Beginning to miss repayments - how to do this

col45

I originally posted this on the credit card forum and was directed over here ...

I currently have a limited income (self-employed) which may or may not improve in the short-term but I'm assuming (for my budget) that it won't.

I have a few credit cards plus a cahoot flex loan. And I'm running out of cash. I've never missed a repayemnt before but think I will start doing so this month. Seems silly to fund debt repayments from what's left on my cards!

What is the best way to approach this?

Payments are by direct debit so I'd need to cancel or adjust these. I could offer a [much] smaller payement.

I guess its best to be straight-up with the lenders.

How long may I have before they start to get awkward and I have to have some sort of debt management plan? I know its hard to say but will I get a couple of month's grace or will it get heavy as soon as I miss a payment?

Many thanks.

Kudox

Hi, My DH is in your situation, self employed etc and is a couple of months into paying token goodwill payments of £1 after contacting all his creditors to let them know the situation.
Buy yourself some time by doing that, most will probably want you to fill out a budget sheet to work out what you can afford to pay.
If you face up to it sooner rather than later and let them know you are struggling they'll be more inclined to give you some leeway, thats what we've found anyhow.
Hope that helps.

RAS

Put up a full SOA here http://www.makesenseofcards.com/soacalc.html and format for MSE, so we can help you more effectively.

col45

Thanks for the responses. Since I posted the question my income has increased for the time being which makes my position less urgent.

However,
I seek clarification on approaching lenders to reduce payments for, say, 3 months to allow me some breathing space and until my Housing Benefit comes through I spend everything on rent & living expenses.

I would like to make arrangements with MBNA and Cahoot. Repayments are about £250 and £220 respectively. I would like to offer them £50 each for three months. If things haven't improved by then I will enter into a formal arrangement.