New here, we want to get our mess sorted but need help

robthesnapper

My fianc!e and I are both in debt with credit cards to the tune of about £60k (combined, most of it is in my name).

I feel ashamed even typing that out, but the debt has built up over years, the usual story I guess.

Until now we've been making at least the minimum payments and have only had a handful of late payments (usually down to absent-mindedness more than anything else). However these companies keep raising their interest rates - the interest alone on one MBNA card is £300 per month - so, we're running to stand still all the time.

We're both self-employed and our income is OK for the time-being. But, we both recognise the time has come to really get a grip on this problem and do something about it rather than blindly paying minimum payments and getting absolutely nowhere!

Luckily, I managed to negotiate a payment holiday on the mortgage for three months over the winter (as it's the quietest time for my business), but the payments start again in March and at that point we probably wont have enough to make all of our regular outgoings plus the card payments.

We took our first step last week and went to see the CAB - we have another appointment with them this coming Tuesday. I suppose what we want is for someone to look at our finances and recommend the best course of action.

I think our situation could be worse - we are earning and if it weren't for the credit card debts we'd be fine. So while we can afford to pay something back on the cards each month, it's not enough.

I'm rambling a bit now, but I think if we could just get the card companies to not add any further interest and lower the monthly payments we could chip away at the debt and eventually complete it - we're not looking for a magic bullet to get us out of this scot-free and we know it will take years to achieve - but we do want to pay all these debts up. It's just that the the interest is killing us.

I've read through some of the info on here and on other sites and I think my initial thoughts of looking at an IVA probably is *not* the best route for us. So maybe a DMP from Payplan or CCCS would be better? Do these organisations actually have much in the way of negotiating power with the credit card companies? The idea of being chased for these debts by phone, baliff or whatever is quite scary. I hope whichever organisation we end up using can help in that way too.

It's a really stupid predicament we've got ourselves in, but it hasn't happened overnight. Although it's us who's used the cards I have to say that the card companies have made our situation worse, but I guess that's how they make their money.

Pink-Angel

Hi there, welcome to the forums, there is a lot of support on here. You are not alone in your situation, well done for recognising that help is needed. It's far too easy to get into debt, many of us are in this horrible situation. You're right about the interest on credit cards and how you never seem to get anywhere - I've been making minimum payments for far too long, and the interest gets higher, meaning my debt never seems to go down. If you go down the DMP route, it's best to choose someone like CCCS who are a charity and don't charge fees. In fact, if you want to get an idea, the CCCS webiste is really helpful. There something called Debt Remedy on it where you input all your outgoings, debts etc and then it suggests options for you. There is no obligation using this, but it can be helpful. Talking to the CAB is also an option. CCCS (or other companies) will negotiate with creditors and most will stop interest, although there is not an obligation for them to do this, many will. A charity like CCCS will have more weight to negotiate than an individual. I'm just in the process of setting up an DMP so waiting to see how it all happens in reality with my creditors (their response etc) but at least I know I'm going to pay an affordable amount to CCCS each month which they will then distribute. If you have any debts with your bank, you would need to open a new account too so the bank where there are debts can't take your money (which they are legally able to do!). There are a lot more implications with an IVA, and if it fails it means bankruptcy. I also considered the idea of an IVA (I liked the idea of being debt free after 5 years) but decided that DMP is the route I'll take.

Good luck!

MFWannabe

Hi
Welcome to the board and well done for facing up to your debts.
You've had some great advice from Pink Angel.
I would also suggest posting an soa on here so people can get a better idea of all yor incomings and outgoings.
I assure you that you will get the very best advice and help on here

robthesnapper

Thanks for the advice so far.

churchrat

hi

dont panic!! as you see from my sig, we were in that much debt a few years ago, you can get out of it.
Not much to add until you have done your soa, but did you know that you do not have to accept the interest rate rises on the cc's?

AFAIK, you have to write and tell them that you do not accpet, but then the account can no longer be used, just paid up and closed. I'm sure that someone who knows more will be along.

goodluck

robthesnapper

Thanks churchrat, good to see so many people getting themselves sorted on here. That's a hell of a debt you've paid back in such a (relatively) short time.

I will do the SOA - we have to do a similar thing for the CAB meeting on Tuesday so I may as well do the online one at the same time.

I suppose what worries me more than anything else is the periods of "crap" you have to go through with a DMP but I guess everyone's experience is slightly different.

churchrat

hello rob

I will not pretend that it is easy, cos is aint!!

The one thing I wish I had known when I started all this was that you do not need to talk to any of your creditors. Keep ALL conversations in writing. Post ALL letters by recorded post, because they will deny recieving them. They will tell you that they conduct all of thier business by phone--well they might but you do not have to, and they WILL deny agreeing anything with you. There is a template on here to post saying that you will only communicate in writing--please send it--it will make your life so much easier.

Do not sign anything with a proper signature, just print your name.

The first couple of months will be difficult, but it will settle down. Believe me, once you have started to do something about the debt life is so much better.

keep in touch.

robthesnapper

Did you do your DMP yourself or use one of the orgs?

churchrat

I did my own dmp. But thats because I did not know about the free help that was out there, although to be fair to myself, I think that there is a lot more help around now than when I started looking.

If you can get help for free then take it. In fact, take all the help you can get!! But do not use a company that you have to pay for. Read everything that you can find, and have a look thro the debt diaries on here--truly inspirational.

Do not be bullied and never agree to anything on first glance. Come back on here and ask others what they think. Even if you ask your debt advisor what they think never forget that it is your life and there is a lot more to living than just paying off a debt.

robthesnapper

OK, brilliant, many thanks. Will update when I have some more info.