Credit Card Debt

bellaboobie

Hi

I have just registered so if I have do anything incorrectly please direct me in the right direction. I am trying to compose this as best as I can but might not get it all laid out without tears.

A few years ago I stood guarantor on a loan for a work colleage [good friend]. Little did I know that they would default on it and drop me well and truly into it. To cut a long story short I have ended up paying heavily for this by using my credit cards as well as my savings. I was earning a good wage with my job with the County Council and was able to supplement the huge debt payments. Then the worst thing happened, I became ill a couple of years ago and am now recovering. I have run out of sick pay and am currently living on Invalidity benefit. However, my debt situation is getting bad by the minute - I now owe about £78500 in total [was more than that initially] I have kept up minimum payments throughout using whatever savings I had. I cut cost back and even moved into my friends home to reduce my outgoings. I have not used the credit cards to purchase any goods, except on barclaycard as they insist on a minimum spend of £1.00 per month to keep the 6.9% rate.

I have paid up this month's payments but am now worried how am I going to pay next month - what do I do when the statement arrive? I have an overdraft of £2,000.00 which I don't use and don't want to either.

I have been in touch with national debt helpline and they directed me to contact payplan which I have done. I have sent them my the interview pack form and am waiting to hear from them if I could go on a DMP to give me some breathing space while I sort my health out. I fully intend to get back to work as soon as I can. I can manage about £227 to pay my creditors if a DMP is available. I don't want to get into a situation where my career is jeopardised e.g bankruptcy. I have not told anyone about my problem as I just cannot bring myself to do so. Spent all weekend in bed sobbing and my friends let me be as they assume I was having a bad day with my illness. They are very good to me and just feel I am letting them down. I really want to tell them but would like to have something in place to deal with my debt before telling them so as they then don't think I am looking to them to bail me out.

I will continue later. I need to go for now. Thank you for listening.

HHH_2

Oh goodness that's terrible, what happened to the so called "friend" that is a huge debt to be paying for someone else. what about his/her family can they not help? sorry not to have any brilliant ideas but at least if you're in touch with payplan they should be able to help with a dmp but it just seems so unfair that you are paying someone else debt. have you talked to a solicitor?

epsilondraconis

Hi BellaBoobie, sounds like you're just too kind for your own good. If I were in your position, I would do two things:

1. Tell your current friends about your current situation. It would be good to get some morale support from them. Also, have you told your parents about this.

2. Contact the CAB to see what they can do. I'm not sure where you stand but they may be able to put you in contact with a solicitor that may be able to help. Obviously you want to ensure you are talking to a reputatble solicitor and one that will ideally give you a free initial consultation to discuss the options. I would probably go to see about three solicitors (provided you can get the free initial consultation), to ensure they are all saying the same thing and ensure they are not going to raise your hopes unnecessarily.

Please don't suffer this in silence. You have demonstrated that you have been a good friend to someone, who ultimately took advantage of that. I'm sure your current friends will be pleased when you have told them and will do as much as they can. Perhaps they can send the heavies around to the 'friend' that got you into this mess :-)

It may be worth posting in the Credit Card section of this forum as well. There are some very knowledgable people on there that may be able to help a little more.

debtdesperado

Hi Bellaboobie

I agree with all the above... can you explain a bit more about what has happened to the 'friend'? Are you still friends with them? Have you spoken to them about the situation they have left you in? What did they say?

Before you go and speak to a solicitor, find out as much as you can about your friend's financial situation ie, are they bankrupt, do they own a house, are they married, if not where are their parents etc as I imagine the solicitor may advise that you sue the friend to reclaim the debt, therefore the more info you have on any assets they own or people connected to them who may have assets the better.

Also be prepared to explain the circumstances around you agreeing to guarantee a huge sum. Does the friend have better financial knowledge than you (if so maybe they should have advised you to obtain separate legal advice about the ramifications of what you are doing?), did your friend's lender advise you to get separate legal advice (might be worth running the argument that you didn't know what you were taking on?), or did you have any 'agreement' with your friend, whether verbal or in writing about what would happen to the debt if you were called to pay it (maybe they suggested that they would sell their house/a kidney/the wife to repay you?).

Collect everything together, and write notes to remind you in your meeting because you'll get a much more specific answer from a solicitor if you have all this information.

Also might be worth checking if you can get free legal advice on your house insurance policy, or if you are a council employee via union membership. Maybe you also have access to an advice line provided by a union/your employer?

If none of the above, and it's a large sum, as a last resort if you own your own property it might be worth having a chat with your mortgage provider, as if you are going to lose your home or if the lender of your friend's debt gets a charging order over your home (it means that you stay in the home but on a sale, the profits go to the friend's lender) they are the ones who may eventually lose out, so they might be willing to get involved and help you. But I would only do this as a last resort as it might make them jittery.

Fingers crossed for you.

bellaboobie

Hello all

Thank you so much for your kind words and support. I feel a bit better having written it down and am going to try to set out the whole picture. Please bear with me.

This whole mess started in late 2002 when "the friend" did not come back to work after the Christmas holidays. Not a single person at work or the neighbours where she lived had any knowledge of what had happened to them. She had also left her ailing mother [who has since passed away] in a home for respite care. As far as I am aware her mother was her only relative - as she appeared to be very fond of her and was always talking about her. The last anyone had any info [don't know if it's true] on her was that she had gone travelling or something like that. But why? The County Council have now terminated her employment for non attendence at a disciplinary hearing. That's all I have been told due to staff confidentiality, etc. etc.

Soon after I received a demand for full payment as guarantor as she had defaulted on the loan. Not wanting to get into bother with the loan company I manage to get the money to pay them i.e. savings, borrowing from family, a loan and credit cards. One burden was eased but another emerged which I managed to keep in check. I cut down on all expenses [I am not a materialistic person as such] and initially moved in with my sister and her family to save more costs and used most of my salary to keep up the payments. You know, bad luck has not left me since, as then I had to move in with my friends who I am now living with, due to a fire at my sister's house and they having to move into rented accommodation. They are back in their home now.

As if that was not bad enough, I had got get ill and now I am in utter mess and just don't know where to turn to. I don't own anything - even this computer belongs to my friend and get to use it when she's at work.

My only hope is to get a DMP started for now and to go back to work as soon as I am able to and then increase the payments into the DMP. I am 50 now and don't want to lose out on my occupational pension when I reach retirement age. The only other relative I have is an uncle who is on a pension - my sister and I are his next of kin so. god forbid, when the time comes for him to go, I might have a lump sum to pay as well. My sister has 3 children of her own, although her oldest helps me with my expenses by giving me £50 when he can.

I have no other debts except this - juggling and balance tranfers etc. etc. - most of them are on low interest rates but don't help when I have not got enough to pay back. I hate myself for being such a fool.

I don't really know how to broach the subject with my friends. They have only got small credit card bills and most likely assume I have none. They are always going on about how people have only themselves to blame for getting into debt, etc. etc. etc. and which banks pay good interest rates etc. etc. To be honest it just drives me mad and I go weep in the shower as no one can see me crying. I can't even move back to my sister's as there are 5 living there already. Just don't know what I am going to do if Payplan says I can't go on a DMP. Just don't know.

Has anyone had experience with Payplan?

Would it be wise to write to the credit card companies to let them know I am having difficulties in meeting the minimum payments? Would they get heavy with demands?

Thank you once again for your help.

fatbelly

bellaboobie wrote: »

Just don't know what I am going to do if Payplan says I can't go on a DMP. Just don't know. Has anyone had experience with Payplan? Would it be wise to write to the credit card companies to let them know I am having difficulties in meeting the minimum payments? Would they get heavy with demands?

Payplan are one of the 'good guys' in this area. As long as you can afford £100 per month they should take you on. They will contact your creditors.

Are you sure you can afford this on Incapacity Benefit? Well, Payplan will check.

You should know that CCCS have a minimum payment of £5 per creditor per month and the CAB have no minimum.

Whoever you use you must ensure that your income is going into a bank account unconnected to any of your debts.

Unless you are a big earner, 78k of debt is going to take an unreasonable length of time to pay off.

Do you own property?

What line of work are you in that prohibits bankruptcy?

csarina

I have read your story with growing horror.....what a dreadful situation to be in and how cynical of a so called friend to leave you in such a dreadful situation.

I really do not have any advice to offer, except to say that you should confide in someone, you need to share the burden. I hope you are soon well enough to go back to work soon.

debtdesperado

Hi Bellaboobie

Thank you for giving us a bit more info. I definitely think you should go and see a solicitor, as your situation seems so unfair that I can't believe that there is not a way of getting out of paying the sum.

It doesn't sound as if you knew the 'friend' very well, and together with the size of the sum surely someone (probably the lender) is under a duty to check that you were aware of exactly what you were taking on.

It is very honorable of you to try and pay off the debt.

Also, if you can turn detective and find where your friend has gone to, you could pass the information onto the debtcollectors... the internet is a wonderful way of finding people... try typing your friend's name into google.co.uk (in "speech marks" so it finds the phrase), friends reunited, linkedin, facebook, youtube, 192.com etc, or if your friend had a profession, what about work related websites - fingers crossed for you that they have a slightly unusual name!

bellaboobie

Hello everyone

Thank you for your responses. It helps to have it off my chest.

My job is with Social Services mainly with elderly care and my terms of employment contains a clause on bankruptcy, hence it is not an option.

I did consult a solicitor in 2003 when the demand was made and basically I was told that I should have been aware of the repercussions involved in guarantoring a loan and should have scrutinised the small print. So that was that and basically was told to find the money and pay up.

Believe me, I have tried every resource available to try and find my friend - there is nothing out there on her. Sometimes I tend to wonder if she's lying buried in a ditch or anything like that - who knows what can happen. There is not much else I can do apart from keep trying to locate her.

Does anyone know how long it takes Payplan to reply once they have had the interview pack sent to them?

I know I have asked this previously, but could someone please advise as to what I should do when the next credit card statements start to arrive - do I pay them whatever I can? or not at all? or write to them? I am petrified not knowing what to do until payplan reply. What should I do?

I am very grateful for all you support and kind words. Thank you so much.

Tigert

Hi Bellaboobie

Just wanted to add my support. I've been with Payplan for almost a year now and they've been brilliant (I had a similar amount of debt but mostly self inflicted in my case).

Payplan were quite quick with me. From my first Phonecall they gave me a detailed interview within 4 days and my first payment went to creditors within a month.

I have always found Payplan to be very helpful and quick to respond either by phone or email, so I feel sure you have made the right step.

RAS

Hi BB

A few thoughts.

If you were the original signatory of this debt, I would be doing the following.

1. Sending a CCA request to find out if the loan was properly documented. Did you solicitor check this?

2. Reclaim any charges (unfortunately reclaiming interest is not an option), to reduce you liability.

3. Did the original debt include PPI at all?