Where do I start?

WorriedByDebt

Hi,

In a nutshell, non-mortgage (unsecured, mostly credit cards) debts of about £35k. No equity in our mortgaged house. Struggling to meet minimum repayments on credit cards.

Mortgage, council tax and utilities are all up to date so far.

I'm in the initial stages of making contact with CCCS, but worried about the long term effects on the credit rating. It seems, from what I've read, that agencies like CCCS negotiate with creditors to accept reduced payments. I've tried to call them in the past to see if they could lower the interest rate, but stupidly, if you've got a patchy repayment history, they insist on a higher interest rate!!

What do CCCS et al do differently to get a different rate? Or does it just depend on who's doing the asking? What effect will such an agreement with creditors have on my/our credit rating?

The annoying thing is that if I could transfer the lion's share of the debt to an unsecured personal loan (25k) at a decent commercial rate (8-9% say) this would make a huge difference. But I can't seem to get a loan from anywhere at any rate. Is that a reflection of the credit market or is my credit record really that bad?

We don't owe anything like loans for our cars (which are worth about £8k together), they're paid for. We both do mega miles due to ex-partners and children in other parts of the country. It would be a false economy to sell them and buy a couple of junkers.

I reckon my former bank owe me around £4k in current account bank charges but can't take them on at the moment as I still owe on an overdraft with them and also have credit card debt too with them. I can't afford for them to pull the rug out from under me when I claim.

Thanks, all advice welcome.

poorandindenial

Hi there

CCCS don't just ask for a reduced rate, they set up an agreement with the creditors for reduced payments and often can get the interest frozen. the deal is that you enter into the volutary agreement, your credit history is knackered and you agree to not take out more credit for the duration of the agreement.

The key reason they do better is because the agreement is across ALL creditors and because they are trusted by the creditors to take a view of what is affordable for you and therefore they are more likely to get their money back in the long run.

you can do exactly the same thing yourself by putting together your SOA, working out how much you can pay per month and pro-rataing that towards your debts and writing to them all to set the agreement up.

Put together a statement of affairs (SOA) and post it up here and we can help you see where you might be able to make your money go a bit further.

All the best

WorriedByDebt

I've completed a Debt Remedy with CCCS and they're recommending a Debt Management Plan. I'm very wary of making a wrong move at this point.

Do they do face to face contact?

What happens if my circumstances change in the future and I can't afford to meet the voluntary agreement I've made with CCCS?

What would happen if I wrote to creditors myself and asked for simply a reduced interest rate? Would this still be technically a voluntary agreement and kill my credit file?

also the DMP material also talks a lot about still being chased by creditors, including court action. I'm a bit worried about this and wonder if it's worth the hassle?

Can anyone offer me their own experience of DMP etc?

Thanks,

Worried.

GeorgeUK

Posting up a SOA would definately help.
http://www.makesenseofcards.com/soacalc.html

There may be savings you can make or things you can cut back on.

My debt was about the same as yours and i would never have been able to repay it had it not been for Virgin and their reduced monthly payments. That and th 0% APR has really helped.

Do you have any CCJ's, defaults or late payments? If so how many and how long ago?

You can see your credit file free at Experian (if you cancel within 30 days).