Getting Your Debt Written-off
We are constantly asked by clients about getting their debts written off. This is usually as a result of some advertising campaign or from being personally contacted by a firm that claims that they can write-off all or most of their debts
We wish to give you an insight into debt writing-offs to prevent you from being mislead or fooled by any company claiming that all or most loans, credit cards, overdrafts and debts that originate in a 6 year period prior to April 2007 are not enforceable and therefore can be written off.
“It’s a no-brainer,” claimed a salesman from one such company to one of our clients recently. “I will guarantee to you that we can get all your debts written off if you took the loan or card out before April 2007.”
Many such companies are charging clients around £500 for a client’s first debt and a further £100 per debt thereafter. So, for example, if you have 6 debts you could pay nearly £1,000 before that company starts work on any of your cases. But what happens if you never hear from them again or if 6 months later they inform you that there is nothing that they can do? Clearly, you will have spent all that money for no benefit.
It is evident, from what we have seen, that the claims of many such companies appear unrealistic and unachievable as they exaggerate the number of unenforceable debts that can be written off and the number of accounts that could be subject to compensation.
The Ministry of Justice, who is responsible for regulating such companies, now appears to agree and has recently issued warnings. In a statement Justice Minister, Bridget Prentice said,
“We have produced guidance to protect innocent customers from being misled by businesses advertising easy and quick arrangements for outstanding loan, credit card and other similar debts to be written off and compensation to be obtained. We would urge anyone who is considering using a business offering such services to think carefully and seek independent advice before making any final decisions.”
The suggestion that debts can be written off is naturally attractive but what you may not be made aware of is that the route to achieving this is through the litigation process and achieving success through litigation is not an exact science; it can sometimes be nearer to a lottery. Besides, this whole process can take between 12 and 24 months to complete.
You also need to be aware that with litigation there can be a downside as well as an upside. For example, it is estimated that there is little more than a 60% chance of success for even creditable cases and, should you loose the case, you could be liable for the defendant’s costs and disbursements in defending their position. These can amount to anything from £500 to £800 (plus VAT) for each side in such cases.
Even with “no win, no fee firms” where they take their fees out of any compensation won, the compensation may not be sufficient to cover all their costs in which case the claimant may be responsible for the balance. Depending upon what you are claiming for, this means that it is rarely worth undertaking this process on any account where you owe less than £2,500.
Our advice is to be very cautious and think very carefully before going down this route and always remember, “If it looks too good to be true, then it normally is!!”
If you want any further advice about getting your debts written off
, please contact your account administrator at Ashley Longmann Associates.
With best wishes
FROM THE ASHLEY LONGMANN TEAM
Labels: card debt, Debt Management, Get Out Of Debt, Getting your Debt Written Off., Personal Debt, PPI