What to do ?

1066wasabadyear

Hello all, well its finally come, I have run out of money to pay my bills (CCs) for the first time ever in over 10 years this month and I've not got a clue what I should do, I'm self employed and been claiming JSA since October 09 I've had a DCA after me for purchases I never made or agreed to I'm not worried about them but I am over the credit cards, usually I ignore them but I don't think it will work for the cc, so please any advice as to what I should do would be great, thanks, Gary.

DisgruntledGoat

Hi Gary. From what you've written it's hard to give detailed advice, we really need to see a "Statement of Affairs" to see what the situation is - there's a calculator here

http://makesenseofcards.com/soacalc.html

The key question is really if you expect things to pick up in the short term, or if you're likely to remain unable to pay the cards. Don't ignore anything (tempting as it is), if necessary offer a token payment to the cards, even if it's just £1, rather than ignoring the bill and paying nothing at all. And if you don't recognise the debt being chased by the DCA you need to write to them to ask for proof that you owe the money.

IVAs - as widely advertised at the moment with "you can write off 70% of your debt" slogans - are unlikely to be a good option. They're widely advertised because they're profitable for the people arranging them, not because they're good for you...

1066wasabadyear

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 256
Other income............................ 0
Total monthly income.................... 256

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 30
Management charge (leasehold property).. 0
Council tax............................. 5
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 13
Mobile phone............................ 0
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 17
Groceries etc. ......................... 15
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 120


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1
Other assets............................ 0
Total Assets............................ 1

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
c card.........................7334.4....216.......20.1
c card.........................5101.2....114.......8
Total unsecured debts..........12435.6...330.......-


Monthly Budget Summary
Total monthly income.................... 256
Expenses (including HP & secured debts). 120
Available for debt repayments........... 136
Monthly UNsecured debt repayments....... 330
Amount short for making debt repayments. -194

Personal Balance Sheet Summary
Total assets (things you own)........... 1
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,435.6
Net Assets.............................. -12,434.6



I don't know what assets are, most of my possessions are tools and equipment for work including a van.

1066wasabadyear

Think I got that all wrong

As for things picking up I doubt it very much as last year I had no work till June in fact I had less than 3 months of paid work for the whole of 2009 perhaps I should just let the creditors do what they will as I dont own anything and credit ratings mean nothing to me ?

DisgruntledGoat

Worth trying to get the SOA broadly right, doesn't need to be 100% accurate, as it's a useful tool to have. On an income of £256/month benefits (have you checked entitledto.co.uk to make sure you're claiming everything?) it's going to show that you've got no money to pay anything, and that's what you need to show the credit card companies.

Then send them a letter like this one:

Dear XXX

Re: account number: 12345678912345

I write to inform you that due to my current financial circumstances I am unable to meet minimum payments on my account.

I enclose a statement of affairs detailing my current income and essential expenditure, along with my creditors and the amount outstanding. You will note I have a disposable income each month of £xxx, from which I must deduct £20 per month for emergencies.

I propose a payment of £1 per month towards the debt, and will increase payments in the event that my financial circumstances improve. I would be grateful if you could freeze interest on my account during this period to enable me to resolve the matter more rapidly.

Yours...

And enclose a cheque for a pound. They'll not like it much, but there's fundamentally nothing much they can do if you don't have any money (the could bankrupt you, but there's not much point).

1066wasabadyear

Thanks DG, maybe I should sit down and do a comprehensive a list of what's what and go from there.

DisgruntledGoat

That's a good idea - it comes as a shock to the system (been there, done that) but get it written down and sent out to the cards, plus you need to tell the DCA that you don't recognise the debt they're chasing. Main thing is to show them that you can't pay, not that you won't pay - if you ignore the letters then they'll assume the latter. They're usually more reasonable if you're talking to them.

1066wasabadyear

Many thanks for taking the time to help me DisgruntledGoat and those that offered advice and words of support via pm's thankyou.

I had a conversation with the nice folks at CCCS today and they recommended a solution which hopefully, I'll have the nerve to start and see it through. The nice lady swept away the fog to reveal an horizon that was thought lost.

It really is good to talk.

1066wasabadyear

Hello all, back again

Any ideas how long it actually takes to be taken to court ?

Tixy

Hello

Well that is a how long is a piece of string question.

Some creditors sometimes act very quickly, deciding to take court action soon after you default. You could in theory get court papers within say 2months of a default.

Some creditors will never take court action, either because they have deemed the amount to small to be worth the court fees, they are not sure they can prove the debt or have the correct paperwork, or because they think it will be more profitable to sell the debt on to a third party debt collector.

Mostly you can guess it will be quite some time after the first, second and probably third letters stating this is your 'last chance', 'very last chance' and 'really we mean it this is your last chance'.

Assume you haven't had court papers through?

1066wasabadyear

Hello Tixy, no, no court papers that I know of, letters in March gave 7 days to pay or else and its been more or less the same since but not as frequent although I have lost count how many letters I've received.

Made my last payments in December last year so would have thought it dealt with by now.

Do you think having had no contact with any DC has something to do with it ?