Struggling to pay off cards and loan

Libbyd

Can I write to them and offer what I can afford? will they accept that or do i have to go through a legal route?

Faye449

They wont like it but they might not have a choice. Your best bet IMO is to contact CCCS or payplan and get free professional help! Have you posted a SOA up yet?

Tixy

hi Libby

If you cannot afford all your minimum payments then you can offer reduced payments to your creditors. You should offer them all the same pro-rata based on the balance and ask them to freeze interest & charges (they don't have to but some probably will if they believe you cannot afford the payments and are not spending excessively on luxuries). But you do need to be aware it is likely to affect your credit score for up to 6years (as they will likely default you on your credit file).

And potentially they could decide to take you to court (although even then you may still be able to make reduced payments once the judge has seen your finances).

But even if you do decide to do a self managed DMP you are probably better speaking to one of the debt charities first for advice - IMPORTANT - Where to seek professional impartial advice about your debts.

it also might be useful to complete a statement of affairs to see if people have suggestions on how you can afford things better and whether a DMP might be suitable for you - http://www.makesenseofcards.com/soacalc.html

You also need to be aware if you have a current account with the same bank as one of your creditors they are allowed to offsett money from your current account against your debts (take it out automatically). They are also likely to close any overdraft you have with them and recall the outstanding amount. If you do have a bank account with a creditor then it is advised to open a new account elsewhere first.

Libbyd

Thank you for your help.

I contact Payplan and they said we would have to give all our free money (£500) for 6 years to clear our debt. I think with 3 kids this really isn't going to be possible:-( Can I do anything about this?

A company called Harrington Brooks have offered to help and pay them £300 a month, but hubby isn't so keen on paying them a fee and has looked online and read bad things.

If we go to court we wouldn't get sent to prison or anything would we?

bottleofred

Hi libbyd,

No, you are definately not going to be sent to prison for bad debts. Your best course of action really is the dmp through payplan or the consumer credit counselling service as all the money gets paid off the debt. I would strongly advise against going with a fee charging company even if they are letting you keep £200 per month, but it's up to you really.

podperson

You can't be sent to prison for debts. Worse case scenario if they do take you court they will ask for a ccj which means that the courts agree that you owe them the money and you have to pay it back. The courts will ask you to provide an income and expenditure form and will only order you to pay back what you can afford. If you are on a debt management plan then this payment would just come out of it the same as the others.

Marisco

Hi Libbyd, no they don't send debtors to prison any more;) When they say they want all your free money, I think they mean you have to be reasonable about things. Like don't put £100pm for holidays and £100 for entertainment etc. But with clothing etc you have to allow for school uniforms and so will they. If, after doing a DMP any of the creditors do take you to court for a CCJ, the court will not award them any more than you can afford to pay. In my oh's case, it was way less than what they wanted:) You will get defaulted (for paying less than agreed payments) and it will trash your credit rating. Good luck
P.S. Do NOT pay for the service, go with a free one or DIY!!

Libbyd

Thank you all.

Is it possible to sort this yourself, by writing to your creditors and arranging a monthly payment?

podperson

Hi Libby,

Yes you can sort it yourself. First thing to do if you haven't already is to make yourself a budget or a statement of affairs showing your incomings and outgoings. This should then show what you have left at the end of the month to go towards the debts (also if you want to post it on here then people can often offer advice on areas where you might be able to save money).
Split this money between your creditors and then write out to them and offer the amount, there are template letters on this forum and on National Debtline website to help with this, make sure you ask them to freeze interest and charges - some may, some won't, but you don't ask you don't get. If you can include the first payment with the letter.
Some of them will refuse this and say they want more, just stick to your budget - that is all you can afford so that is all they can have! Make sure you keep making the payments even if they say they aren't accepting them, cause they will always cash a cheque. When they are getting regular payments most do quieten down, there are an odd few who might be gits and try and get a ccj but the court will not force you to pay anything you can't afford.
If you want help with it you can get free advice from debt charities such as cccs, cab, national debtline - cccs and payplan will also run your debt management plan for you if you would rather go down that route.

nanna58

HIYA
just had a read of Saltnvinegar thread have a look may inspire you also

dancingfairy

Libbyd - hi. You need to tackle any priority debts before doing a dmp - ie rent/mortgage, council tax, electric/gas etc.
The only debt that you can be sent to prison for is non-payment of council tax and this is very very very rare and is for those people that try and not pay anything towards their council tax ever and are trying to dodge it - not for genuine people that are struggling.
df