Some Advice Please

furlong86

I have 2 credit cards

1 with the ulster bank i owe £1,100 Maxed out from 2008

1 with Barclays i owe £800 Maxed out from 2008

I have not paid them of at all and getting debt collection letters sent out and need help to pay them off, currently unemployed aswell

I also have a ulster bank current account which went minus £493 from bank charges!!!!!

So i owe lets say about £2,500

What would the best solution be please, i see there are debt consolidation companies but there is lots of them and havent a clue what to do, please help,

Thanks
Johnny

podperson

Please don't use a debt consolidation company, you will just be getting into more debt and most of them will charge you a fortune in interest since the ccs will have messed up your credit rating.

I would say first of all do a statement of affair showing your incomings and outgoing so you can see what you have left, if anything, to go towards the debts. There is a sticky at the top of this forum with a link to one. If you want to post it on here as well then people can often help out with ideas on where to save money.
You can also get advice from lots of free organisations such as cccs, national debtline, payplan and cab. They will look at your circumstances and be able to offer advice on what the best options for you will be, for example a debt managment plan where you are paying them reduced payments every month. Cccs and payplan can also run this for you for free.
You can also look at reclaiming the credit card charges, have a look at the guide on that section of the forum.

furlong86

thanks for your reply, some good advice there, cheers

also heard a friend saying to be about a debt relief order?

dancingfairy

a debt relief order is a mini form of bankruptcy. I believe it costs about 90 pounds. I think you are allowed to owe up to 15k, not own a house and have less than 50 a month to offer your creditors. Unless you are planning on being unemployed for a long time (ie due to illness etc) then 1) a dro would be like using a sledge hammer to crack a nut in my opinion and 2) may not be accepted due to the fact that your circumstances at the moment are not settled - ie hopefully you would get a job.
I would a) get a basic bank account with somebody you don't owe money to as the last thing you want is your bank taking your JSA etc to pay their charges and leaving you with nothing (they aren't allowed to take benefit money but why wait until they try and then have an argument with them with them having your money?).
b) write to your creditors , explain you are unemployed and offer them 1 pound per month and let them know you will be in touch when you are able to offer better payments and in the meantime please would they freeze interest and charges to give you a fair chance to get back on your feet.
Pay them 1 pound per month even if they don't formally agree - this way IF they go to court you can prove that you are trying and doing what you can even if they want to play games. Set up a standing order - do not give your creditors your bank details or set up a direct debit as again you don't want them emptying your bank account.
df

podperson

A debt relief order is like a type of bankruptcy but for those who only owe a smallish amount, so is quite a big step and make sure you get proper advice from one of the debt charities.
As far as I am aware it is a £90 fee, which is much lower then actual bankruptcy and is for debts under £10k. You can't have total assets over I think £300 and you must only have £50 or less a month disposable income after your essential bills are paid. A certain percentage of your creditors must agree to it though so you might have problems at the moment with being unemployed as they might assume that your circumstances were only temporary and would change when you found work.
But I am by no means an expert so definately worth talking about to one of the free debt organisations as they should be able to advise on whether you would qualify and if it would be a good option for you.