Legal financial help for paying off debt
This situation is very longwinded. I'll summarise as best as I can.
In January 1999 I received a court summons regarding a debt. Here's the
situation and a copy of the letter I sent back to the court regarding that
summons (as you are reading through this stuff - I'm sure you'll get the
gist of everything).
My letter to the court dated 13th January 1999:
Dear Sir/Madam
With reference to the form 'N9B' attached, I wish to answer the following
questions:
3. Do you dispute this claim because you have already paid it?
And,
4. If you dispute the claim for reasons other than payment, what are your
reasons?
By explanation given in this, and all other copies attached, correspondence.
I would like to note at this point, that as from 18th December, 1998, my
employment came to an end and I'm presently in the position of being
unemployed. I attended the Benefits Claim Agency and am awaiting the
results of being awarded Job Seekers Allowance, Council Tax Benefit, and
other benefits that I have claimed for.
Both my wife and I are presently unemployed and have no income, whatsoever,
from any source. I am currently seeking employment.
Please take note of my following 'Current Monthly Income and Expenditure as
of 13th January, 1999', and also my 'Current Liabilities as of 13th January
1999'.
Current Monthly Income and Expenditure as of 13th January 1999:
Income: Child Benefit @ £45.00
Expenditure:
Mortage: £260
Council Tax: £54
Water Rates: £17.76
Housekeeping: £200
Electricity: £27.35
Coal for heating: £62.50
Travel Expenses: £40
Car Tax, Insurance: £32.50
Child costs (school meals, milk, etc.): £50
Clothing and Shoes: £35
Telephone: £20
Television Licence: £9
Training for Work (IT college course): £43
Hire Purchase on Sofa: £16.41
House Insurance: £22
Pets and Insurance: £29.65
Milk, potatoes, orange juice: £30
Halifax Visa debt repayment: £18
Catalogue debt: £90
Total Expenditure Monthly = £1,054.47
Total Income Monthly = £45
Income Less Expenditure = £1,009.47 negative
There is no budget surplus available for ditrubution amongst creditors. The
budget deficiency is £1009.47.
Other Companies I Owe Money To:
Lombard Tricity Finance: £4,453.15
MBNA Visa: £2,551.37
Total: £7,004.52.
Current Liabilities as of 13th January 1999:
Halifax Visa: £862.00
Lombard Tricity Finance: £4,453.15
MBNA Visa: £2,551.37
Mortgage (house currently valued at £28,000 - negative equity): £30,000
Chartered Trust Court Summons: £3,602.04
Money Owed to Parents: £4,000
Total = £45,468.56
On the 8th March I took out a loan with Chartered Trust for a value of
£5,001.00, which had a monthly repayment of £113.99.
During June 1997, I was experiencing severe financial embarrassment and
visited the Citizens Advice bureau to request their help.
The CAB looked at my current debt situation, which was as follows:
Barclaycard visa: £754.81
Chartered Trust plc: £3,974.04
Halifax Visa: £1,186.12
Lombard Tricity Finance: £5,955.99
MBNA International Bank: £4,169.00
Total Debt: £16,039.96
The CAB wrote to all the creditors on my behalf, and it was agreed that I
would have a monthly repayment schedule as follows (from July 1997):
Barclaycard Visa: £12
Chartered Trust: £62
Halifax Visa: £18
Lombard Tricity Finance: £102
MBNA International Bank: £53.
I kept up these repayments to creditors for the course of a year. However,
due to the interest charges and other charges perpetually being incurred on
these accounts, the debt I was experiencing just kept getting worse and
worse.
I wrote to Chartered Trust (and the other ceditors) and explained my
financial postition had rapidly deteriorated and that I could not afford to
keep up the repayment of my debts. I requested the help of the CAB again,
who wrote to Chartered Trust (and other creditors) and explained the
situation, and after working out my income and expenditure with me,
requested that Chartered Trust (and others) accept an offer of £1 per month
as that was the only figure that I could possibly afford.
However, Chartered Trust was not willing to accept the offer of £1 per
month.
I requested help from my parents, who loaned me a sum of money, changed my
mortgage from an Endowment to Repayment schedule, and then cashed in the
Endowment policy, with view to paying back some of my debts.
I examined all of my debts against the amount of money that I could afford
to pay to creditors and tried to reach a decision in which to pay all the
creditors fairly. I knew that after paying them a lump sum, that it would
no longer be possible to afford to pay them any more money, as my financial
situation was extremely bad.
I worked out figures and considered that sending each company an equal
percentage (approximately 25% of the total debt with a particular
organisation) of money would be fair, and hopefully acceptable. I did
understand that the amounts I offered to each particular organisation was
not the total debt I owed to them, but I made every effort possible to pay
them as much as I possibly could with the knowledge that my present and
future finances were getting worse.
I worked out that I could afford to pay the following amounts to each
company:
Barclaycard: £174
Chartered Trust: £650
Lombard Tricity: £1,500
MBNA: £576
(I continued to pay Halifax Visa at £18 per month, as they were not
incurring interest or any other charges/penalties to this account).
With that in mind, I sent a cheque and a letter to each of the companies,
explaining the financial problems I was experiencing.
The letter that I sent to Chartered Trust contained the following text:
"...Under the circumstances, I am able to offer a payment of £650 in full
and final settlement of my total debt liability with your organisation. To
this end I have sent a cheque and hope that you will find this
acceptable..."
The cheque for the value of £650 was enclosed in the same envelope and
included the following text on the back of it:
"This cheque is in full and final settlement of any and all outstanding
monies owing to Chartered Trust by *** and ***."
After receiving a statement from my bank account, I noticed that Chartered
Trust had cashed this cheque on the 7th August 1998.
I received absolutely no communication from Chartered Trust whatsoever
before they cashed the cheque.
The first communication I had with Chartered Trust after sending them a full
and final settlement offer was a letter dated 14th August 1998, requesting
that I contact them.
I contacted Chartered Trust by telephone immediately to discuss the letter
and Chartered Trust informed me that I owed them more money and that they
were charging me £120 for additional penalties. I brought to their
attention that they had cashed the payment offer I sent them in full and
final settlement and that I couldn't understand why they were demanding more
money from me.
I was extremely concerned at Chartered Trust demanding more money from me
because I was in no position to pay them any more money because my debts
were so bad.
I telephoned a Legal Advice (Lawphone) helpline from my PetPlan insurance
policy company. A gentleman advised me (after I explained the letter and
wording on the back of the cheque that I sent with full and final settlement
offer) that if Chartered Trust weren't willing to accept the cheque as full
and final settlement that they should have returned the cheque to me and
informed me that they weren't willing to accept it. Or, that Chartered
Trust should have informed me that they would only accept the cheque as
'part payment' to another offer prior to cashing it. The gentleman advised
me to contact the Office of Fair Trading and The Trading Standards
departments, to request help in dealing with this matter. I did send a
letter to the Trading Standards and Office of Fair Trading immediately,
although the replies I received advised me to contact my CAB.
The gentleman from PetPlan informed me that Chartered Trust could possibly
take me to court but he also stated that it is to my defence that Chartered
Trust cashed the cheque when it was very clear to them that it was offered
as a full and final settlement payment.
I kept receiving letters from Chartered Trust for demands for payment, and
responded to them, in writing, by re-confirming that they had cashed a full
and final settlement payment.
On 8th October 1998, I received a Default Notice from Chartered Trust, which
I responded to in writing by re-stating my offer.
On 28th October 1998, I received a letter from Chartered Trust, which I
responded to in writing.
On 18th November 1998, I received a letter from Chartered Trust, informing
me that they were passing the matter to their legal department.
In light of the fact that I sent a letter and cheque to Chartered Trust,
which was clearly an offer for full and final settlement of the amount I
owed to them, and that Chartered Trust cashed the cheque on the 7th August,
without contacting me to advise me that they weren't willing to accept the
cheque as full and final settlement before they cashed it, I am disputing
the claim from Chartered Trust that I owe them a sum of money.
I must be totally open at this point, and admit that, due to my current
financial situation, I am very much unable to make any payments, whatsoever
to Chartered Trust. The reasons for this are clear after examination of my
Income and Expenditure form.
I am still awaiting the result of my claim for benefits from the Benefits
Agency and am making every effort possible to seek new employment. I am
currently registered with all the employment agencies in the North-East,
job-centres and looking through vacancies in the press. I have attended
some interviews, but, as yet, have been unsuccessful in seeking employment.
At the initial time of taking out the agreement with Chartered Trust, I had
no idea that I would end up in the financial circumstance of not being able
to ...
The problem (debt which can never be paid off) has been dealt with by
the invention of "bankruptcy" - which is a way of cancelling your debts.
You can apply for your own bankruptcy if that is what you want.
There are less drastic methods, which no doubt you are aware of from
your visits to Citizens Advice Bureau. But I imagine such arrangements
require the consent of all the creditors.