Bank asking for my income/expenditure, why?

obiwan_2

Hi all,

I recently defaulted three times on one of my credit cards, and my bank sent me some income/expenditure forms to fill out and return to them. Plese can anyone tell me what the implication of this is?

From my little research, I think if I fill it and it seems that I can't keep up minimum payments at least, they may pause the interest, however it'll screw my cedit records. Can anyone help confirm this?

Note: I am normally able to take care of my payments, however my business is seasonal (spring/summer), and this year this basically ground to a halt. So I just need to wait till spring to pick up again.

billymadbiker

The forms are so the bank can work out your incoming/outgoing for you.
They will then work out what you can afford to pay them back each month toward the outstanding debt.

If you fill in the form and make the payments they suggest then, although the 3 missed payments will show on your credit file the remainder should not.
They will (often) freeze or reduce the intrest rate plus lock the cards so you can't use them to buy anything else.
By the time you have finished paying them off your file should be ok again.

The only way around this if you can actually aford to pay is to phone them, pay off anything you have missed (ie. the last 3 payments plus charges) plus they may ask for the next payment up-front.
Then plead with them to re-instate the account and mark your credit file to show you have done this.

If you can't afford it I suggest you fill out the forms.
If you had contacted them when you missed the first payment you could probally have got them to lock the cards and rate back then and they would not have marked it on your credit file either.

Tixy

They are trying to assess what you can afford to pay. Can you afford to meet the minimums? Note that if your expenditure includes 'luxury items' or very high costs in certain areas then they may decide these are unreasonable and that you could afford to pay the minimums if you cut down on these costs.

If you cannot meet the minimums then they may consider freezing interest but will almost certainly only do this if they either mark a default or arrangement to pay on your credit files. And yes either of these will make it hard to get new credit for years.