Increasing Debt - advice on what to to

miket1964

Hi All

I'm self employed and sales over the last few months have taken a big hit, seems to have been worse since the general election, I have also lost my two biggest clients due to their cut backs over the last year, so my turnover has dropped considerably.
I continue to market and chase leads to try and recover these lost customers, but its proofing very difficult to gain orders.
I have only been drawing about half the wages we need, which really is not enough, but my credit card debts are a real problem, I am struggling to pay the minimum each month.
I have just added up the total amounts I owe which comes to just over 11K, one card is charging £100 per month just in interest.
I have not used any of these cards in over a year, so its just paying off the balance that is the problem.
Any advise on how to tackle this greatly appreciated.
Mike

WRINKLES

How old are your debts ,have you defaulted on them, are they still with the original creditor ,to help we need more information .

NorthernLas

Mike - As wrinkles says to give appropriate advice more information is needed.

It depends on whether your debts are personal or business and whether they are in your sole name or joint.

There are lots of options ranging from
- carrying on by trimming your household budget and upping your income
- negotiating reduced payments yourself
- getting one of the debt free charities to help you negotiate payments and paying them each month
- a IVA more formal arrangement
- bankruptcy

Have a look at the debt options from the national debtline http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_paying_back_your_debts

If you want to fill in your income and expenditure and ask advice on where to cut corners use http://www.makesenseofcards.com/soacalc.html and post the results back to this thread.

miket1964

Yes all the debts are with the original lenders, yes I have missed payments, so would be impossible to move the debts to a cheaper rate.
Also missed a mortgage payment which adds to the bad credit rating.
With regards to paying myself, I do not have enough funds in the business to draw wages that we need to cover our family outgoings and pay my personal debt also.
Yes been striving hard to increase sales which = more income, people are reluctant to spend or progress projects at the moment, my business is design, print and web.
Thinking off selling the car, its only worth 4K, and would need to spend half of that to get something semi decent, but the 2K would pay off one of the cards.
Thanks for the pointers.
Mike

WRINKLES

MY ADVICE WOULD BE ,DO NOT MISS MoRTGAGE PAYMENTS ,first pay your priority bills ,utillity bills council tax and any other s ,buy your groceries , if you have already defaulted on cc payments and others ,then your credit rating will already be shot ,if you make further defaults then your original creditors will eventually sell your debts , or pass them to a debt collection agency ,remember it is not a criminal offence to be in debt . i would offer a token payment to your creditors ,eg a pound a month . they will move them to a dca . you still have not said how old your debts are or who with .

NorthernLas

Mike - I'm sure you are aware but your priority debts like mortgage, utilities and council tax are much more important than paying your CC.

If you have a go at the statement of affairs then you will have a much better idea of your situation and you can enter it into CCCS online debt remedy today to give you their opinion.

You can post it on here and people will suggest things that you may not have thought of. There may be areas that you can cut back on like shopping or switching utilities that are relatively easy.

By what you say about your debts you have late payments but no defaults.

Ames

Have either of the credit cards increased the interest since you last spent on them?

miket1964

The credit cards in question are Cap One, Barclays (used to be Sky), RBS and Egg. None of the cards have been used in over a year, before the downturn things were manageable.
The balance is increasing due to interest, not me spending on them. The Cap One has the biggest balance at over 5K
One of my main clients has cut their work to me from 16K a year to 2K this year, a big hit, without warning and a huge amount to fill.
The debts vary from 18 months to four years old. No I have had no default payments just late payments, but they are possibly on the way.
Yes I think they have put up the interest whilst trying to pay these off.
Thanks for the advise all - I will look at the two links posted by Northern Lass and post the results.
Mike
Mike

Ames

Well, if they put up the interest then you have an option to opt out and not use the card again, so you might as well write and try and get that done retrospectively, you might not get anywhere but there's no harm trying.

How many of the cards were taken out before April 2007 do you know? And of those, how much debt is on each one?

WRINKLES

Hi mate please answer the questions asked by A mes they are important.

miket1964

Hi
The Cap One and Sky (now Barclays) are the oldest I have had those two a long while, I would say before 2007. What does this imply?