Crediting account to reduce DD

Sound and very understanding advice. 

As a general rule if you are in debt to any company or financial institution if you engage with them with any form of communication then it is far more likely you will be able to come to a mutually satisfactory arrangement to manage any debt or Direct Debit commitment.

Many decades ago (September 1992) I lost all my contract work (Black Wednesday) and I was in my weakest financial position having used practically all my savings to move up in the housing market. I immediately wrote to all the places I had DDs with and told them the full situation and they all wrote back to say they understood that payments may fail but to keep them informed as to my situation and they would hold off from any actions to recover debt. The council wrote back and gave me a list of all the free services I could access, gave me a discount on my Council Tax and even set up payments for part of my mortgage which happened to be a thing then even though I was self employed at the time.

So the rule is, speak to companies sooner rather than later if you have any kind of financial difficulties. I think you'll be surprised how helpful they will be and I think this is because so many people get into debt without saying anything and then it is so much more difficult to manage the situation at that point. It might seem embarrassing to say that you have somehow ‘failed’, but companies do want to help out before it gets too bad.

Peter

PS The story ended well. With the help I did get from various sources and cutting back spending (with a family of three children) we actually made all of the DD payments on time with not a lot of debt and cleared it all up inside a couple of years. One lesson we learnt was that we had been buying a lot of things and holidays we didn't actually need and a lot of services with much cheaper options and it worked out well in the end.

Hey ​@Kall 

That’s very kind of you. I can see you’ve already had some really helpful advice from our community members. I just wanted to add the following topics which may be helpful to your friend:

Thanks for your replies.

​@Blastoise186 Yes he has already spoken to the collections team to come up with the current arrangement IE DD to include repayment. It's just that what was never discussed was DD reduction if extra is paid as and when extra money is available. We will call collections and see what they say. Cheers

Gotcha, what I do know is that making additional payments over and above what’s agreed is totally allowed and will absolutely reduce the balance owed. Given that you’ve probably agreed a timeline for paying everything off, that’s what I’d say would allow you to re-negotiate if you wanted to keep the target date the same.

If you need our advice any further, let us know - we’ve got at least one Forum Volunteer who can help with debt related matters. Just ask! :)

I just wanted to update this post so others will find it in the search if necessary.

​@Blastoise186 I called the 0800 number you gave and they said they will most certainly renegotiate and lower the monthly DD. First however it's necessary obviously to pay some of the debt/top up the account - and then call them to discuss it and have it lowered.

This ought to me made more widely known, as it is a valuable piece of knowledge, especially with the demise of winter heating allowance and the cost of living crisis. Well done OVO and Kall for posting it here.