1st Credit bankruptcy threat?

[DrivingMissDaisy]

Hi All,

Can you help me? I have a credit card debt of £5855 with HSBC which I ceased paying and went into arrears around 4 years ago.

I have recieved various letters advising further action, however on 30 October, the letters got more serious. They have stated that they know that I am a homeowner (I am) and that they are going to refer the account to their internal legal department who will "consider initiating bankruptcy proceedings".

They have given me 10 days to respond, if I dont respond, then the account will be passed to their internal legal department without further notice.

So, ideally, I was hoping to make it past the 6 year mark and not acknowledge the debt. However, I cant run the risk of them bankrupting me and losing the house, its not worth it.

That said, I am a single parent and I will struggle to pay any amount back. What do you think the best course of action would be? Do you have any advice? Am hoping that I can somehow delay them and keep them stalling for 2 more years, is that reasonble or really risky?

I have been given advice that has suggested that I make them an offer of around 10% of the balance in order to clear it - does that work? I could potentially do that in the new year.

Any advice around tactics of either 1) avoiding the debt altogether or 2) paying it back at a reduced amount would be grateful.

I really dont want to go into a million year payment plan for a £10 a month that needs to be revisited every 3 months..... its just too hard and depressing.

Any advice that you have gratefully received. Thank you and I hope I dont sound to cheeky xxxxx

[warwick65]

Re: 1st Credit bankruptcy threat?

Hi
The threat of issuing a statutory demand is really quite serious and does have some major implications so you do need to act. I believe 1st credit were in trouble a few years ago ( along with Lowell) for using SDs as a debt collection tool.

However, have you ever sent a S78 request to either HSBC or 1st Credit?

I am not comfortable telling you how to avoid the debt ( even if i knew) but i am ok with telling you you should use the consumer credit act etc to make sure your rights are upheld.

Why is a repayment plan of £10 a month so hard and depressing, if it is affordable just set up a standing order and leave it, when they ask for an I&E just use the last one and tweak it.

However I do think the first thing to do is to send a S78 request to 1st Credit.

BTW when was the card opened ?
[MENTION=87380]Diana M[/MENTION] [MENTION=6]Amethyst[/MENTION]

any thoughts

[nemesis45]

Re: 1st Credit bankruptcy threat?

Hi, 1st Credit has used BR SD's in the past just as a threat without any intention of following through.

Have you sent them a request for an agreement for this account? If not do so now by signed for post.

You can pee on their fireworks if you admit the debt and want to pay by making a payment to bring the debt below the £5K BR threshold.

nem

[DrivingMissDaisy]

Re: 1st Credit bankruptcy threat?

Hi Diana,

Many thanks for your considered response. Im not sure when it was opened. A long time ago. Maybe as far back as early 00s. I never missed a payment and the repayments were around £300 a month.

I havent sent a Section 78 request before, I dont know what one is, what does this do?

I think re the repayment plan, from past experience, they were really forensic, and I felt like I was having to justify every penny, and it happened so regularly it was a real cloud over my head. Then every 3 months there would be a game of telephone tag as they tried to contact me/I tried to contact them to spend another hour on the phone. I might sound mean but I work FT am a single parent with a young daughter and I dont have much time on my hands.

I dont necessarily want to avoid the bedt - my preferred option would be to have a negotiation process to pay off a reduced sum.

I do feel a bit cheated (as possibly a bit naieve) as the reality is that they just crept up the credit alowance month on month. I had a really good salary so I didnt notice it and then I was made redundant and had to move back up north from London and there just arent the same job opportunities, or salaries plus I am now a single parent so am just not in a position to make the repayments and the amount seems sooooo much! I cant believe anyone would give me that much debt. Different circumstances I guess it never seemed a lot but it sure does now!

Hope that explains where I am up to a bit more.

[MIKE770]

Re: 1st Credit bankruptcy threat?

CCA Request Letter

[Diana M]

Re: 1st Credit bankruptcy threat?

As Warwick says send a s 77 - 79 CCA Request to 1st Credit asap because the debt will become unenforceable in court unless or until they comply with it. This forum has a template for that here >

http://legalbeagles.info/library/gui...etter-example/

1st Credit was sanctioned by the OFT in 2009 for using Statutory Demands (the start of the bankruptcy process) as a debt collection tool. Sadly we're aware that they have recently begun to do it again.

This was the OFT sanction >

http://webarchive.nationalarchives.g...ess/2009/20-09

Di

[DrivingMissDaisy]

Re: 1st Credit bankruptcy threat?

Hi Nem, thanks for the response.

Whats a request for an agreement? Is that a Section 78?

Also, the debt is only 5885 - so does that mean that they cant persue BR proceedings? Its well under £35k

Am interested in how much substance there are to these threats and how likely they are to follow through - but I cant risk losing my house!

[warwick65]

Re: 1st Credit bankruptcy threat?

Hi

Last time I looked I wasn't Diana M I tagged her in case she could give you some good advice.

A CCA (S78 request) is a request for documents and if they can not provide them they would struggle to enforce the debt.

You send the CCA request along with a cheque or postal order for £1 to 1st Credit . I would send it by Royal mail signed for and keep copies of the letter, the means of payment, the receipt from the post office and when it has been derived a copy of the proof of delivery.
Its always good to be able to prove what you have done.

As the debt was quite possibly from before April 2007 they need to provide the documents that contain all the prescribed terms and it is quite possible it will be more difficult to get because of the age of the debt.

If they do issue a SD while the CCA request is outstanding , I am sure diana's firm would be able to quickly sweep that away as long as you acted swiftly . There are , of course other firms who deal with consumer credit but non that I know of who have the same level of input on this forum .

- - - Updated - - -

Hi Nem, thanks for the response.

Whats a request for an agreement? Is that a Section 78?

Also, the debt is only 5885 - so does that mean that they cant persue BR proceedings? Its well under £35k

Am interested in how much substance there are to these threats and how likely they are to follow through - but I cant risk losing my house!

Maybe nem was having a senior moment or their finger slipped - the threshold for BR is £5K however at the moment you are 4 years in without making a payment of acknowledgment so any payment would reset the SB 'clock'

[Diana M]

Re: 1st Credit bankruptcy threat?

I have a credit card debt of £5855 with HSBC which I ceased paying and went into arrears around 4 years ago.

. . . . They have stated that they know that I am a homeowner (I am) and that they are going to refer the account to their internal legal department who will "consider initiating bankruptcy proceedings".

. . . . hoping to make it past the 6 year mark and not acknowledge the debt. However, I cant run the risk of them bankrupting me and losing the house

Sending a s 77 - 79 CCA Request does not acknowledge the debt so won't be an issue with Statute Barred. Do that first and then decided your next step when you hear back from them.

They will probably have to ask HSBC for credit agreement which will take time.

You can send a Subject Access Request to HSBC to get the full history of the account. That way you'll see for yourself what information they have in their files. If the credit agreement isn't there then 1st Credit won't be able to get it from them.

The SAR should also confirm when you made your last payment so you can assess when the debt is likely to become Statute Barred.

It's not only the credit agreement which is needed to enforce a debt in court. There are other legal hoops for the debt owner to jump through.

Did you have PPI on the account?

Was the credit card the only financial product you had with HSBC or was there a current account overdraft and/or a loan? HSBC have a habit of bundling all negative balances together before selling them on which can make things more difficult for them if they decide to litigate.

Those letters are designed to intimidate. Once you take control of the situation (send a s 77-79 CCA Request) then you'll feel less worried.

Di

[Diana M]

Re: 1st Credit bankruptcy threat?

the debt is only 5885 - so does that mean that they cant persue BR proceedings? Its well under £35k

Just to clarify, you cannot be made bankrupt for debts of less than £5k not £35k >

https://www.gov.uk/apply-to-bankrupt...d-5000-or-more

In your situation (the debt is over £5k) 1st Credit could serve you with a Statutory Demand but you could make an Application for it to be set aside if they haven't complied with your s 77 - 79 CCA Request.

In our experience they then tend to issue county court proceedings instead but they will have some difficulty with winning if they haven't complied with your CCA Request.

Di

[DrivingMissDaisy]

Re: 1st Credit bankruptcy threat?

Hello, thank you for all your advice and help. :-) :-)

I will request a Section 78 and I will also ask for a copy of my file from HSBC. In answer to some of the other questions, no, I didnt have PPI on the account. I am pretty sure that was around the balance so I am also pretty certain that it the correct amount of debt and it doesnt include anything else.

However, alongside that I did have a paid for Premium Bank Account that the CC was "upgraded" from to a HSBC Gold Credit card. That Bank Account, I did contest the signing up process, and initially they refused any responsibility (they didnt sign me up without properly explaining the features) but I left it at that. Then about a year ago they called me to say that they had conducted an internal review of their files and decided that it had been missold and they gave me around £200 back in fees. I dont know if this relevant or not. Honestly, HSBC have had a good run out me. I opened my bank account with them in 1994 and paid all my overdraft fees, overcredit fees, and every other constant charge that they charge me until I got wise and moved all my accounts from them. I am with the Halifax now and they are brilliant!

Ok, back to the matter at hand, I will do those things, just before I make a decision about how to proceed..... if they did go ahead and issue a statutory demand... Diana, how confident are you that you would be able to put it aside to ensure no BR? Im not so bothered about a CCJ, I dont want more credit, I own my own home... inconvenient but not a huge issue.

However, if there really is even a small chance that whilst the S78 was being complied with I could lose my house.... Ill probably have to go back to the payment plan option. Just cant risk it.

I realise that that is a difficult thing to quantify without knowing every details, and that this isnt legal advice but your thoughts would be appreciated.

Emma xxx

PS Warick - sorry am not very au fait with forums, I get it now ;-)

[warwick65]

Re: 1st Credit bankruptcy threat?

PS Warick - sorry am not very au fait with forums, I get it now ;-)

I was taking the P- If you stick around your will get used to it.