EGG and defaults

[surycts7]

Hopefully someone can offer some advice .
I had a loan thru EGG .4 years ago i contacted them to say that due to the credit crunch business was going from bad to worst and that i may be in a position that i would struggle to pay the monthly amount .
I was told that in order to alter the monthly amount i would first have to miss a number of payments and default on the agreement only then would they put me in touch with their debt management department.
This is what happend and i now have a default showing on my credit file .
The debt was sold on to Global arrow /RMA but the monthly reduced amount stayed the same .
the more i think about this the more annoyed i get but what i need to know is if the ombudsman would look favouriably on getting this removed as i was proactive did all the contact your lender stuff and still ended up with a default .
any advice would be appriciated

[Never-In-Doubt]

Re: EGG and defaults

Sadly, as the facts of events are accurate, ie you missed payments hence got defaulted there is little that can be done.

The problem you have is that the FOS have little say regards default entries, this would usually be an ICO issue however as a result of the facts being accurate, they can (and do) default you. Not much you can really do unless you had a recording of the call that proves they (the bank) suggested you miss payments - even so, as Citi was sold off to Opus the odds of any internal call recording is very slim.

Sadly, your hands are tied on this one. A FOS complaint may help get you a few quid compo, but not default removal. Opus will never just remove a default - I fought them myself and won, via the FOS, but that was 100% their fault - after 5 warnings from the FOS to remove the default, they eventually did so. Point is, they paid me £450 or whatever months before the default was removed.... you can read my story here ---> http://forums.all-about-debt.co.uk/s...ead.php?t=1861

Can you confirm the actual date of default and is it your only default?

[SXGuy]

Re: EGG and defaults

sorry to say, that a lot of credit cards advise people to miss a payment and get defaulted before they will do anything to help with the repayments. Its not fair in my opinion, but they do it.

[mgfboy]

Re: EGG and defaults

The credit files are the best weapon the financial sector and DCAs have against the consumer because even when they can't collect the debt, they can still record defaults, and it seems there are lots of guidelines but no hard and fast rules.

This weapon is only as powerful as we want it to be, the more people are concerned about their credit record the more effective it becomes.

Anything other than keeping up contractual payments would constitute a default even if the creditor agreed to reduced payments, if you can't pay they can't force you to pay (not even via court) so they use their last weapon which is the credit record.

I'm not sure about the comment it's only as powerful as we want it to be!!! Most people do need credit of some kind at some time so it is powerful in it's own right and shouldn't be ignored, all actions have effects the power comes from understanding those.

[mgfboy]

Re: EGG and defaults

Of course, but if you are not able to keep up payments there's not much you can do to avoid a default, is there? Other than resort to solutions that could leave you much worse off.

Some have been driven to get into more debt through consolidation loans, often secured, or remortgaging to pay unsecured debts. I know someone who did just that, to the tune of £27k which was added on to his mortgage to pay off credit cards rather than defaulting on them.

Six years on, the property's been sold, the proceeds of the sale have evaporated (the person in question increased his mortgage by £40k over a 7 year period for the sake of repaying unsecured debt) and he's had to default anyway. If he had instead defaulted 6 years ago his credit record would be clear by now and he'd probably be £40k better off!

At that time the persons actions may have been the best thing for them and we would have all done lots of things differently with hindsight.

If i knew then what.........

[mgfboy]

Re: EGG and defaults

My point exactly! We now know... If I had known what I now know I'd have convinced him not to do it but as they say, it sounded like a good idea at the time!

If you visit other sites, you'll still find lots of people asking whether they should remortgage to pay off their credit cards!

Sorry but for some people that may well be the best course of action and I've said this before UE isn't for everyone and I think your wrong in suggesting that it is.

[mgfboy]

Re: EGG and defaults

Nope, I'm NOT suggesting it is the best for everyone, I know very well it only applies to pre-2007 accounts and only certain types of account, and even those that fall under that category can be enforceable. What I'm saying is that securing unsecured debts is not a very wise idea. There are other ways to deal with them.

It would seem that the thing that worries most people the most is getting a CCJ which could result in a CO on their home, because that would mean securing the unsecured debt. If you remortgage to pay off unsecured debts you are doing exactly that yourself, even when there's more than a 50% chance of not getting a CO, if you see what I mean.

I agree in principle what your saying, but you always have to look at the bigger picture. For some people getting any type of adverse credit can lead to them not being able to work in their profession or impact on their ability to drive their business forward.

You always have to look at the whole story of how they got there and where they want to go. Also some people feel they have a moral obligation to pay their debt anyway they can and even though I have used UE myself, sometimes it doesn't sit well, after all said and done we have all spent the money ( the reason why doesn't matter) and knew one day we would have to pay it back.

[SXGuy]

Re: EGG and defaults

The highlighted portion of your statement is, "someday we would have to pay it back" the question in my view is, when is that day, because continously adding higher interest means you come to a point where any payments you make dont clear a balance, it only clears the interest on them.

I know, you have a right to cancel before the interest increases, but many people cant afford to do that, they get stuck in a "rob peter to pay paul" situation, and only with proper guidance or knowledge will help those people.

Ive said it before, no one took out a credit card 10 - 20 years ago thinking oneday they would jack the rate to 39% and your left paying a 8k debt over 10 years and looking at your balance remain the same.

My mother some years ago, remortgaged her house to clear some unsecured debt, which means she has 5 more years to run and shes 69 already.

If she had known about this site, or if the info was around back then, she wouldnt have even dreamt of remortgaging.

Shes self employed, and having credit means nothing to her to earn an income. Anyone who owns a business, should not rely on credit to sustain it. If you havent got the revenue coming in to keep it going, it isnt working. Remove the credit aspect of any business and it is clearly a trade loss. None of us should be put in a position where credit is needed. And one day soon we will all be living in a credit based system where your status reflects the credit you can obtain (on a more larger scale than CRA's) and I for one, do not want to be a part of it.

[mgfboy]

Re: EGG and defaults

The highlighted portion of your statement is, "someday we would have to pay it back" the question in my view is, when is that day, because continuously adding higher interest means you come to a point where any payments you make don't clear a balance, it only clears the interest on them.

I know, you have a right to cancel before the interest increases, but many people cant afford to do that, they get stuck in a "rob peter to pay paul" situation, and only with proper guidance or knowledge will help those people.

Ive said it before, no one took out a credit card 10 - 20 years ago thinking oneday they would jack the rate to 39% and your left paying a 8k debt over 10 years and looking at your balance remain the same.

My mother some years ago, remortgaged her house to clear some unsecured debt, which means she has 5 more years to run and shes 69 already.

If she had known about this site, or if the info was around back then, she wouldn't have even dreamt of remortgaging.

Shes self employed, and having credit means nothing to her to earn an income. Anyone who owns a business, should not rely on credit to sustain it. If you haven't got the revenue coming in to keep it going, it isn't working. Remove the credit aspect of any business and it is clearly a trade loss. None of us should be put in a position where credit is needed. And one day soon we will all be living in a credit based system where your status reflects the credit you can obtain (on a more larger scale than CRA's) and I for one, do not want to be a part of it.

Come on SXguy, you work in an accountants and you know lots of small business need credit to buy equipment and manage cash flow and I think your being disingenuous to say the least.

As for your credit card point I agree, when I first had a credit card I sure the rate was 20% in the eighties but the difference was we had to pay 5% off per month as a minimum. The companies went wrong by dropping this, but we where the weak ones to a certain extent by not controlling our spending. I think though most of us here now are wiser but we all still live in a world driven by credit so as I said earlier we still need to review the effects of our action.

For example in your practice if you ever suggest UE as a course of action you compliance partner would have a fit and I'm sure PI wouldn't cover it!!! That doesn't mean it's wrong it just have to be used with the right people and it not a get out of jail free card that some people almost suggest.

[mgfboy]

Re: EGG and defaults

I totally agree with the moral obligation when you borrow money from people you know or have to pay for services provided, etc. but not when you are borrowing the money from a financial institution!

That argument went completely out the window in 2008 when the way the financial sector is run became plain for all to see! Banks have absolutely no morals, they don't care what happens to people as long as they can keep lining the pockets of the selected few who get ob$cene bonu$e$ of millions every year. You now banks do pay out BILLION$ IN BONU$E$ every year, don't you? Where is the moral obligation to contribute to that?

Not to mention their fraudulent behaviour, if you and me, or any other business did what the banks have done we'd be typing this behind bars and our businesses would have been shut down but the banks just got bailed out with taxpayers money and the fat cats are living it up while the rest of the world struggles!

Offering mortgages to people who were known not to be able to afford them, starting at lower rates that were set to double or treble from the start, trapping them into an untenable situation forcing them to default, then re-packaging them to resell them as AAA bonds IS fraud. Doing all this whilst also betting against those same products by taking short positions is double fraud! Not to mention LIBOR rigging... don't even go there...

I also used to work in the financial $ector so I know what goes on there and no, there's absolutely no moral obligation to repay those fat cats, the reasons for that are so many that I'd crash the AAD server if I posted them all on here!

I cant argue with that, it's why when I have a crisis of consensus over UE etc that it soon passes. But I to work in the financial sector and I'm just making the point about the effect it has on clients etc.

[Never-In-Doubt]

Re: EGG and defaults

Sorry but for some people that may well be the best course of action and I've said this before UE isn't for everyone and I think your wrong in suggesting that it is.

mgfboy, steady mate - I'm with flower on this - never ever ever add credit card or other unsecured debts to a mortgage - it is the singular most stupid thing any debtor could do. It would never, ever be financially viable as the mortgage rate may well be lower, but say a £10k debt over 25 years at 1% is gonna cost a shit load more than paying an extra £50pm in a dmp or similar at 0% apr.

You know what I mean

[Never-In-Doubt]

Re: EGG and defaults

Have a go on our calculator - prove my post above wrong - it's impossible to be better off by adding any unsecured debt to any mortgage.... fact

---> http://www.all-about-debt.co.uk/calculators/calc_rp.php

[mgfboy]

Re: EGG and defaults

Have a go on our calculator - prove my post above wrong - it's impossible to be better off by adding any unsecured debt to any mortgage.... fact

---> http://www.all-about-debt.co.uk/calculators/calc_rp.php

B****ks it depends on your situation, I've remortgage people that have built up large credit card debts ( admittedly they earned plenty of money and weren't in any financial problems) on to the old flexible mortgages and they have been much better off.

They moved debt from an enviroment where it was costing 20% plus into one of say 5%, they trick is though to over pay the mortgage so you dont spread the debt over say 25 years.

Using your calcualtor with a credit card debt of 10000 at 20%
Your first monthly payment will be £250. It will take you 63 months to pay off this debt if you only make minimum payments and you will be charged £5594.76 in interest charges.

If you move it onto the mortgage at 5%

Your first monthly payment will be £250. It will take you 44 months to pay off this debt if you only make minimum payments and you will be charged £938.12 in interest charges.

I think my case stands ( figures from your calculator)

[Never-In-Doubt]

Re: EGG and defaults

mgfboy -

Bollocks really?

Tell me a mortgage that allocates repayments this way then - good luck! Its over the term of the mortgage - you know this. So if I remortgage a £10k debt it would be for the term of my mortgage not just the time to repay that otherwise I would need to pay at least £250 extra per month to the my normal mortgage payment - over 25yrs the interest will go into 10's of thousands!

I'm not arguing about this, it's not something that is considered good practice and never has been....

Opinions vary - mine is different to yours. Nothing wrong with differing views......

[mgfboy]

Re: EGG and defaults

mgfboy -

Bollocks really?

Tell me a mortgage that allocates repayments this way then - good luck! Its over the term of the mortgage - you know this. So if I remortgage a £10k debt it would be for the term of my mortgage not just the time to repay that otherwise I would need to pay at least £250 extra per month to the my normal mortgage payment - over 25yrs the interest will go into 10's of thousands!

I'm not arguing about this, it's not something that is considered good practice and never has been....

Opinions vary - mine is different to yours. Nothing wrong with differing views......

Yep we do have different views on this mate and sorry but there are many flexible mortgages on the market that allow you to over pay without penalty and stop and no disrepect to you this is what I do for a living and in the right situations it works and i'm sorry but where do you get the statement it's never been good practice from???.

It's only bad practice if it's not done properly but that could be said about anything , horse for course mate