In debt

joanne2008

I am in £8000 of credit card debt , (the 4 cards are cut up now) and want to get out of it asap as we all do.:D
I am paying £260 total per month minimum payments on all my cards and have between £20 and £30 charges on each card per month so am paying less than

If i was to see the CAB to try to sort out a payment plan with them would it effect my credit rating, it is not great at the moment cos i am up 2 my lending limit.
Also would i be better off if i contacted the credit card companies to try to get them to cut the interest for a year so i can try to pay off as much as i can in that time. Would they do that? and without putting me into there recovery department and giving me a bad rating?

I know its a bit cheeky as its my debt and i should have known but we all learn from our mistakes.


Thanks in advance.

skintandscared_2

You'll find a lot of people on the "Debt Free Wannabe" section that you can relate to!!

I'm in the same boat, and am about to enter a Debt Management Plan with CCCS. They are a free organisation who do not charge for their services. They negotiate with your creditors to try and reduce or (hopefully) freeze interest. You pay the organisation a monthly amount, which they agree with you based on filling out an expenditure sheet and seeing what you have left.

I would definitely browse the DFW board and contact either the CAB, CCCS or Payplan. Do NOT look at debt management companies that charge a fee. They do no more for you, but they take a cut from every payment you make, so less goes to your creditors.

All the options available will damage your credit rating, but is that a problem seeing as credit got you in this situation in the first place?

A DMP is the least scary, but does mean your credit rating is trashed for as long as you take to repay your debts, plus 6 years.

An IVA is the next step up. You pay an agreed amount for 5 years, as with a DMP, but after 5 years anything left is written off. BUT if you have equity in a property it has been known for creditors to make you refinance to get the balance of what you owe them before the end of 5 years.

Then there's bankruptcy, which I think is way too far for your situation!

Martin has put guides of all these procedures on the site.

But in the first instance, to go the DFW board. You will be asked to post a SOA (statement of account) showing all your income and outgoings. It might be that the helpful people there can help you shave enough off your outgoings to up your payments to your credit cards so you don't need to default at all.

See you over there...

skintandscared_2

Should add that lots of people make their own arrangements with credit card companies to try and freeze interest and it does sometimes work, BUT your accounts will still be registered as defaulted. There are template letters on the DFW board if you ask for them.