Where do I go?

dhanwell

Hi everyone,

3 weeks ago, I had a bank balance of £19,500. Today, I have £2,500 of a £3,500 overdraft remaining. I also have a credit card balance across 3 cards of nearly £12000. The reason? A spreadbet gone badly wrong, which I kept throwing more and more money at. I made all the money spreadbetting, and lost it all again. I've been suffering pretty badly with depression which was catalyst for my 3 weeks of lunacy. I've admitted the problem to my girlfriend and am going to see a gambling counsellor and a doctor regarding my evil twins (gambling and depression). But I need to sort out my financial situation first. I don't ever want to have credit again : I earn a decent salary (around £30k), but I am only 27 and this should rise (as long as I don't mess up in work either) to £50k in the next 2-3 years. At the moment, however, I don't think I can afford credit card repayments with interest : I would like to reach an agreement with my creditors where I pay them a certain amount every month until the debt is cleared (without attracting interest). Is this likely? Any advice/thoughts would be much appreciated.

whatatwit

Hi, first of all cut up your cards and look at blocking any internet gambling sites from your PC.

I take it that your credit history is ok at present, I think if you enter into some sort of plan to freeze the interest this will show on your credit record and you may regret it in the future.

Well done on seeking help, there is a thread on this board about gambling and it may help you.

Why not try and make the payments and possibly look at transfering some of it to a 0% card if you can get one.

My other thought would be to post a SOA, have a look at the thread for newbies at the top of the board. It might be with a bit of juggling that you can make the payments and as your income rises pay them off and have a clean slate and start to build up savings.

Good luck.

GeorgeUK

There's a thread here for gamblers, might be worth posting on it even just to get everything off your chest.
http://forums.moneysavingexpert.com/showthread.html?t=1090463

I think the fist thing you need to do is cancel all your gambling accounts, then deal with the fallout. If you post up a statement of affairs, it will help us see the damage and if there are any areas you can save on.
http://www.makesenseofcards.com/soacalc.html

As you have gambling debts on your cards, these will brobably be at a much higher rate of interest as they will be classed as a cash advance. As you can see from my signature, my debts are mostly from gambling, but i've been able to sort them out and taken advantage of some of the 0% promotional offers on credit cards. The only reason i could meet the minimum payments until recently was the Virgin card (0% for 15 months and after 2nd month, min payment is £25).

If you post up an honest SOA of what you are currently spending, then we should hopefully be able to put a dent in that debt quite quickly.

dhanwell

Thanks for the reply.

Credit history is fine at the moment (hence all the credit cards!). Really don't want to get another one though as it might lead me into temptation again. Not too bothered about the credit history thing - not looking to get a mortgage in the near future and not getting access to credit, again, might be a good thing. I just want to start repaying what I've thrown away : I think I could afford about £250 a month in repayments (in total). Could an IVA be the answer?

GeorgeUK

IVA's are not the great thing that all those TV ads make them out to be. It is a form of insolvency and if your IVA fails for some reason, the next step is usually bankruptcy. IVA's are suitable for only a small number of people.

If you are really struggling, you may want to contact one of the FREE debt charities such as CCCS or Payplan who may be able to help you set up a debt management program to pay your creditors a % of your expendable income. This does have a serious effect on your credit rating and will remain on your credit file for 6 years along with any defaults.

Merlot

Welcome to the board dhanwell and for admitting your gambling problem.

IVA's are rarely suited to most people, take a look at Martins advice on them.

I'm going to be blunt here, £12,000 isn't a huge amount of debt and on your salary you should be able to repay this without too much problems, you could of course write to your creditors and ask them to reduce/freeze interest but they don't have too and most won't in my experience.

Repaying debts isn't easy or painfree, I wish you the best in doing so, if you post an honest SOA you will recieve many more replies.

Merlot.x.

dhanwell

Thanks everyone for the replies.

CCCS and Payplan possibly look like the way to go. Also (and I'm ashamed to say this), if I just stop paying (with a view to setting a manageable amount with debt collectors), what's the worst that can happen? I'm not being glib there, it's a serious question. I really want to sort myself out but the repayments I can make will barely cover the interest at the mo

Merlot

You really musn't stop paying them, you should offer them a token, something is better than nothing, you will get hounded by phone calls by the collections department if you do not meet your payments, do you have an answer phone? (they can be really useful, and they can and do phone people at work too if they have your number, I'm not frightening you, just being honest).

Write to your creditors and offer them a token payment, and make that call on Monday morning to CCCS or Payplan, you'll wonder why you didn't do it earlier, they have an wealth of knowledge and are very busy so do not be upset if you have a few weeks wait for an appointment.

Merlot.x.

dhanwell

Thanks. What do you mean by token payment?

GeorgeUK

A token payment is a small payment of £1 or more to show a willingness to pay. This shows them you are not just ignoring the debt and if you state you are contacting of of the free debt charities for guidance, may allow this until you are in a position to make pro-rata payments based on your available income. They will probably want to see something similar to a SOA to see what you are spending your money on - why should they accept reduced payments if you are spending £500 a month on entertainment for example.

edinburgher

dhanwell wrote: »

Thanks everyone for the replies.

CCCS and Payplan possibly look like the way to go. Also (and I'm ashamed to say this), if I just stop paying (with a view to setting a manageable amount with debt collectors), what's the worst that can happen? I'm not being glib there, it's a serious question. I really want to sort myself out but the repayments I can make will barely cover the interest at the mo

You could end up with listed defaults on your credit history for six years and even assuming they're willing to take a full and final settlement or similar, your credit history will be impacted upon.

This affects mortgages and most other forms of consumer credit.

Please be aware that while there are people out there who can offer help and advice, there's a fair bit of the process of recoverning your finances that you and you alone can fix.

Best of luck mate.