credit card debt

snozzleblue

My brother owes £16,500 on credit cards. He has written to the card companies requesting they freeze interest payments for 4 years so that he can make full payment of the amount owed. He has balance transfered for a number of years, and is now finding difficulty. He also has a high mortgage. What has offered is to pay £65 per month to each card. Does anyone have a comment on this. He does not wish to go bankrupt, but is prepared to make this offer.

shaymenRup

He needs to visit his local citizens advice centre (yellow pages).

They are likely to be able to help him with the process and provide free legal advice. The good thing is that he is communicating with the companies rather than just ignoring his debt

CLAPTON

not really enough details to fully comment...

but seeking advice from CAB, CCCS or payplan ... all free debt advice agencies is a good idea.

Also he may want to post over on the debt free wannabee board.. he will get lots of advice and support there.

The creditors will probably want a statment of his income and spending so they can see why he is defaulting on the debts....
also its better to 'prorata ' the payments rather than give each the same (i.e. a big creditor should be paid more than a small one).

They will probably default the debts after 3/4 months which will trash his credit rating for 6 years

then they will probably sell the debts to debt collection agencies... this is (surprisingly) good news because the DCAs will often accept a full & final settlement for a lot less than the debt.
Depending upon the circumstances some may seek a CCJ and a charging order on the house.

But he needs to be prepared for lots of hassle in the first few months .... loads of phone calls etc... hopefully it won't happen but best to be prepared.