Im poor trying to clear Credit card debt

doug81

Hi Guys

This is my first post I have looked for some answers but nothing very obvious for my situation sorry if this was covered and I missed it.

I had a business that has recently gone bankrupt or liquidated and has resulted in my racking up lots of personal debt as I wanted to pay staff for work done etc and there was no money left in the business.

I now have over 15k on Credit cards and I am behind on my mortgage. I feel the most important payment is to get my mortgage back in line which I will be looking to do first.

Now I have a lot of other payments that I am behind with some have been sent to debt collections agencies and they are sending me the pay in 7 days or we will kill you emails. (Always find those strange if I could not make minimum payment how can I pay off the whole balance in 7 days)

Anyway one of those has offered me a settlement of £1700 against £3000 owed now I am sure this being the first offer I could negotiate a much lower deal but wondered how low it could really go to would they take £500 to clear the debt?

Also I have a default against my name for that payment they said if I pay the £1700 the default would be removed but it would show I paid it off but less than was due. So what is better to a defualt or a mark against my name saying I paid less?

I have mobile phone bills with similar companies for about £300 would I offer them £75 to clear that also these have defaults against my name so would it be better to get some money together and offer less to all my creditors and try and reduce my debt to £0 and start again. Or do I pay small amounts but have debt for many years to come.

Its worth mentioning I have a mortgage but this has a charge against my house for 30k from the failed business meaning there is no equity in my property I can use.

I also have 2 other properties with a Friend and dont want to use those to pay off debt.

I want to get back in a position so when there is a upturn and I earn some good money again I can look and buying a bigger house for family etc.

Thanks for any tips guys my mates have been helped by this site alot so fingers crossed for me.

dmg24

So you want to keep your two properties which have equity in them, but avoid your debts?

doug81

Yes I do not want to go Bankrupt its frustrating to have all this debt hanging over me I dont have anyone to blame but myself I wish I had a company card I could have used but did not. So trying to do the right thing and pay people there money has not helped me out.

I want to get advice on offering reduce payments to cards that are with collections companies that have defaults

dmg24

Do you have equity in the two properties? Do the cc companies know about these properties?

doug81

I do have equity but im not in a position to remortgage to get it out. I dont want to sell them as they are with a Friend and they are really my future so need to look at ways to dealing with problems but keeping them.

I dont think the Credit Card Companies know about them or if they do they have not mentioned them.

Because I missed payments and they sent them to debt collections agencies this is why when they offered reduced rate I was thinking it could be an option for a lot of the problems I have.

Thanks for your input

dmg24

I would suggest being honest with the debt collection agencies and telling them that you do have the money to pay your debts, but the money is currently tied up in property. I am sure they will be able to help.

SwissLe

Whilst you are probably aware of this, your decision to pay staff using your personal funds (or credit as it may be) was suicide. They won't remember you for doing this, they are also responsible for the failure of your company.

If you do not have any money, you don't have many options. You need to seek debt advice from one of the charities listed on MSE. A default is probably better than a settled account, but multiple defaults are not. It doesn't sound like you have funds coming very soon. I doubt they will accept £500 in settlement, but depending on the lender there will be movement in the figure given. Where are you going to get the settled figure cash from though?

MrsTinks

If you have mortgages for the properties then your creditors know about the properties... sorry.

As for Full & Final offers - how long is a piece of string? There is NO rules for what a creditor will or may accept. If however they feel they have a good chance of getting the full debt off you they will have NO morals about taking out CCJs against you... if you fail to pay those then you could be looking at charging orders against your properties...
The defaults... you can negotiate these to a degree - the more of your debt you offer the more likely that a creditor will mark it as settled rather than partially settled - both are better than a default which haven't been settled.
Alternatively you could start a DMP and arrange a gradual repayment of what you owe to your creditors...