MBNA default and termination

[pen]

Hello everyone.

Very pleased to have discovered this helpful forum. This is my first post, so apologies in advance (i) for its length, (ii) for my hesitation in using common acronyms, and (iii) if some of my questions seem naive.

I have questions regarding an MBNA credit card agreement. Details as follows:

- Type of account (credit card/loan): Credit card
- Date commenced (ideally before Apr 2007): About a decade ago, i.e. prior to April 2007. [Unfortunately, I don't remember the exact year, and my records are all over the place.]
- Approx balance: Five-figure sum
- Date last paid (approximate date you last made a FULL payment): I don't recall ever having made a full payment. From the outset and for the most part, I stupidly restricted myself to making the minimum payment each month.
- Are you on arrangement or not paying: Not paying
- Status (default/in arrears/up-to-date): Default
- Account owner (who is writing to you, a DCA or the lender): MBNA (original creditor)

By way of additional background, I've not used the card for about three years. The last time I made any payment into the MBNA account was over six months ago.

Although currently unemployed, I am a homeowner with some equity in my property and have managed (with a fair few delays) to keep on top of mortgage payments. I have a separate credit card debt and a loan debt, but for much lower amounts (less than £4,000 in aggregate); I am a single payment behind with one and up-to-date on payments with the other.

Upon realising I was unable to continue making MBNA monthly payments, my regrettable course of action until now was to stick my head in the sand, not even bothering to open bank letters or answer telephone calls. However, I did open the last letter that stated my credit agreement was terminated. The bank also confirmed it had registered a default at the credit reference agencies (CRAs) which "can't be cancelled or reversed and will stay on your file for the next six years".

That letter then listed the recovery action MBNA may take, including sale of the debt, placement of the debt with an agent to collect on its behalf, and litigation (applying for a County Court Judgement and then applying for an enforcement option such as a charging order). Also stated was that if I were in a position to pay "the full debt or make a reasonable offer" in settlement of the matter, the bank would like me to call to discuss. I assume this means they're open to receiving a full and final settlement (F&F) offer.

I am in the fortunate position where a family member has agreed to provide me with some funds for an F&F offer. This is an option I'd be interested in pursuing. From reading different threads on this forum, I note the consistent advice of avoiding any telephone conversations with banks or debt collection agencies (DCAs), and restricting communications with them to signed-for letters.

My questions relate to the best course of action to now take:

1. I have not sent off a consumer credit agreement (CCA) request to MBNA. Is this worthwhile and, if yes, should it be done prior to entering into discussions regarding an F&F offer? For example, would I have more negotiating leverage if MBNA failed to comply with the request or if the CCA were likely to be unenforceable (in which case, I would presumably not need to be concerned about a charging order being placed on my property)?

2. I have also not made a subject access request (SAR). Would there be any real benefit here in my obtaining SAR information from MBNA?

3. Is it advisable that I negotiate with MBNA itself, or perhaps wait to see if the bank sells on the debt to a DCA? [My understanding from certain forum posts is that DCAs may be more willing to accept lower F&F offers than original creditors. However, I would prefer to avoid the risk of court proceedings being commenced.]

4. With respect to tactics with F&F offer discussions, would I be correct in assuming it's better for me to suggest an initial low settlement amount to MBNA, rather than inviting the bank to make the first offer?

Regarding the above, a post by Never-In-Doubt refers to this thread (relating to percentage increments in F&F offer negotiations) which I can't seem to access: viewtopic.php?f=73&t=350 (http://forums.all-about-debt.co.uk/v...php?f=73&t=350)
I just get a '404 Page not Found' error notice. Does anyone know whether the thread still exists?

5. Lastly, is MBNA's confirmation that a default at the CRAs cannot be cancelled or reversed actually correct? [My impression is that the removal of a default by the creditor can actually form part of a negotiated agreement for an F&F offer.]


Thank you very much for any advice forum members can provide.

pen

[Never-In-Doubt]

Re: MBNA default and termination

Hi & Welcome.

1. I have not sent off a consumer credit agreement (CCA) request to MBNA. Is this worthwhile and, if yes, should it be done prior to entering into discussions regarding an F&F offer? For example, would I have more negotiating leverage if MBNA failed to comply with the request or if the CCA were likely to be unenforceable (in which case, I would presumably not need to be concerned about a charging order being placed on my property)?

Honestly, as the default is already there you'd be best letting MBNA sell this to a DCA then either pursue UE or consider a F&F at the point it's with a DCA as they purchase debts for approx 12p in the £1 so you can get better deals. The bank will not negotiate - why would they? If they sell it and don't recoup their losses it's a tax-loophole for the bank so they rarely do deals.

I would send off CCA Request --> Our Templates | Unenforceability Templates | CCA Request

When you get that back then let me see it and we'll know more.

You may as well it for all debts you have for now, no harm at only £1 each.

2. I have also not made a subject access request (SAR). Would there be any real benefit here in my obtaining SAR information from MBNA?

Nope, no need unless you had PPI and were looking to reclaim, for now a CCA Request will suffice.

3. Is it advisable that I negotiate with MBNA itself, or perhaps wait to see if the bank sells on the debt to a DCA? [My understanding from certain forum posts is that DCAs may be more willing to accept lower F&F offers than original creditors. However, I would prefer to avoid the risk of court proceedings being commenced.]

See point 1 above - wait!

4. With respect to tactics with F&F offer discussions, would I be correct in assuming it's better for me to suggest an initial low settlement amount to MBNA, rather than inviting the bank to make the first offer?

Regarding the above, a post by Never-In-Doubt refers to this thread (relating to percentage increments in F&F offer negotiations) which I can't seem to access: viewtopic.php?f=73&t=350 (http://forums.all-about-debt.co.uk/v...php?f=73&t=350)
I just get a '404 Page not Found' error notice. Does anyone know whether the thread still exists?

Never-in-Doubt (Niddy/Me) is the administrator....

Some of the older threads (pre Aug 2010) were using old forum software and hence the links are not 100%.

See here --> allaboutDEBT | Our Templates | Creditor Offer Templates

5. Lastly, is MBNA's confirmation that a default at the CRAs cannot be cancelled or reversed actually correct? [My impression is that the removal of a default by the creditor can actually form part of a negotiated agreement for an F&F offer.]

Yes it's correct, on rare occasion we get them to remove default entries but it is rare.

What you need to consider is it worth paying £x back just for a clean credit file or is it actually better not to pay it back and consider UE thus having no credit for 6 years but not having to pay back the 5 figure sum plus extra £4k.... so it's £14k + over 6 years or go UE and pay £0 over 6 years.... up to you how you play it

[Undercover Elsa]

Re: MBNA default and termination

Hi Pen and welcome to AAD

I'm impressed by the research you've already done..makes life a lot easier! In answer to your questions:

1. I have not sent off a consumer credit agreement (CCA) request to MBNA. Is this worthwhile and, if yes, should it be done prior to entering into discussions regarding an F&F offer? For example, would I have more negotiating leverage if MBNA failed to comply with the request or if the CCA were likely to be unenforceable (in which case, I would presumably not need to be concerned about a charging order being placed on my property)?
Yes, definitely send the CCA prior to negotiations. They are as you deduce far more likely to come to a low agreement if they think they may not get paid at all. There are many reasons for enforceability so the likelihood or otherwise of them attempting legal action varies dramatically from case to case. There's nothing to lose by getting your ducks in a row and establishing the nature of this account.

2. I have also not made a subject access request (SAR). Would there be any real benefit here in my obtaining SAR information from MBNA?
Not at this point in time unless you perhaps want to check for unfair charges/ PPI, establish a default or precise last payment date, resolve other disputes or if they seem likely to issue a claim. However no harm in sending a SAR if (like me!) you like to know everything they have on you

3. Is it advisable that I negotiate with MBNA itself, or perhaps wait to see if the bank sells on the debt to a DCA? [My understanding from certain forum posts is that DCAs may be more willing to accept lower F&F offers than original creditors. However, I would prefer to avoid the risk of court proceedings being commenced.]
DCA's are more likely to negotiate, having purchased the debt at pennies in the pound. MBNA do issue court proceedings themselves so no benefit to be gained by remaining with them.

4. With respect to tactics with F&F offer discussions, would I be correct in assuming it's better for me to suggest an initial low settlement amount to MBNA, rather than inviting the bank to make the first offer?
Absolutely. You take control. Plus the more errors you can find with the account the more you'll have them on the back foot and the more desperate they'll be to deal.

Regarding the above, a post by Never-In-Doubt refers to this thread (relating to percentage increments in F&F offer negotiations) which I can't seem to access: viewtopic.php?f=73&t=350 (http://forums.all-about-debt.co.uk/v...php?f=73&t=350)
I just get a '404 Page not Found' error notice. Does anyone know whether the thread still exists?
It was probably this one? UPDATED - Full Final Settlements Explained - allaboutFORUMS Can you point us to the thread with the outdated link?

5. Lastly, is MBNA's confirmation that a default at the CRAs cannot be cancelled or reversed actually correct? [My impression is that the removal of a default by the creditor can actually form part of a negotiated agreement for an F&F offer.]
It's VERY rare that they'll remove a default, unless you can prove it was done in error, but not unknown. It stands as a record of how the account was conducted so usually it stays after F&F albeit marked as settled. No harm in asking though but be prepared for a refusal.

Hope that helps to get you started. Others will be along soon


Elsa x

[pen]

Re: MBNA default and termination

Hi Niddy,

Thank you for your reply. Much appreciated. I will start off by making a CCA request.

This part of your response was especially helpful for me:

Honestly, as the default is already there you'd be best letting MBNA sell this to a DCA then either pursue UE or consider a F&F at the point it's with a DCA as they purchase debts for approx 12p in the £1 so you can get better deals. The bank will not negotiate - why would they? If they sell it and don't recoup their losses it's a tax-loophole for the bank so they rarely do deals.

Previously, I had not considered the possible existence of a tax benefit for a bank selling on a debt at a loss. For this reason, I hadn't understood why a bank would be less flexible in negotiating F&F offers than a DCA. In my ignorance, I assumed it made no difference to the bank if it received [x] pence in the pound by selling the debt to a DCA or the very same amount through an F&F offer with me.

It all makes sense now.

Thanks again, and will keep you updated.

pen

[pen]

Re: MBNA default and termination

Hi Elsa,

Many thanks for your response. It was a luxury to receive the knowledgeable perspective and guidance of more than one member on this forum.

Regarding your reply to my question 4 about the outdated link, I saw this link in these two threads before I wrote my initial post:

CALLING NEVER IN DOUBT - Page 2 - allaboutFORUMS

Barclaycard Help Please [Archive] - allaboutFORUMS

pen

[Undercover Elsa]

Re: MBNA default and termination

Hi Pen,
You're welcome! Quite funny actually as I started replying to you on Internet Explorer which froze before I finished, so I managed to copy my reply and change to Firefox...but in the meantime fastfingers Niddy had already answered!


I got your message, let us know as soon as you get anything back from them, and best of luck.

Elsa x

[Never-In-Doubt]

Re: MBNA default and termination

Huh - you get a message and I don't - charmin!

I'm off to sulk

[Never-In-Doubt]

Re: MBNA default and termination

Hi Niddy,

Thank you for your reply. Much appreciated. I will start off by making a CCA request.

This part of your response was especially helpful for me:



Previously, I had not considered the possible existence of a tax benefit for a bank selling on a debt at a loss. For this reason, I hadn't understood why a bank would be less flexible in negotiating F&F offers than a DCA. In my ignorance, I assumed it made no difference to the bank if it received [x] pence in the pound by selling the debt to a DCA or the very same amount through an F&F offer with me.

It all makes sense now.

Thanks again, and will keep you updated.

pen

Have a mooch here, you'll learn more about how the tax system works with write-off losses

--> A DCA Writes - Page 8 - allaboutFORUMS

[Undercover Elsa]

Re: MBNA default and termination

Huh - you get a message and I don't - charmin!

I'm off to sulk

The message was CC'd to you too, sulkypants!