Hi. Shoosmiths debt letter help

[alanattees]

Hello. I have recently received a letter from Shoosmiths regarding in relation to Arrow Global ltd for a mortgage debt of £15,000. I have for the last ten years or so been making payments of £5 a month but now they have asked for these payments to be made direct to them, they have sent me a direct debit form but also sent me an income and expenditure form which is the first time I’ve received one of these since I started paying the debt.
I’m working part time, take home pay just under £1000 a month and after I’ve paid debts including rent, council tax, direct debits etc I have about £250 a month left to live on.
I have no assets, but I do have about £6000 in savings left from a redundancy payment of £14000 that I received in May. I’m using these savings at £300 a month to help me live.
Is it possible Shoosmiths will ask me to increase my payments, (I know I’ve had a pretty easy run the last 10 years) but I would struggle to increase payments especially when my savings have gone.
I’m also loath to make them a one off payment, which they have suggested, unless the payment request was quite low.
Ultimately would they apply for an attachment of earnings if we fail to come to an agreement?
thanks.

[Amethyst]

When you say a mortgage debt - is this a shortfall from when your house was repossessed or sold in negative equity ?

Is there a court judgment in place ? and are the £5 monthly payments set by the court ?

You might well be able to settle the debt for the £6k you have, particularly as it's been sold on to a debt purchaser, so if you wanted to go that route and this be out of your hair completely it might be worth considering, but of course that depends on the status of the debt and your circumstances.

Are you getting all benefits you're entitled to? help with CT/Housing etc?

[alanattees]

Hi. The debt is a result of a repossession of my former property over 20 years ago. As far as I’m aware this wasn’t set up by the county court but by the firm who originally bought the debt.
Im not keen at all on paying them 6k, although I would consider a payment for what they actually bought the debt for. For example under £1000.
I’m 50 years old now, will never be looking to get another mortgage, don’t believe in getting things on finance so if I was to receive a CCJ I can’t really see how it would affect me.
im looking to apply for universal credit soon due to my savings diminishing and could receive upto £60 a month which would take my total take home pay to about £1030 per calendar month.
Thanks

[Amethyst]

Okay, Are Shoosmiths threatening court action ? ( if the debt is still at £15k then it's likely to have been purchased for £1500 so more realistically settlement at £2k-£3k might be possible )
It doesn't sound like your income and expenditure sheet would show much more than your current payment is available for this debt - you could complete it ( worth getting help from Stepchange or CAB as they have access to the 'trigger figures' to say what you should be spending on food and household etc on top of rent/CT etc ) and see what your pro-rata payments would work out at before you go back to them with an offer. If it did go to a CCJ the court might order more as a monthly instalment than you could negotiate directly ( their income expenditure sheets are less generous than the SFS ( standard financial statement ) that the debt agencies use )

[alanattees]

Thanks. I’ll contact CAB. I haven’t been threatened with court action yet. This is the first letter I’ve had regarding the debt in ten years. Can I buy time with responding, for example do I have a certain amount of time to respond before they start asking for the form to be returned?

[Amethyst]

Do they give you a deadline in their letter? ( normally something like 14 or 30 days ? ) or is it simply a 'our client now owns the debt, change your DD payment, and fill in the IE sheet' letter.

[alanattees]

The letter states the latter. It doesn’t have a deadline. Just asks me to change the direct debit so that it’s paid to them and complete the income and expenditure firm.

[Amethyst]

Okay, just a 'hello' letter then. If you are happy that the debt has been sold to Arrow and they are collecting on it now you can change your DD over to the new details, save it being returned by the lender. Then get your IE sheet updated and reply to Shoosmiths with that and your updated offer ( even if it remains at £5 a month or even reduces ).

[alanattees]

Thanks for your advice