Need advice

araphahoe42

I recently lost my job and now on job seeker's allowance.
I owe close to 7 grand on 5 different credit cards.

i am getting conflicting advice on the best way to inform the CC companies about my situation and how i may not be able to afford payment till my financial situation improves.

Has anyone been in this situation and what was the approach?

Thanks in advance.

Tixy

Do you have any PPI on any of the cards? If so have you put in a claim?

If you are on JSA then its highly unlikely you will be able to afford much more than token payments to your debts. You'll need to work out a detailed income & expenditure account to work out what you can afford. If you can't afford more than offer £1 token payments.

I would cancel any DDs and then write to your creditors explaining the position and offering a token monthly payment to them all.
This will severaly impact on your credit file (you will get default notices issued) but there is probably no option in this case.

If you have your current account with a bank you owe money to (either one of the cards or an overdraft) then you should open a new bank account with another bank that you do not owe any money to and have your benefits paid into that account. This will protect you from offsetting (where your bank automatically takes your money to pay off arrears).
If you have problems opening a new bank account due to your lack of income then request a basic bank account with the new bank.

Will post a possible template letter in a sec - http://forums.moneysavingexpert.com/showpost.php?p=21654579&postcount=48 (might not be quite right for your circumstances but hopefully will give you a starting point).