How to sort this flaming debt out! GRRR

gregdedman

Hi there everyone,

Ok, so this has been hanging over my head for FAR too long and despite looking for ways out of it, im only a little better off

ANY help would be so appreciated, thanks in advance.

Ill try and be breif.

Nationwide loan - Loan term finished, now paying £100, on reduced payment plan, at 7% interest to KPR debt recovery to clear arrears. Normal monthly payment £250, left to pay - £1400

Nationwide overdraft - £280 - reducing payment plan £40 a month

HSBC Credit card - limit of £2500 - balance, £2070. Minimum payment is £50 (ish) im paying £70 at an increased interest rate of 28.9%, up from 24.9 a few months ago!!

Total debts of £3750

Im on very low income, £400 a month, and can meet my minimum payments plus a little on top, but im worried.

KPR have been reasonable for 2 years now accepting whatever I can offer but they keep saying that my arrears are increasing...surely my arrears are falling paying £100pm, although I know 7% of that is interest?

My credit card upped my interest rate to 28.9% and its crippling me.
Ive written twice, asking for a lowering of my interest, instead of trying to 'retain' me, they said they would lower the rate to the old rate but I had to close my account.
Is it worth asking to freeze my interest? or should I just accept their offer and close the card?

So, my 2 questions are;
Are my arrears with KPR still increasing? Im sure their not (but im not 'number' savvy unfortunately)

Whats the best course of action for my CC? Accept their offer or ask again?

I have to apologise for the small size of my debt compared to a lot of other people, but its been with me for 3 years now and I need a way forward.

What should I do?
I should add, im a UK citizen, working for a UK company, but working as a Seasonal worker in Italy as the only way to get work!....Could I be entitled to any benefits for low incomes?

Any help at all would make my day )
Thanks guys.

Greg

Tixy

Hi

Re KPR it doesn't sound like the debt is increasing - but I would request a statement so you can see exactly what interest they are applying and whether they are also adding any charges.

Regarding the cc - if you want to retain the previous interest rate you opt out of the increase, which at the same time stops you from using the card further. I would guess at that sort of APR you don't want to be spending on the card anyway - so I would think it makes sense to accept the offer - bit of info here on your rights etc -
Reject credit card rate hikes

Karmacat

Hello Greg! Good for you for posting - and as to size of debt, its hanging over you, you don't like it, nuff said.

KPR - have you seen their figures in black and white? It doesn't *sound* like your debt should be increasing, if a new repayment schedule has been agreed at that rate, but if they're saying it, then ask them for the details in writing - and if necessary, copy the letter onto here, so others can take a look, if you're not confident of your own numbers ability.

If you've already asked twice for your rate to be lowered on your credit card, there's not much chance they'll agree. By all means, ask again, but lowering to the old rate and freezing would help you pay it off - and you *really* want that paid off asap, thats a horrible rate of interest.

As to what you might be entitled to in the way of benefits, I'm doubtful because you're working abroad, sadly, but you might be, I don't actually have any knowledge. The government website to check on this stuff is https://www.entitledto.co.uk (which has become turn2us or something, but its the same thing) - its a registered charity.

Would it help to post your budget, your incomings and outgoings? There's a link to do it, I have no clue where these days, hopefully someone will post it on your thread.....

good luck! And keep posting.

tbourner

Does it say anything else about the 7%, like is it a flat rate or monthly or something? I doubt it's an APR rate if you're increasing your debt!

gregdedman

Thanks for replying guys!

KPR have been understanding but vague about what im paying off and at how much.
I called them to arrange a new 6 month payment plan and they tried to up it of course but I said I couldnt.
The lady wasnt interested in talking to me after I said I couldnt clear the arrears, and almost as a throw away comment said i was paying 7% interest after I asked....never even knew I was paying interest, no paperwork recieved as far as I could remember.

I specifically asked for a statement to be sent detailing all my payments, alas, a new arrangement letter was sent, but no statement.
Surely they should provide me with a staement if i ask?!

Anyway, basically, no mention abaout the APR anywhere on my paperwork, just word of mouth, I have to ring them and request again a statement.

Feels a bit wishy washy to me.

I can try and look for the budget thing you mention, although I have one done already, after my reduced payments, and £40 a week for food Im left with £10 a week to live on....my job pays richly in experience but poorly on cash!

Thanks again for all your help so far
Your all making my day....i love 'the fight' and the information as to whats right and wrong helps tremendously.

Regards
Greg

Marisco

Hi Greg, when you deal with any of your creditors, always put it in writing, not phoning. That way you have a record of everything that has been said and done:)

gregdedman

Hey Marisco,

I will from now on, its just hard as im working in Italy. Will email suffice as written proof?
Long shot question, does anyone know if an email for KPR? Ive searched but no avail.

persian_star

In regards to the credit cards, that we can opt out of the rate hike is a godsend - i have 3 cards and have had rate hikes on 2, so opted out, and because of no longer being able to use them (as is the condition of opting out) I just watch my debts get smaller every month, which is great. It's a struggle, but in the end I know there's only so much I can spend each month which forces me to pay off my debt, which is brilliant. Can I also recommend http://www.whatsthecost.com/ if you're lost about what to pay off when.

I have to say when I opted out of the rate hike with my HSBC card, I did it on the phone, and because they recognised that I was trying to pay off my debts they actually took my APR down from my normal rate of 18.9% to 6.9% for six months. It's always worth telling them you're really trying to get out of debt and asking if there's anything they can do to help. Good luck!

undaunted

Yes you should stop using the credit card immediately. You appear not to be repaying creditors pro rata (ie payments made to be in relation to size of debts) and to be paying above the minimum payment on and possibly also reusing the credit card (?) if I understood your post correctly. There isn't a hope in hell of you getting anything done with the interest on that basis!

Your credit card, unsecured loans etc are not a priority debt (eg mortgage or secured loans, utilities, court orders or fines, taxes etc) & indeed food should be at the top end of your list not the bottom. (if that means nothing left for your creditors that is unfortunate but no court in the land would condemn you for eating should they choose to disupte that!)

What you need to do is work out your incomings & outgoings, what you have left for creditors & then divide it fairly between them.

Alternatively should you have minimal assets (not a home owner, car of less than £1000 in value, £300 or less of any other assets) you may be able to apply for a debt relief order which could see these debts written off (you can see the CCCS website for more info. or they have a section on this board should you prefer to make contact here)

The 7% interest for someone on an income of £400 p/m, lack of clarity on what that 7% is (APR, monthly, annually? etc), statements etc does not sound to me like they are necessarily being as reasonable as you think they are!

According to a quick google KPR may even be an inhouse nationwide owned company? If the debt has not been sold on Nationwide should be able to provide a statement either way. Your arrears could be increasing even if the balance is not - but it's a play on words really as basically they may merely be saying that you should have paid it all back on x date and are now an extra week, an extra month, an extra year behind schedule etc even though the total outstanding may be falling.

Given the way things have evolved & a likely resistance to change from each creditor I would suggest that you now approach a third party to establish the full facts and negotiate with these people for you (eg your local citizens advice bureau, Community Legal Advice Centre or the Consumer Credit Counselling Service http://www.cccs.co.uk/ will all help you with this free of charge)

Good luck

Karmacat

Ooh, I like that post from undaunted. I absolutely agree that their vagueness is completely unacceptable - they sound like they're just hoping you'll go away, and if thats true they're bound to be trying to diddle you ..... at the very least, I'd say get everything in writing - be professional, be polite, and be prepared to go to the cccs.

Fiddlestick

gregdedman wrote: »

My credit card upped my interest rate to 28.9% and its crippling me.
Ive written twice, asking for a lowering of my interest, instead of trying to 'retain' me, they said they would lower the rate to the old rate but I had to close my account.
Is it worth asking to freeze my interest? or should I just accept their offer and close the card?

Yes that's right - they are a business after all.

You can opt out of the rate increases, but you need to close the account and then repay at the old rate.

If you want to keep the card open, you need to accept the new rate.