Oh No! It's a journey of £38,000 - This time it's personal.... (Now with proper SOA)

ProdigalThumb

Hi,

I know just how you feel. I recently to took up a Debt Management Plan with Payplan because I just couldn't keep all the debts under control any more. The hardest part was making that first call.

Just a word of advice if you haven't sent those letters yet. If you can afford to spend a little bit more on the postage, send them recorded or To Be Signed For. Lloyds deny ever receiving any of my letters. So I am having to send them again Recorded Delivery.

I have found Lloyds TSB to the most difficult company to deal with. They were the only ones to reject the payment offer from Payplan. They call morning noon and night, on my mobile, house phone and work phone and the letters are never ending.

All the best.

Homershairdo

Hi all,

Just had an unexpected windfall of just over £2k :j. Any suggestions on what I should do with this? A holiday is tempting, but I guess I'd better put it towards some debt! Should I put it towards a high interest, or the lower interest debts?

Also, the gist of my letters to my CC's are:

1. Please close my account
2. Please stop interest
3. Please can I pay £xx a month (average £70) per creditor

Does that sound ok??

jamesd

Well, a holiday would prove the lack of a lightbulb moment.

I hadn't looked at your SOA before. Given the numbers there I'm not sure that your creditors would agree to a DMP, since it seems that you can still pay the bills with a fair bit of excess income to reduce the debt balances.

If you still have the £2500 cash and also have the £2000 windfall that could eliminate the balance on the Virgin card and you'd probably get a balance transfer to keep some other debt at 0% for a while. That £4500 would save you £75 a month in interest on a balance at 20% interest.

The money you free up each month from that could be put into a savings account until January when you find out which, if any, cards don't end up still being at 0% after balance transfers. Balance transfer from Lloyds would be first priority for any BT. Then you could close the Lloyds account.

If you get the balance transfer(s) you'd need to stay at 0% on the credit cards, that would leave you free to reduce the Zopa balance as fast as you can, without paying much extra interest if in a year or two you don't get another 0% credit card deal. Zopa rather than card balance reducing for two reasons, it has a higher minimum payment than the cards and it's harder to get it ad 0% and keep it there than it is for cards. Also, Zopa reduces the required monthly payment whenever you make an extra payment, so that helps your monthly flexibility by reducing the minimum payments you have to make.

From the look of it, you're still at the point where continuing to juggle can avoid the need for a DMP.

System

Good luck hairdo and hats off to you for seeing the light and taking them on on your own. I'm near the end of my DMP and it has been pretty much easy going. Good luck and keep posting on here, join in on the chat threads too. Lots of people been there and bought the t-shirt. Take care Lenny

Homershairdo

jamesd wrote: »

I hadn't looked at your SOA before. Given the numbers there I'm not sure that your creditors would agree to a DMP, since it seems that you can still pay the bills with a fair bit of excess income to reduce the debt balances.

Hi James,

Ah yes, my SOA. I need to post a new one - that was taking into account my partners new wage, before her role feel through. So I need to remove £600 from the income category. God bless the NHS and it's budgets!!

Have to admit I am very reluctant to do a dmp, feel as if I'm letting a lot of people down!

jamesd

Removing £600 from the income there would hurt a lot alright! Makes a DMP look much more suitable. Even with the cash I doubt it'll make your situation stable. And that's DMP or IVA territory as least bad options.

You're letting yourself and your family down if you don't do it when you need to. While I'll happily look for ways to avoid it, there is a point where it doesn't make sense to do that and where a DMP becomes best. That lost £600 a month is enough to take you there.

Homershairdo

Hi James,

Thanks for you're help on this, it's been much appreciated.

I've been looking on the Zopa site, and have found this

"In certain cases the borrower may be undergoing financial hardship and cannot afford to keep up with their monthly commitments; the Repayments team will try and come to a fair arrangement with the borrower so a proportion of their monthly commitment is still met. "

I'm not sure whether you've any knowledge of this as a Zopa lender, but would they be likely to extend the period of the loan, thus reducing payments?

Thanks again - I know you don't have to, but you've been quite the sounding board!

Homershairdo

Zopa contacted by email - prompt response and dare I say, helpful so far.

Onwards and Upwards...!!

jamesd

Glad they gave a positive response. They probably had plenty of time to think about how to respond; chances are that they were reading this thread and already knew that you had a tough problem to try to solve and had considered other solutions first.

What did they offer you in the way of options? Not many people have written about this yet and it's good to share experiences to help others find their best available solutions.

emweaver

ProdigalThumb wrote: »

Hi,

I know just how you feel. I recently to took up a Debt Management Plan with Payplan because I just couldn't keep all the debts under control any more. The hardest part was making that first call.

Just a word of advice if you haven't sent those letters yet. If you can afford to spend a little bit more on the postage, send them recorded or To Be Signed For. Lloyds deny ever receiving any of my letters. So I am having to send them again Recorded Delivery.

I have found Lloyds TSB to the most difficult company to deal with. They were the only ones to reject the payment offer from Payplan. They call morning noon and night, on my mobile, house phone and work phone and the letters are never ending.

All the best.

How much do paplan allow ou to keep each month after bills and debts?