, it can be hard to argue irresponsible lending and it may be better to try and convince them that your circumstances mean you won't be able to repay this debt rather than arguing about their having lent you the money. :thumb:

DLA is not to pay creditors, the reason I mentioned it is because it shows you have a disability that's officially recognised.

A debt relief order would be of little benefit to the Halifax because your debts will be written off, that's the whole idea, to get RELIEF from your debts. However, it is an option you could consider if you meet the requirements:

• Your debts should be less than £15,000 at the time the application is approved.
• You should not be a home owner.
• The total value of your assets (excluding a car or motor bike) should be less than £300. Lots of basic household items such as cutlery, crockery, cookers, televisions, beds or
  furniture do not count as assets. The value of your assets is calculated based on resale value, not how much the item was worth when you bought it, unless it is brand new.
• The value of your car or motor bike should not exceed £1,000 although an exception can be made if it has been adapted due to a disability.
• Your spare monthly income after normal household expenses should be less than £50 a month

A DRO is a form of insolvency like bankruptcy, but it's a lot cheaper to apply for.
You can only apply for a DRO through an approved intermediary such as the CAB, Stepchange or National Debtline, who will advise you, check your eligibility and apply on your behalf. Your application is sent directly to the Insolvency Service without a court hearing.

[Spellkaster]

Re: Problems with Halifax

I know where you're coming from, however, it can be hard to argue irresponsible lending and it may be better to try and convince them that your circumstances mean you won't be able to repay this debt rather than arguing about their having lent you the money. :thumb:

DLA is not to pay creditors, the reason I mentioned it is because it shows you have a disability that's officially recognised.

A debt relief order would be of little benefit to the Halifax because your debts will be written off, that's the whole idea, to get RELIEF from your debts. However, it is an option you could consider if you meet the requirements:

• Your debts should be less than £15,000 at the time the application is approved.
• You should not be a home owner.
• The total value of your assets (excluding a car or motor bike) should be less than £300. Lots of basic household items such as cutlery, crockery, cookers, televisions, beds or
  furniture do not count as assets. The value of your assets is calculated based on resale value, not how much the item was worth when you bought it, unless it is brand new.
• The value of your car or motor bike should not exceed £1,000 although an exception can be made if it has been adapted due to a disability.
• Your spare monthly income after normal household expenses should be less than £50 a month

A DRO is a form of insolvency like bankruptcy, but it's a lot cheaper to apply for.
You can only apply for a DRO through an approved intermediary such as the CAB, Stepchange or National Debtline, who will advise you, check your eligibility and apply on your behalf. Your application is sent directly to the Insolvency Service without a court hearing.

I spoke at length to National Debtline end of July 2014 and they said I qualified for a DRO and that they do disregard dla as income.

I have stated to the Financial Ombudsman Service as part of my complaint that I cannot repay the money back as I feel that they breached the Lending Code because I feel that they did not assess me properly for credit.

The fact that I was not asked for proof of income, benefit entitlement, and what other financial commitments I had at the time of being given the loan.

The fact that Halifax have refused to write the debt off is also a concern, I don't see why I should apply for a DRO because this means I cant get any credit and my credit report will be virtually 0.

I also object to getting another form of debt remedy because Halifax are refusing responsibility of lending money to someone who was unsuitable, if they can't accept responsibility that their lending has caused someone financial hardship then they have no business in being a bank!!

I am not hopefuly regarding the FOS but at least I know that they are taking my complaints seriously.