New and need help

Elle.x_2

Hello everyone,

Im new to this forum but have heard good things about it and im hoping someone can help me.

I took out a motor loan with Barclays Partner Finance in 2007, i purchased a car worth £4995, and had £3000 negative equity on a previous car that was included in the loan, so in total I borrowed £8000. I have two years remaining out of the 5 year loan, and so far have paid back around £10,000. If I continue to pay the loan back for another two year, I will have paid back £16,000 on an £8000 loan. I no longer have the car, it was written off in a car accident in which my brother died two years ago. I've continued to make the payments, but after having time of work after my bereavement and being made redundant twice since November im struggling with the monthly payments of £270. I was on a payment plan with them for a year which ends in June, where I was paying £90 a month but this cant be extended.

Are there any options available to me? Im tempted to just stop paying them and let it go to court. The only thing stopping me is the damage that could be done to my credit file, but I just think the interest im paying back is extortionate and I cant afford to do it anymore x

Tixy

Hi Elle

Don't just stop paying so that the case goes to court. If it does then you would still owe the full amount and court costs on top. Instead I would suggest you work out whether you can realistically afford the minimum payments or whether you need to offer them reduced payments for your loan.
The only way they will be likely to accept reduced payments from you is if you can demonstrate that you really cannot afford the minimum payments. So you would need to do an income & expenditure account and show that you don't have enough left to make these payments (and that you are not spending money on luxuries etc).

Do you have other debts as well that you are struggling with? if you do then it may be best to contact one of the debt advice charities such as CCCS or citizens advice. I'd also suggest popping over to the debt free wannabe section of the forum and posting up a statement of affairs (a sort of income & expenditure statement) and seeing if the people there can help suggest ways you can save money and reduce your outgoings so that you can afford your repayments.

paddyrg

What a horrid situation, but you are right to approach it now, not default/court unless you want a lot more stress from debt management companies along the way...

Why can't the payment plan be extended? I am guessing it just about covers the interest, so would never pay off. Can they meet you somewhere in the middle?Maybe £150 so at least you reduce the principal over time? But, serious question, can you sell a load of stuff to get a lump sum to reduce the outstanding amount? It sounds like the interest rate is pretty high, so any cash you can put towards clearing the debt will be worth even more in their hands than yours, saving you more in the mid term.