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If the lender contacts you to demand money, do not make them any offers.

This is to do with good negotiating practice. Both you and your lender have rights. It is using its rights; you should be using yours. Your first right is to require the lender to account for any claim it is making against you before you do anything about it.

Making offers – even filling in and returning the income and expenditure form the lender will send you – may be taking as an admission that you accept that you “admit” the debt. You don’t. So don’t do it.

You’ll almost certainly find the lender avoids answering the question fully and generally tries to avoid giving you any more information. Yet it will demand quite a lot of information from you. Odd, that! It’s actually just good negotiating technique: give away nothing and find out what you can about your opponent. Lender’s debt collection departments are experts at it, they do it all day.

You should react in the same way. If people demand money from you, you don’t have to tell them anything. And it is your right to find out exactly how they arrived at the sum they are asking for. It is also your right to question whether it acted reasonably.

Lenders, of course, would rather you just gave in and offered whatever cash you have. If you do not have much cash they’ll offer you a low monthly repayment instead. Do not accept it. Once you accept it you set up a new contract which, if you break it, could be registered on your credit reference record. And you are likely to break it because the chances are the lender claims you owe so much money that it will take you years to pay it back. In that time your circumstances are bound to change in a way that might mess up the agreement and get a black mark on your credit reference file.

Agreeing to pay a certain amount each month frequently comes back to haunt you. Abbey National and Bradford & Bingley have both made such agreements and then, a year or so later, demanded higher payments.

Typical of this kind of thing is the repossesses agreed to pay back £40 per month and did so without problems for three years. Then the lender wrote demanding that he increase his repayments to £100 per month.

Your agreement to pay the lender anything also weakens (though doesn’t usually destroy) your case if the lender takes you to court. If you have offered to pay or have admitted liability and need legal evidence that you are not bound by this offer or admission,


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