Urgent advice re: MBNA please

leopardlady_2

I have been juggling with my debts and just managing to cover everything until my MBNA statement (balances transfered totaling £13500) arrived saying my monthly payment is now £290, and £285 of that is interest. I am now at my wits end as I cannot possibly pay this, and if there is £280 adding to it every month I don't know what to do.
Is there any way I can get the interest frozen while I get advice on what to do next?
I intend to try and get a bank loan to pay this off but I am not too optimistic that I will.
As a last resort I will have do do some sort of debt management plan but all the time the amount is escallating at a scarey rate.
I haven't slept since the statement arrived and any advice would be gratefully accepted.

chevalier

Hi there welcome to the boards. The first thing to do is not be panicked into doing something, that long term will make things worse.

People on here very rarely suggest consolidation loans because you have already paid interest on the original debt, and then you are going to pay interest on the interest in the loan repayment. It also tends to be that the loans are over a longer time period which is why their repayments LOOK better, but they aren't really.

I would suggest you fill in a statement of affairs. Link is here http://www.makesenseofcards.com/soacalc.html . If you decide to do a debt management plan, then you would need to fill in one of these anyway to go through with one of the free debt management companies that are listed at the top of this forum. (never pay anyone to manage a debt management plan, as this means money that could repay your debt faster is going into their pockets).

You have to be honest about it though, so probably the best way is to sit down with your credit card statements and bank statements for say the last 3 months, and then average out each of the spends from there.

this can often be quite an eye opener! To say the least! And it may give you an idea as to where you can cut back, so you can throw more money at the debt.

You can of course ask them to lower the APR on the card, you never know they might say yes.

good luck and well done for posting
chev

leopardlady_2

But at least with a loan I know some of the money will be coming off my debt, this way only £5 a month of £290 will be coming off, a nightmare. If I did a true statement of means I wuld be in minus figures. I keep my head above water due to help from my ex and my daughters. As I own my house I have few options as I do not want to loose it. My mortgage is nearly ended.

SouthCoast

The FREE debt charities will need a SOA before they can give you independant professional advice.

gabriella90

Hi
first of all don't panic and as said before consilidation is not a route that is recommend if your already struggling. First of all is MBNA your only debt? If so i would give them a call, better not to do an ostrich impression.
Please post up a SOA of you outgoings and any other debts. Is changing to a 0% or rate for life card a possibility?

I'm sure there are many options for you- just let MBNA no what is happening you wouldn't want to be slapped with millions of charges.

Hope this is of some help:)


This is on MBNA's help section
Question: What happens if I cannot make my minimum payment? Answer: We can all face unexpected changes in life. Becoming ill or losing a job are just two things which can cause money problems.

At MBNA, we recognise the stress that debt can cause, so we've come up with a simple 3-step plan to help. And the sooner you start, the sooner you could get back on your feet.

We're here to guide you through this process every step of the way, so if you need a free and confidential discussion just call 0800 028 0690 Monday - Thursday 9am - 9pm, Friday 9am - 5pm and Saturday 9am - 12pm

Step 1 - Working it out.
If you are in genuine financial difficulty, it's in all our interests to get it sorted out. The first step is to work out how much you spend each month on basic living costs. Don't include any debts at this stage, just all essential spending on things like food, rent or mortgage, electricity, water and gas bills. Cancelling non-essential things like gym membership or Satellite TV will ensure you have more money to pay off your debts sooner.

You will need to give us these details together with details of any money coming in each month. For example, any take home pay and any benefits you receive such as Job Seeker's allowance, Working Families Tax Credit and Child Benefit (your local Benefits Office will have this information).

Step 2 - How much do you owe?
You then need to put together a list of all debts you have. The list should include any credit or store cards, plus any loans and overdrafts. Remember to provide the names of each company you owe money to, plus an up-to-date figure of what's left to pay.

Once you have all this information, simply call 0800 028 0690. Our Debt Management service is completely free and confidential and is here to try and help you pay off your debts in a realistic and sensible time.

Step 3 - A repayment that's right for you.
Everyone's circumstances are different, so we'll aim to work out a payment plan that's right for you.
• If you can make the payments we set for you under a repayment plan and show your commitment by making regular payments, we may be able to restructure your account. This means bringing it up-to-date and not showing your arrears on future statements.
• We can then tell the Credit Reference Agencies that the arrears are cleared and your account is up-to-date (this will not change what you owe us).
• Sticking to a repayment plan could mean we don't have to get an outside agency collect the debt (if we do have to appoint an agency it can affect credit rating for up to six years.)
Please note, any repayment plan will register as an 'arrangement' with the credit reference agencies. This shows you have taken steps to sort out your debt with us, but other companies will be able to see if you apply for credit in future.

Who else can help?
As well as MBNA, you can also get FREE help and advice from the following independent organisations:
• Consumer Credit Counselling Service
Call free 0800 138 1111
www.cccs.co.uk
• National Debtline
Call free on 0808 808 4000
www.nationaldebtline.co.uk
• Citizens Advice Bureau
www.nacab.org.uk
You can also find numbers and addresses in your phone book or yellow pages.

hitabrickwall_2

I currently had a debt of about the same amount with MBNA. It is not my only debt though so I have entered into a debt management plan with CCCS.

MBNA recently have been reasonable lately though. I had a conversation with them the other day where they said if I could offer £278 a month they would stop all interest and charges and the debt could be cleared in five years. They also said they would not default the account.

It may be worth giving them a ring as they suggest on their website.

Best of luck x

mufc689908

Dig your heels in and dont pay them.

I owed them the best part of 10 large and eventually paid just under 2 with the rest written off in a full and final settlement, after a year of going at it with them.

roberts516

I have to say that I have found Mbna a nightmare ! the free phone number given above was a waste of time all they wanted was the arrears after sending me a letter the arrears are all cleared and then back tracked and sent a letter they made a mistake ! I have paid them "£220 everymonth and cannot keep up with the interest.They refuse to reduce the interest or move their payment date a week ahead as I have changed my job.So I have just found out that they have helped themselves to over £200 from my bank account without my authorisation.They have left me with nothing to live on until pay day next week. :mad:
Sorry to be dome and gloom but put it all in writing.

leopardlady_2

So many different experiences. If they would accept a reasonable amount and stop interest and charges that would be all I need, with no need to go on a dmp. I have other debts but all manageable, my halifax cc is 2.9% life of balance, bank loan paid off in feb 2011, dfs credit ending dec 2010.

I am working 16 hrs a week get working tax credit and DLA. I am now self employed as a preferable option to going on benefits when I lost my job, but am still trying to build up a client list.

sharronej

So has this come at the end of a 0% deal? or have you only just noticed the interest? My dh has a couple of cards where virtually all the payment is taken up in interest - I have one where the balance outstanding is £300, the minimum payment is £6 pcm and the interest is £6.09 pcm! It's not unusual. Have you got anything left at the end of the month or is every penny used up? The SOA is the way to go for specific useful advice. I briefly considered consolidation until I found the snowball calculator for cc's - even a small amount over the basic makes a difference.

You have some other debts due to be paid off I would strongly recommend looking at the calculator but keeping the amount you are paying off the same as if you were still paying the bank loan and DFS, for example if the two due to finish add up to £300 then I would commit that money to the MBNA, the calculator will show you the difference it makes and give you a debt free date.

http://www.whatsthecost.com/snowball.aspx?country=uk

leopardlady_2

No I've had the card for years but it was a balance transfer deal which reverted back to standard rate after the offer period, but I expected it to go back to the previous interest rate not nearly 30%.

I never have any spare money but am used to that. As long as I can eat and pay my bills thats ok. My ex helps with the debts as some are joint but in my name so my responsibility. Unfortunately he's already helping as much as he can.