Arrears on loan

[horselady]

We have had some financial problems lately and have had to make arrangements with our creditors. Everything seemed to be OK but one loan company (Lombard) who we arranged to pay at �250 per month have sent a default notice saying they want �1, 600 arrears by 26 May or they will call in the remaining �15,000 owed. If we could find �1,600 within 14 days we wouldn't be in a mess. My husband has gone to work in complete despair. Why do we get told again and again to approach our creditors immediately if we have a problem abd then they do this. We have kept up the �250 arrangement without fail.

[andy-hughes]

This is probably a computer generated letter. The system may not have logged your payments, whcih will automatically generate a default letter demanding the whole payment.

This is the equivalent of putting a ferret down a rabbit hole - it's designed to get you to react, and contact the company.

Rest assured, any finance company is far keener to set up a payment arrangement, which gets their money back to them, than take you to court, which is time-consuming and expensive, and may not result in repayment.

So, if you have an arrangement in place, you have nothing to panic over. Contact the company by phone and advise them that you are making payments. Follow this up with a leter by Registered Post advising the arrangement terms, and that you have not defaulted, and ask them to respond in writing. Keep copies of all letters tol and from the company.

Don't worry, this is simply a standard proceedure for a credit company, it is scary, but it is designed to make the majority of customers, who ignore polite requests, to get something sorted. Sadly, you have been caught up in their system, but it is easily rectified.

Have a good day, and don;t worry!

[purplelily]

Hi horselady, sorry to hear of your troubles. I was in a similar situation a few years back, and I know it can be really frustrating. First of all, make sure you carry on paying the �250 per month as you have been - that's really important. Telephone Lombard and explain that �250 is the absolute maximum you can afford each month. If they still try to threaten you with legal action, speak to your local CAB - I'm sure they'll be able to help, and they may even get Lombard to take the interest off the payments (Barclaycard stopped charging me interest when I was having my troubles). Failing all this, there's a free government scheme (sorry, can't think of the name of it offhand, but I'll do a search in a tic) that can help you deal with your creditors if you owe more than �15,000. I wish you all the very best. x.

[horselady]

Andy thank you so much for your reply. You have made me feel a lot better, the look on my husband's face scared me, he looked stricken, he's out on the road all day and I didn't like him going like that. I will make sure we contact the company and put things straight. Thanks again for your response and good wishes.

[horselady]

Thank you purplelily, it's nice knowing that we're not the only ones that can get into a sticky situation.

[andy-hughes]

You are most welcome. I know companies have to get debt payment moving, but this sledgehammer approach, especially to people like yourself who have already put repayment proposals in place, is really scary, and infair. Still, hopefully you will have everyone communicating in a few days, and things will settle down. Glad to help!

A.