Please help/direct me on how to get started: Communicating with Creditors

Drbob08

Hi everyone,

I have some debt spread around and up until this point I've been scraping by paying either minimum repayments - or close to it.

Unfortunately due to personal circumstances I no longer have income from my two part time jobs and therefore will be on basic benefits £51 a week or there abouts.

I'm really worried about how I am going to pay my debts.

I have as follows

£300 Overdraft - Accruing interest at £1 a day :eek:
£300 Overdraft - Accruing interest at an unknown rate
£81.90 Catalogue - 29.9% interest
£61 Catalogue - 0% interest
£35 Store Card - 29.9% interest
£390 Credit Card - 30.9% interest
£24 Loan - 0% interest

And with my phone bill and dig money on top of these minimum repayments I will be unable to meet all my payments.

I've heard that you can pay 'token' payments to companies when your finding it difficult to meet repayments and that sometimes the interest is frozen etc...

Could someone advise on how to do this - or link me to articles or perhaps threads?

And if you do this, does it affect your credit rating?

thanks

Tixy

Hi

If you cannot meet your minimum payments then yes it will affect your credit rating. If you pay less or just token payments for more than 3months you are likely to end up with defaults on all your debts. These will stay on your credit file for 6years and will affect your chances of getting anymore credit in that timescale.

That said people often have no choice and still need to offer just token payments (but its worth being aware of the implications).
If you are on benefits then its quite likely you won't be able to afford more than token payments of £1 per month.
You could either have a read on national debtline website (they have some useful sample letters etc) or you could speak to one of the debt charities.
You can ask for interest to be frozen and some creditors will do this really quickly, others may never agree to it.

First thing (before sending out any letters) is to set up a new bank account with a bank you don't owe any money to so that you can have your benefits paid into there. That will save your bank removing your overdraft and swallowing up your benefits.

Back in a sec with some links.....

.....debt charitie https://forums.moneysavingexpert.com/discussion/2077631
national debtline http://www.nationaldebtline.co.uk/england_wales/debt_advice.php
holding letter for one month whilst you seek advice/formulate a plan - http://forums.moneysavingexpert.com/showpost.html?p=21937969&postcount=52

Drbob08

Hi Tixy,

Thanks ever so much for your reply.

It is unfortunate that this will affect my credit rating because, although I've missed a few payments in the past, I believe I have a fair credit rating.

thanks for the links - I'll have a look at them and also fill out an SOA aswell.