How to service credit cards - in debt?

molly22

hi
my brother has a credit card problem - quite a big one.:(

he owes approx £15000 on 10 credit cards

he needs over £300 just to service their minimum payments each month. he is unemployed, on minimum income and mildly depressed.

he can clear the debt when his house sells, but in the current climate that could be months away.

what should he do next?

thanks
molly

Tixy

Hi Molly.

Suggest he talks to one of the debt charities. As he's on benefits he obviously won't be able to keep up with repayments so he'll need to offer them all just token payments (usually £1 per month each for someone on benefits).
IMPORTANT - Where to seek professional impartial advice about your debts. They can help and advise him and will provide templates of letters he can send out to creditors etc.

However if he has a credit card from the bank he has his current account with then suggest he sets up a new bank account with a bank he doesn't owe any money to and change any income/benefits so it is paid in there before he tells the bans about his financial problems -otherwise the bank might offset any money / benefits in his current account to put towards the card arrears.

molly22

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 260
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 260
Monthly Expense Details
Mortgage................................ 9
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 10
Gas..................................... 10
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 0
Mobile phone............................ 3
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 20
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 11
Car Insurance........................... 20
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 3
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 192

Assets
Cash.................................... 0
House value (Gross)..................... 65000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 67000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 25000....(9)........1.5
Total secured & HP debts...... 25000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
c cards........................15000.....350.......20
Total unsecured debts..........15000.....350.......-

Monthly Budget Summary
Total monthly income.................... 260
Expenses (including HP & secured debts). 192
Available for debt repayments........... 68
Monthly UNsecured debt repayments....... 350
Amount short for making debt repayments. -282
Personal Balance Sheet Summary
Total assets (things you own)........... 67,000
Total HP & Secured debt................. -25,000
Total Unsecured debt.................... -15,000
Net Assets.............................. 27,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.