Capitol One/Fredrickson + other debts. What to do next?

[JamesC]

Have a defaulted credit card account with Cap One (£4200 balance) which I have not paid since around Feb 2015.
Usual story - business failure, loss of income for several months, currently on low income (£670 per month), etc, etc.

In Sept 2015 Cap One wrote to say the debt would now be handled by Credit Solutions, Purley.
Received letter from them. Informed them would deal only in writing. Offered token payment of £1 per month consistent with what I am paying all other CC creditors (who all accepted). No reply from CS.

In Nov 2015 Cap One wrote to say debt would now be handled by Fredrickson.
After a week of attempted phone contact (no answers obviously), have just received first letter from them, reasonably tame.

I'm unsure as to which way to go with this debt and all the other CCs etc.

Firstly I am not worried about protecting my credit rating here - it is shot already and no doubt will remain so for a few years no matter which route I take, so that is not a deciding factor here.
I also have no intentions of taking any credit again.

For the record my full list of debts are:

Post Office Credit Card £4500 *
HBOS C Card £2100 *
New Day C Card £2100 *
Barclaycard £3600 *
Virgin CC £3500 *
Capitol One CC £4200
Barclaycard £4900 *
Tesco Loan £1700 *
Argos Card £495. *
Santander Personal Guarantee (former Ltd co. bank account) £2450
Utility Warehouse £420

Of the above all marked * are on 3-month agreed token payments of £1 per month. This agreement expires Jan 2016.
Utility Warehouse have passed to Churchill Recovery, who have also been offered £1 per month but failed to respond to letter offering this (they just persist at phone attempts to contact, despite me requesting all contact in writing - they also threatened doorstep visit, my response was to inform them that they were not permitted to set foot on my pathway and if ignoring such an instruction they would be trespassing and police would be called - they have not shown up as yet).

A couple of debts have already been declared defaulted.

My income is presently £670 per month which doesn't even cover essentials, with my wife paying a greater share of these.
It is likely that this may increase to £1200-£1500pm, but this will not be until at least 6 months (building new business).

I'm kind of torn between the following courses of action.

1) In Jan 2016 offer all creditors a further £1 per month for 6 months. Then should income increase attempt to freeze interest and agree an affordable repayment plan - i.e. pay back honestly!

2) Go Bankrupt. Not ideal. My key objective through all this would be to retain family home. After mortgage, secured loan and secured bank OD, I have approx £20k of personal equity, which my wife could possibly purchase, though funding this would be a struggle. So while an immediate solution to the backlog of debts, still a bit of a chancer as far as the house goes.

3) Do nothing, let all accounts default and see what happens. I made my previous token payment offers prior to discovering this and other forums. I'm intrigued to have since read that so many debts are not followed through to court level once passed to a DCA and never get recovered / no action taken. Is it really THAT easy? Do the DCAs really just go away once they can see blood cannot be extracted from stone?


Any advice on which way to go with this collective of debts overall?

Also how should I handle the letter from Fred ref Cap One? Ignore? Make Token Offer? Other response?


Any help appreciated.

Cheers
James

[PAWS]

Re: Capitol One/Fredrickson + other debts. What to do next?

Well James, None of it is easy!
I am sure the clever Beagles will come along with sound advice but for now I can only refer to personal experience. You know exactly what you owe which believe me is not always the case. I would advise continuing to pay them all an agreed token payment of £1. and continue to inform them this is all you can afford. It is the truth and to put it bluntly they cannot get blood out of a stone. They really should freeze all interest as soon as they know for sure you are in dire straits financially. I do not know if this will involve sending them proof of your income but that I will leave to the better informed beagles.
When we went through this, owing considerably more than you I might add, we filled in an income and expenditure form and supplied prof that our income was low. All the creditors froze the interest and although they were snotty and badgered us with letters, slapped defaults on our credit files and generally made life difficult, they continued to accept the £1 token payments for over a year. The six years do actually pass quite quickly and you do survive! If the court claims and really threatening letters start flying about you can come on here and the clever beagles will offer some very sound advice.
All I can say is that the fear of bad debt is often far worse than being clarted in it. You will get through this as many of us have and just try not to let it affect every aspect of your life.

[Kati]

Re: Capitol One/Fredrickson + other debts. What to do next?

:bump: for [MENTION=55034]nemesis45[/MENTION] xx

[nemesis45]

Re: Capitol One/Fredrickson + other debts. What to do next?

:bump: for @nemesis45 xx

Thank you [MENTION=49370]Kati[/MENTION]. nemxx

[nemesis45]

Re: Capitol One/Fredrickson + other debts. What to do next?

Good evening James, [MENTION=49370]Kati[/MENTION] has asked me to see if I can help.
In answer to question 3 no it's not that easy!
The only realistic way of tackling such a large
amount of debt would be BR but it seems not
to be possible here with a mortgage/ secured loan
and secured bank OD. What is the total of the
secured debt? How are these debts being managed?
Debt purchasers are very likely to issue CC Claims these days I'm sorry
to say even for relatively small debts of any type.

Dealing with each debt will be a prolonged effort, the
course of action would be to write to each creditor asking
them to freeze all charges and interest to give a chance to
reduce the balances.
I would treat the Capone account the same way.
The one possible difficult matter may be the personal
guarantee Satans bank is not the most cooperative organisation.
what is the status of this at present.
nem

[JamesC]

Re: Capitol One/Fredrickson + other debts. What to do next?

Thank you for replying. TO clarify:-

Secured debt is as follows:
£53000 mortgage
£22000 secured loan GE money
£24000 secured overdraft
Am up to date with all payments to secured lending and will continue to be so.
Property value approx £140,000

Santander PG - have not dealt with this yet. The Ltd Co of which I was a director has only just been dissolved and the bank has not yet been advised, so this one has not yet come to the surface.
I managed to get all lenders marked * above to freeze interest and accept £1 per month for a three month period.

My next plan of action would probably be to attempt to stretch this out for another period, to allow me time to rebuild my financial situation, regain decent income (which cannot be achieved overnight), and then put forward a realistic settlement proposal (sans interest if possible).
Is my best option to attempt to deal with the original creditors, or to allow them to sell the debts on?
I've read so much contradictory information online and some of the claims that creditors will simply " go away" once the debt has been passed between a few DCAs, seem VERY hard to believe (backed up with few success stories as far as I can see). I'm not necessarily looking for a "get out of jail free" card but do need to find a manageable way forwards if possible.
What I'm looking for here is honest and realistic advice, having read so much "advice" elsewhere that simply sounds too good to be true...

Any help appreciated.

[Debt Camel]

Re: Capitol One/Fredrickson + other debts. What to do next?

I'm intrigued to have since read that so many debts are not followed through to court level once passed to a DCA and never get recovered / no action taken. Is it really THAT easy? Do the DCAs really just go away once they can see blood cannot be extracted from stone?

No it certainly isn't that easy. There is a lot of rubbish around on the internet. things which sound to good to be true usually are.

The problem here is that there is - from an individual creditors point of view - plenty of blood left in your stone because you have a house with equity. The chance of them writing you the odd cross letter for a few years then giving up and the debts becoming statute barred are very slim. You have 11 debts there, you will be lucky if this happens with 1 or 2 of them, and they will probably be small ones

You need a way forward which doesn't rely on this.

Bankruptcy is indeed one option.

Can you give some more information about the secured debts. I assume the house is in joint names as you say you have c 20k of equity. Are all the secured debts in joint names? Is the mortgage repayment or interest only? What interest rates are you paying on each of them?

How old are you? Do you have any pension provisions?

You say it would be hard for your wife purchase 20k of equity but it may be possible - how would she do this?

Another option would be to sell the house and offer full and final settlements to your debts from your half of the equity. So you would end up with a poor credit record but no bankruptcy.

In the meanwhile I suggest you offer a token payment to Fredricksons.