Advice please im in trouble

saucyxx

I have got 2 credit cards, both up to (or near enough) their £1000 limits. I know this is peanuts compared to many of the people on here, but to me, its a really big problem.

My tax credit payments were messed up and Im down over £100 a week if you combine the childtax credit and my partners working tax credit.

Until these payments stopped, I was coping with the minimum payments and had started paying them off slowley. I got in to real trouble with the payments because my only income is now only £10 a week..

I started falling behind with payments and explained the situation to both companies and i was put on reduced payment plans for 3 months. I coped with that but afterwards i was late on a few payments and they wouldnt put me on another plan.

Capital one send me a form thing so i can show them how much i can afford to pay them each month and i am waiting to hear back from them.
Style finance send me the same form and i send it back but ive since received a letter from a debt collecting agency saying i have failed to settle or make mutually acceptable repayment arrangements and that unless i give this agency a new proposal of repayment they will be making arrangements to recover the debt.


I have nothing of any value except my car... Can they take it? I was thinking about transferring the car into my dads name, will this stop them?

Is my only other option to go bankrupt? and how will this affect me? Im only 22 and I have a 2year old to support

Please help me, This is ruining me, im so depressed.

JAMIEDODGER

hi saucyxx,

what you need is to list a SOA (statement of affairs) list all your income, and your outgoings, your debt with minimum payments, apr and balances. once we see these then we can help you out.

do you live with a partner? how come your only income is now £10 per week?

are you claiming all the benefits you are entitled to?

saucyxx

I live with my boyf, he pays for everything else , bills rent food and he cant afford to bail me out, he didnt realise how bad it had got.

My income was the childtaxcredit and my other halfs working tax credit. We are not entitled to any other benefits at all because he works full time.

My postman has just been and i have a letter from style finance, looks like they sent the other letter before they received my form thing. They have reduced my payments from £60 pm to £20.75... its a start i suppose!.

Marisan

Hi,

I'm no expert,but can only offer advice from personal experience.First off,as Jamiedodger says,is to list your SOA.This is always a good exercise and may surprise (or shock) you.

Next,keep talking to your creditors.Some of them can be quite understanding,although I know there are some out and out B******s among them.Keep copies of all correspondence that you recieve or send....if the worst comes to the worst you will have proof that you have done your utmost to get yourself straight.

Never,ever offer to pay more than you honestly know you can afford.Yes,they will pressure you,but stand your ground.Better to offer a small amount and keep to it,rather than agree to a larger sum and then default.But I must emphasise that once you have agreed to a mutually satisfactory repayment plan,you must stick to it.

Contact the Benefits people and make sure you are getting all your entitlements..your income is very low.

Easier said than done,I know,but try not to panic,you need to be thinking clearly.Don't go down the bankruptcy route,I think you're a long way off from that.

Oh...and you have cut up those credit cards,haven't you?

Good Luck!

Marisan.

JAMIEDODGER

you should recieve child benefit, who gets this?

saucyxx

list your SOA.This is always a good exercise and may surprise (or shock) you.

I wrote a list of all incomings and outgoings last month... it was a shock! according to what I worked out, we have more going out than we have coming in.

Contact the Benefits people and make sure you are getting all your entitlements..your income is very low.

Its not that our combined income is really low... we just have too many outgoings to keep on top of. We cant claim any other benefits because my partner works full time. I rang the benefit people last week and they said on paper, we earn enough to live.

Oh...and you have cut up those credit cards,haven't you?

Oh yes, I did that about a year ago lol

you should recieve child benefit, who gets this?

I receive £68 a month child benefit, But that pays for my car insurance, nappies and bits and pieces my son needs.

Going back to my origional post... would changing my car log book to somebody else stop them from taking it if the worst came to the worst?

Debt_Free_Chick

They won't and can't take your car, so stop worrying about that.

Somehow, you have to find the money to make some repayments towards this debt. You can really only do this by reducing what you spend on other things or increasing your income. This is why Jamiedodger asked for your SOA - we may be able to suggest areas where you can cut your spending and so free up some money to pay towards the debts.

It would be helpful to see your joint SOA so that it includes all the bills that your partner pays. Some things you could cut out (at least until your finances are sorted) include Sky TV (for example), duff insurance (like PPI or appliances breakdown insurance), savings, charity donations, pension contributions.

Savings might be possible on utility bills, food, nappies etc.

Income - could you take in ironing locally or even work part-time (not an option if you then need to pay for childcare, though).

If you let us see your SOA we can be more specific based on your circumstances.

Regards

Debt_Free_Chick

saucyxx wrote:

IMy postman has just been and i have a letter from style finance, looks like they sent the other letter before they received my form thing. They have reduced my payments from £60 pm to £20.75... its a start i suppose!.

But only if you have £20.75 to send them. When you sent them the budget sheet, did it show that you have money left over to pay your debts?

Can you post a copy of what you sent them please?

saucyxx

Debt_Free_Chick wrote:

Income - could you take in ironing locally

If you let us see your SOA we can be more specific based on your circumstances.

I do ironing already, But i use that money to live on, petrol for the car and such like. I will type up my SOA and post it on here...

Thanks for your help

fairylights_2

I don't honestly think at this stage that trying to "hide" your car is a necessity. Nor is bankruptcy for such a small amount. I'd suggest you go to citizen's advice and get them to help you. £2000 can seem like the world when you don't have a lot coming in, but it'll put you below the radar of most debt repayment companies. (I believe even CCCS and Payplan, who are the free debt help people). Explain to the CAB your situation and they might be able to help you write letters to your creditors giving them notice that you'll be on reduced payments. Is £20 a month manageable for you? I assume the second card will be about the same payment, but if your income is only £40 ish a month and that's going straight out on your card, will you be able to manage?

Also, now you've done your budget, can you see if there are areas where you can cut back? If you continue to overspend you'll be in even more debt by then end of the year - £100 monthly overspend a month makes £1200 more debt by the end of the year.

What about a part time job? I work from home doing a job I enjoy around my two under fours - it means I don't need childcare and still have a bit of cash coming in.

Otherwise, £2000 debt, paid back £40 a month means (guessing on an APR of 20%, since they're obviously not very nice people) you'll be paying back until 2015. 2010 if you can get them to put a stop to the interest. If you could find another £40 a month to pay it off (totalling £80) it would be 2008, which is only two years away.

Good luck - you're obviously on the right road, it's just a case of getting there!