Default Notices

ctunni

I was made redundant a couple of months ago and have been struggling to pay the monthly payments on my credit cards. I have four cards, each with difference amounts on, a total of around £14,000. I am in a right mess financially now, and receiving job seekers allowance. I have a mortgage and fortunately the PPI is now covering the monthly payments on the mortgage until I can get another job somewhere. I rang all the credit card companies and explained I had lost my job and wouldnt be able to pay the minimum amounts they were asking for. I have now fallen behind on the payments and I have received two default notices from two of the CC companies. I don't know what to do, or where to turn anymore, they are threatening to take further action in the form of a solicitor and possibly taking possessions from the home. I am being contacted on the telephone several times a day by these companies and I just don't have the means to pay, I only get £220 a month job seekers and they want much more than that a month...what should I do other than drive myself of a huge cliff

I have read that I could write to all these companies and explain the situation with a list of all my outgoings but I have also heard that this will not stop them taking action and they might reject any offer of a payment arrangement. I was thinking all I can offer at the moment is £1 a month to each of them until I get back on my feet and find work, but I am worried that they wont accept this and continue to harrass me, please help!

Tixy

Hi

It is definitely a good idea to write, explain your circumstances and that you can only afford a token payment at the moment of £1 each (if thats al you can afford). Ask them if they will agree to freeze interest & charges. Also include that once your circumstances improve you will write to them to increase the payments (or words to that effect). You can find some useful templates on the nationa debtline website here - http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6 (you probably want the token payment one as a starting point - people often advise you to send recorded).

They don't have to agree to your payment and they don't have to freeze charges but many will if they realise you are paying what you can afford.

They will almost certainly issue you with a default notice and enter a default notice on your credit file but if you cannot meet repayments this is often inevitable. The defaults will stay on your file for 6years.

Your creditors could still decide to start court proceedings against you, but in reality if you are not earning a judge is not likely to order you to pay any more. If you do ever receive court
papers then complete them to request to pay in installments.
Bailiffs could only be appointed if you did not keep up with court ordered repayments, unless your creditor took you to court then nobody could take your possessions.

In reality the default letter is just a standard letter to ask you to bring your account up to date before they issue a default - its just a legal requirement they have to send out and they probably say things like they may take further action which could lead to xyz. The best thing is to keep them informed of your situation.

If one of the credit card is with the same bank as you have your current account and receive your JSA then you need to open a new bank account with a bank not connected to anyone you owe money to. This will prevent the bank offsetting your benefits towards any card debt you have with them.