Out of the blue letter from Paragon.

The story so far (to save you scrolling through previous posts). I took out a Universal Credit loan back in 1995. I paid for four years and then ran into problems. I contacted CAB who arranged for reduced payments until I could afford to pay the full monthly amount again. Part of the agreement was for interest to be frozen to prevent the debt getting any bigger, this is a standard practice (I had another debt with Barclays who did freeze the interest and it was paid off in full years ago).

Paragon brought UC and agreed to the monthly payments, they forgot to mention they would add interest back to the point when CAB made the agreement. Over the years I increased my payments and actually paid back around £15,000 on a debt of £4200. Paragon being greedy wanted another £12000 in compound interest!

Last year I stopped paying. I felt I had no moral obligation to pay back even more money as I had already paid back the debt with considerable interest. Paragon phoned a few times after I stopped paying, but then I heard nothing for several months.

I received a letter from Paragon saying -

I refer to previous communication in connection with the above account.

Following a review of the account, i confirm the company is not willing prepared to write off the balance and whilst the account is outstanding it will affect your credit rating.

I can confirm the company are prepared to negotiate on the balance by the way of a full and final or capped term offer that you might decide to put forward.

If you choose to make an offer please put it in writing.