Credit Card defaulting

Deepmistrust

Is this the only way I can get my bank to stop the interest? (Previous negotiations resulted them reducing interest by a measly 3%, they won't go lower).

Balance £4000, I want to pay it off, but everytime I pay £100, £70 goes on interest.

I can no longer afford to pay £100 every month (circumstances changed), but even if I could it's demoralising when I see only £30 come off the balance.

Been to CCCS, who advised IVA (taking into account other loans too) a bit drastic IMO. I only want to reduce the payment a bit, and stop the interest.

Bank says that after 6 months of being paid token amount (currently paying £40 pm for the last 3 months) below minimum payment, that it will automatically be passed to Debt recovery agent, then I should be able to negotiate a payment plan with zero interest.

I'm aware of the impact on my credit file (am beyond caring about my credit rating now).

Can anyone tell me if I'm missing something here, this sounds like my best option. Pro's/Cons anyone?

property.advert

Obviously you have to think of it in context with your other debts. However, if you are going to end up in a position where the bank sells it off for say 20/30% of the value to a third party, then what point is there in paying anything over £1 a month if they will not halt the interest ? Cripling yourself to pay something which will only marginally reduce the overall total and not improve your credit rating seems pointless.

If you can get out of it before that happens then all well and good but if you cannot, then you are going to have to think about trashing all the debts and getting some settlement plan on all of them, with frozen interest. In the meanwhile you can conserve the cash which is currently being used to finance the debts at full repayment.

It is a tough call to accept that you will trash your rating for 6 years but if you don't pay this one, you are trashed anyway.

Why not post up a SOA which lists all your income and outgoings and you and we will be able to see just how much fat can be trimmed from the bone ?

Congratulations on realising that you cannot keep shovelling the proverbial up hill.

happyhaddock_2

Brill post PA!, that's exactly what we had to do. Had a previously exemplary credit rating (what got us in trouble in the first place!) but after a bad month in Jan we realised that we could no longer carry on struggling to service our debts at the minimum amount.

We are now on a DMP with CCCS and can sleep at night, yes we've trashed our credit rating but can't ever see us wanting to get credit again.

By the way CCCS told us that even if we couldn't afford our minimum repayments by £1 it meant that we couldn't service the debts and you have to look at the whole picture, we only struggled with two CC's everything else was up to date, but it meant we couldn't afford all of them.

Deepmistrust

Thanks for the replies.

But the reason I don't want to go into an IVA or DMP, is that one of my larger loans (£277 per month) only has another 18 months left to run.

So if I can make a repayment plan for the CC for now, come end of next year, I'll be much better off and be able to chuck more money at the remaining debt.

I think I have to give this a go, before I resort to IVA's etc.