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By Toby1973
#504
Hello there, I am in a DMP and Lloyds TSB Bank have written to me to tell me that as far as their concerned the DMP is finished and they are demanding that PayPlan submit to them new proposals increasing the amount that I pay them every month. I cannot afford to pay them more money, so now they are puting the amount that I owe to them £ 363.10 per month into an unplanned over draft account ( I never had an over draft with Lloyds any way as all my statements with Lloyds all ways said NIL on them). So now they have rung me up on the phone and said that I owe them £ 310.00 for just one month's worth of accumulated charges based on their daily, weekly and God know what fees!!! Yesterday I received in the post a statement and it said that I owe them £ 410.63 in new charges for these daily, weekly fees etc... I would like to know what I can do to stop Lloyds TSB from carrying on this way and jacking up the amount of money that I owe them??? What can be done?? Is this legal ?? Help???? My wife is freaking out !!!
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By Andrew Graveson
#507
Hi Toby,

The scenario as you describe would seem to be poor behaviour on the part of a major banking institution. As part of the British Banking Association''s Code of Conduct Lloyds TSB are committed to treating cases of financial difficulty sympathetically.

I think you should contact your representative Payplan as a matter of urgency and question what they will do to bring this strange state of affairs to a quick end and ensure that you are credited for any charges which appear to be unfair.
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By Steve Jackson
#518
Hi Toby

I do agree with Andrew that you need to speak to Payplan to get this sorted out for you. After all, Payplan do say that they have very good relationships with all of the creditors because they do not charge monthly fees to people in the debt management plans that they manage.

Having said that, and I do not wish to sound like a broken record, but unfortunately if you are in a debt management plan, you have to recognise that this is an informal agreement with your creditors. You and they are not legally bound to it in any way. As such, at any time your creditors can demand that the terms are changed and likewise you could choosed to reduce or increase your monthly payments.

Before you went into your DMP with PayPlan, did you consider bankruptcy or an IVA? If bankruptcy is an realistic option for you, perhaps you could exert some pressure on Lloyds by saying that unless they are more reasonable you will be forced to go down the bankruptcy route and they will get a far smaller return.
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By Hayden
#1024
Hey Toby,

If Lloyds are constantly giving you hassel despite the fact that you are doing your best to repay them through a debt management plan, I would be inclined to turn the tables on them and consider declaring yourself bankrupt....! I bet they would sit up and listen then.
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By Andrew Graveson
#1221
Hi Hayden,

I don't think that course of action is likely to help Toby. I'm not aware that those answering calls from debtors have discretion to change their stance based on a threat of bankruptcy.
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By Hayden
#1671
That seems a bit crazy Andrew. If someone is prepared to declare themselves bankrupt if a sensible payment arrangement can not be reached, surely any creditor would be silly not to take notice and make a deal. Otherwise the likelihood is they would get little or nothing when the bankruptcy went through.
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By Steve Jackson
#1683
Unfortunately Hayden, you can not apply the usual rules of logic when negotiating with some creditors. It is possible that a creditor has a directive from senior management that they will not negotiate in certain circumstances even if this means that they loose out on some cases because a debtor declares bankruptcy. This is similar to Northern Rock's view of IVAs. Because of their policy to refuse most IVA applications, they will do so even when the debtor's next option is bankruptcy and they will receive far less than they would through accepting the IVA.
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By Andrew Graveson
#1700
Hi Steve,

I think a lot of those turned down by Northern Rock for IVA's didn't actually go bankrupt though.......... begs all sorts of interesting questions?