Advice wanted on reduced payment arrangement

darbydoo

Hi Everyone

I am in a lot of debt at the moment, mostly credit cards with very high interest rates.

I would like to try and consolidate, but I am having trouble obtaining any credit of a decent interest rate, despite keeping up with all of my payments every month for a quite a long time now.

Having looked at my credit file - 3 of my accounts have previously been on "reduced payment plans", with one of them still being on one.

I'd like to know if it would benefit me to come off this repayment plan (if i can afford to do so) in an attempt to rebuild my credit rating? My current score is 711.

Of course, coming off the repayment plan would reinstate my high interest rate so I could be shooting myself in the foot.

Any advice appreciated

ellesbellesxxx

Please don't pay attention to credit scores - each lender scores differently and in fact look at the rest of your file, defaults, how much available credit you have and crucially, how much of that credit you are using. What kind of depayment are you currently on? Eg: has it been organised by someone like CCCS? Do you have to pay them a cut?
If you put up a SOA I am sure we can advise you where to save money and put money... consolidation is rarely a good long term move I am afraid.

darbydoo

I have not goine down a "debt management" route as yet, and nor do I want to at this stage, but here is a SOA (how depressing!):

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[/b]
Monthly income after tax................ 1996
Total monthly income.................... 1996[/b]

Monthly Expense Details
Mortgage................................ 255
Secured/HP loan repayments.............. 471
Council tax............................. 65
Electricity............................. 35
Gas..................................... 40
Water rates............................. 22.5
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 12.37
Satellite/Cable TV...................... 11
Internet Services....................... 0
Groceries etc. ......................... 80
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 35.61
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 8.52
Buildings insurance..................... 33.36
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 16.49
Presents (birthday, christmas etc)...... 0
Total monthly expenses.................. 1234.85[/b]


Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 95000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 64310....(255)......1
Secured Debt.................. 31596....(283)......12
Hire Purchase (HP) debt ...... 3563.....(188)......18
Total secured & HP debts...... 99469.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
M&S card.......................2878.88...72........18.9
Barclaycard....................3493.41...60........6.9
Vanquis card...................436.3.....20........49.9
Overdraft managedloan..........1298.88...69........12.9
Comet card.....................426.11....17........27.9
Capitalone card................289.24....14........39.94
Natwest........................1469.78...34........0
Aqua card......................727.45....22........35.9
Freemans catalogue.............540.95....28........29.9
Next catalogue.................340.02....34........25.99
Total unsecured debts..........11901.02..370.......-


Monthly Budget Summary
Total monthly income.................... 1,996
Expenses (including HP & secured debts). 1,234.85
Available for debt repayments........... 761.15
Monthly UNsecured debt repayments....... 370
Amount left after debt repayments....... 391.15

Personal Balance Sheet Summary
Total assets (things you own)........... 95,000
Total HP & Secured debt................. -99,469
Total Unsecured debt.................... -11,901.02
Net Assets.............................. -16,370.02


The Barclaycard is the one that's currently on a reduced payment - arranged with them directly. I pay £60 a month and have reduced interest rate.

Thanks

ellesbellesxxx

I have made some suggestions underneath. According to this, you have 700+ to throw at debt each month. Do you actually have that? I would keep a spending diary if the answer is no - plus you need to ask yourself, do I NEED this?
There is a snow ball calculator which tells you which debts to pay off first - the glaring one is the Vanquis card... the Apr on that is horrific! There is nothing here that can't be dealt with though and well done for getting this far.
What I do, is I have a bank account to which I transfer enough money for all my direct debits each month on payday. I then transfer to my savings, pay off my credit cards and what is left is MINE. I would recommend if you can, working out all your bills and transferring this each month. Leave yourself enough for food/necessaries and I would recommend even putting 50 aside for a rainy day too each month, then everything else throw at debt.
Hope this makes sense!

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[/b]
Monthly income after tax................ 1996
Total monthly income.................... 1996[/b]

Monthly Expense Details
Mortgage................................ 255
Secured/HP loan repayments.............. 471
Council tax............................. 65 over 10 or 12 months? If over 10, 2 free months coming up you can throw this moneyat debt
Electricity............................. 35 This seems a lot - I am guessing from council tax you have 1 bed?
Gas..................................... 40 Likewise! Shop around for both elec and gas and turn things off - put more layers on instead
Water rates............................. 22.5 Likewise! No more baths - take showers instead and put washing on quick wash.
If you have a dishwasher - don't use it!
Telephone (land line)................... 20 Switch! I am now primus 10 pounds a month as opposed to 20
Mobile phone............................ 30 Drop a tariff - this wil make big difference.
TV Licence.............................. 12.37
Satellite/Cable TV...................... 11 Could youjust use freeview?
Internet Services....................... 0
Groceries etc. ......................... 80 Good does this include pet food?
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 35.61 Did you shop around here?
Medical (prescriptions, dentist etc).... 9 Could you get pre payment certificate?
Pet insurance/vet bills................. 8.52
Buildings insurance..................... 33.36 This seems a lot?
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 16.49 what is this? Do you NEED it?
Presents (birthday, christmas etc)...... 0
Total monthly expenses.................. 1234.85[/b]


Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 95000


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 64310....(255)......1
Secured Debt.................. 31596....(283)......12
Hire Purchase (HP) debt ...... 3563.....(188)......18
Total secured & HP debts...... 99469.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
M&S card.......................2878.88...72........18. 9
Barclaycard....................3493.41...60....... .6.9
Vanquis card...................436.3.....20........49.9
Overdraft managedloan..........1298.88...69........12.9
Comet card.....................426.11....17........27.9
Capitalone card................289.24....14........39.94
Natwest........................1469.78...34....... .0
Aqua card......................727.45....22........35.9
Freemans catalogue.............540.95....28........29.9
Next catalogue.................340.02....34........25.9 9
Total unsecured debts..........11901.02..370.......-


Monthly Budget Summary
Total monthly income.................... 1,996
Expenses (including HP & secured debts). 1,234.85
Available for debt repayments........... 761.15
Monthly UNsecured debt repayments....... 370
Amount left after debt repayments....... 391.15

Personal Balance Sheet Summary
Total assets (things you own)........... 95,000
Total HP & Secured debt................. -99,469
Total Unsecured debt.................... -11,901.02
Net Assets.............................. -16,370.02

ellesbellesxxx

PS: Join Quidco or cashback site !

darbydoo

thank you for your advice, but I am absolutely certain at the moment that my outgoings are the lowest I can get hem as I shop around on a monthly basis.

My question was regarding my barclaycard reduced payment plan - should I come off this, or would it make no difference to my credit rating?

I just want to be able to get an interest free card to get rid of my expensive credit :T

x

beanielou

It would make no difference to come off your reduced payment plan.
You will not get a interest free card at the moment.

darbydoo

beanielou wrote: »

It would make no difference to come off your reduced payment plan.
You will not get a interest free card at the moment.

So what exactly is stopping me, is it just the level of debt rather than the accounts being on a repayment plan?

dancingfairy

possibly the amount of debt you have already compared to your income,plus if youapplyfor a 0% card that would be more debt as they can't be certain you would pay the debt off and not spend on the 0% card - so if you applied for say 5k they would look at you then having 16k's worth of credit which is quite a lot.
Also no doubt you have defaults on your credit record for when you were on the payment plans before? info stays on your credit file for 6years so this is going against you as well.
Um -whether you are on the electoral role, how long you have lived at your house etc etc all plays a part.
df

GeorgeUK

You can have about 3 credit checks in a 6 month period before your credit score is affected. It is also better to have them spread out so it doesn't look like you are desperate for credit.

Being on a reduced payment plan will have an impact on your credit score. How are the payments being displayed on your credit file?

I agree that it would be best to keep a spending diary as your current budget shows you should have about £400 left at the end of each month. I doubt this is the case or you could clear some of your higher APR cards in a few months.

For now i would try to pay down the cards with the highest APR. I would continue on the payment plan for Barclaycard as i do not think you will get a 0% card for quite a few months yet so will not benefit from coming off this plan. Get rid of some of the cards, then get back to paying the proper amount to Barclaycard - you don't have any defaults do you?

A couple of months of normal payment on the barclaycard and having less credit available to (and no credit checks within 6 months) may be enough to get you a 0% card. If not, don't keep applying, but concentrate of getting rid of the highest APR. Once you clear one of the lower APR cards, you may be able to get a balance transfer offer as an existing customer.

darbydoo

Thank you Both.

No I have never had a default or a CCJ and make sure that I pay everything on time every month.

On my credit report, the worst I have had is "2 payments down" on 2 of my accounts (both now up to date and have been for a while), and my Barclaycard payment plan is showing as "AR". So obviously it looks as though I am in arrears.

I have set up a snowball plan, so hopefully that will help.

I would love to have £400 a month leftover, but I have left a few things off my SOA.

I think paying my normal payment to Barclaycard at the moment will cause a bit of a struggle, so I will try and clear some of the smaller balance cards first (highest interest). Is that my best plan of action?

:beer: