Struggling to pay off cards and loan

saltnvinegar

Hi Libbyd

Welcome to the forum, you're going to find loads of help and support on here and you've made the first step to a debt free life.

:T

I was (and I guess still am to an extent) in the same boat as you, I'm just a little further down my journey to being debt free!

From my own experience I would not under any circumstances go with a company who:

1) Takes a fee from you for 'sorting' out your debts. As you've already found there are charities who will do it for free, or you can go it alone at no cost to yourself with a little help from people here!

2) Ask you to claim that you would only have to use three-fifths of your surplus income for your debts.

Let me explain my reasoning on that last comment. A DMP is not a magic wand, and more importantly, even done through someone like CCCS your creditors are under no obligation to accept it, can still pursue you for money or even take you to court.

If you go with a company that is encouraging you to 'hide' surplus income then all it means is you are going to take much longer to pay off your debt (and no doubt earn them more commission too)

The other problem is should (read highly unlikely) a creditor take you to court and you have not been entirely honest on your disposable income the judge will not take kindly to this and you could end up having to pay more.

However if you have been entirely reasonable and honest in what you can afford to pay and offered such if your creditors take you to court the tables are turned and a judge is likely to look less favourably on them.

The key here is be realistic in drawing up your SOA and prorata payments and you can then go into battle with your creditors knowing that the worst they can do is get a CCJ against you which will force you to pay no more than you could afford anyway.

I'd suggest having a good read around the forums also to help you better understand your rights (and also the rights of your creditors and debt collecting agencies, which are effectively none) so they cannot play on those fears such as 'Is it possible to go to jail' of course which the answer to is no (council tax is different however!).

The biggest thing is to keep positive, its easy to get ground down, but thats what the muck spreaders want so don't let them.

Yes it may take all the spare money you have and the next 6 years to pay off your debts but in that space of time most peoples finances improve for the better and I'm sure yours will do.

SNV