Finally Snapped today

a_desperate_man

Hi, I am new poster here, but have been reading and trying to gain info for a long time.

Right, I don't know if this is a record but my debt stands at a mind bending £119,815.

Of that 63k is unsecured on cards and a loan, the rest is mortgage.

Amazingly I am not in any arrears and have been servicing the debt, but the taxman is not happy waiting for his money now, a measly £1600.

Today I finally snapped, after struggling to pay for so long I broke down and confessed all to my parents who have no debt, and never have.

The shame is humiliating.

BUT, my father, who is at the best of times quite judgemental was amazingly understanding and afetr a couple of hours thinking time going over the figures offered me 50k to pay off my credit cards, and only wants 25k back as was planning to give me and my brother 25k each anyway.

My world has changed in an instant and I really do not know how to thank him enough.

My question is, can I get the cc companies to accept a lower payment than the balances to each and every account as a full and final payment?

I can then set about clearing all outstanding debt with the £1200 I will have spare each month!

Oneday77

Hi,
Well done on confronting the issues and taking that first step.
To answer your question, you can only ask them. All they can say is yes or no.
I would start low and see what they say, 60% as a thought, others may say different they may be right
Start to high and you don't have much room to negotiate. The way to do it is take all your debts, excluding the mortgage. Total them up work out what each creditor is owed as a percentage of the total and offer them the same %age of the £50k. I would say you had £40k
Always do it in writing and make sure you get Full & Final letters before payment.

If you can use less than the £50k to clear them off it reduces teh burden on your dad too.

niccatw

Wow, what an understanding, generous father!

In theory, folks have done as you describe in the past, but I'm not sure how easy it would be for you to get them to agree if you have been managing to finance your debts up until now.

I guess there'sonly one way to find out!

Have you contacted any of the free debt advice charities for advice? If no-one here can give you advice a bit more concrete then my vagueness, I'd maybe contact Citizen's Advice, CCCS, PayPlan or National Debtline and chat through your options and ideas with them. They all have websites too.

Good luck in your debt-free journey.

NorthernLas

I would pay off the taxman before the credit cards

Oneday77

You spotted my deliberate oversight Northernlass lol

Yip the Royal cash Robber must have their pound of flesh first.

a_desperate_man

Thanks for all your replies, was going to offer all my creditors 46.7% of the debt, non of them are in arrears so I think I may be unlucky, just trying to get it all down a bit, no point in spending more than necessary - wish I had useed that a few years back!

The tax man isn't a worry, I am self employed and it is on account, his rates of interest are very favourable compared to cards! It will be up to date within 2 months of the rest being paid off any way.

LandyAndy

I'm going to be harsh because you give me no reason not to be.

Your father is being foolish to pour his hard earned (I presume) money down the same pan that you have poured yours (read 'somebody elses ').

If, as you say, you've read here for some time you will know that being bailed out is not the answer. Getting to grips with your own finances is the answer. If you can post an SoA here advice may be forthcoming as to how you can move forward, with or without external help.

However, the most important thing you can do is own your problem.

HappyMJ

a_desperate_man wrote: »

Right, I don't know if this is a record but my debt stands at a mind bending £119,815.

Of that 63k is unsecured on cards and a loan, the rest is mortgage.

It is not a record at all. Anybody on £24,000 per year should be able to manage that level of debt quite easily, whilst owning a home. Debt is relative to earnings and there have been some levels of debt on here that would make you see yourself as well off.

You might need to do a bit of debt shuffling, getting the interest rate as low as possible and making a sensible SOA otherwise you'll only be in the same situation in 5 years time.

I agree with LandyAndy. If your dad has offered you £25k no strings attached then take that and no more but you must use it wisely. Also, I would expect he would want to be cared for in his later life and not relying on state handouts. So, I would be trying to save it back up again to make sure his retirement is the best it can be.

sammy115

I have to agree with Landyandy...

I don't think you will get your creditors to agree to a lower amount as you have been keeping up with your debts. They generally (and I may be wrong here) only take settlement figures after you have been on a debt management plan with them for quite a while. What your father is doing, whilst admirable, is just the same as giving you a consolidation loan. And they never work. You need to figure out why you have got into so much debt and try to change your spending habits. Someone else making it easy for you is not going to help with that.

I don't really think you have had your light bulb moment yet.

Fortheloveofmoney

I also agree with Landyandy.

When I had my lightbulb moment I'd recently started a new relationship. After he was planning a big trip to New York for us I confessed about my £30,000k debt (excluding mortgage which would have been around £120k at the time) and said that I couldn't afford to go.

Now this guy (now my husband) could see how distressed I was about it all and very kindly offered to pay it off for me and I declined. I knew that I had to learn my lesson no matter how painful. It took me just over 2 years to pay it all back and it was totally worth it. I'm not saying he didn't make it easier by taking me out for dinner now and again and buying a few treats for me but the hard work was done by me.

I now know how to handle my money (and his) so that we are in a good position financially. This is just as well, as due to redundancy and job changes we have had a 58% reduction in our joint take home pay since April 09 and we haven't had to touch the 6 months emergency savings we have tucked away just in case.

It's nice when people offer to help but I think you only really learn your lesson when you've felt the pain and made the sacrifices necessary to pay back what you owe.

Good Luck

Nukumai

a_desperate_man wrote: »

The shame is humiliating.

...but not to the extent that you wish to pay what you owe to your creditors, it would seem.

Why not use your father's generous offer to reduce your debts and then get on with paying them off in full?