Will my plan work?

alemted

Hi all,

After viewing all the excellent advice on this forum, we have had our lightbulb moment and are starting to sort our debts out. Previously we have just changed loans/cards until the debts are now massive and no-one will give us credit anymore. The snowballing stops now!

We are going to sit down and fill in our SOA tonight after the kids have gone to bed. We are presuming that we will have much less than we think (if any) to pay off creditors.

Our plan is to write to them all and ask them to freeze/reduce interest and accept a pro-rata offer (as it says in the templates on the national debtline), including our SOA when it's finished.
Also we want to cancel the PPI on the 2 loans we have (both with Lloyds TSB). We want to do this for a period of 12 months and then review our financial status.

Some rough figures here of our incoming / outgoings, the full SOA I will post soon.

Joint income per month after tax: ~£3000
Child Benefit (3 kids under 5): ~£175
Child Tax Credit: ~£45
Total: ~£3220 (roughly)

Debts:
Lloyds TSB loan (me) ~£21000 outstanding @ £479 p/m
Lloyds TSB loan (OH) ~£13000 outstanding @ £370 p/m
RBOS Plat. card ~£7500 @ £175 p/m
BOS preference card ~£5000 @ £250 p/m
Lloyds TSB Plat. CC ~£3750 @ £80 p/m
Other store cards add upto ~£2000 add upto about £150 p/m
All minimum payments........APR's to come on our SOA

We also have 2 cars (1 paid for, 1 with 2 years left @ £187p/m), 2 lots of car insurance, house insurance, sky, phones, mobiles, mortgage (£750p/m), etc. etc, etc, etc

We sometimes get extra income through selling on ebay - but that's irregular - 3 or 4 times per year.

We have been succeessfully paying all our creditors (no payments missed) yet struggling with things like food, petrol, childcare costs, living our lives, etc.

Just this week, after a swift eye opening bank meeting, they advised us to write to their loans dept. requesting reduced interest, longer period to pay, etc. So even they know we are in debt up to our eyeballs.

The original question is - Will this plan to request lower payments & cancel interest/PPI work. Do these companies freeze debts and allow interest to be stopped?

We will also be requesting the cards be cancelled/disabled from being used.

We are both calm but worried after typing this first post.......looks like about £50000 of debt (Gulp)!!

Your advice is welcome.....

nearlyrich

Hi Alemted and OH welcome to MSE and to the DFW board, you are in a good place, there are lots of people in your position post on here, some of them have even bigger debts but are handling them and getting them down and once you get the situation under control you will feel much better.

I can't really answer your question but it's always worth asking for help from the creditors and things like PPI are rarely worth paying for.

Once you put up your SOA there will be lots of advice from the experts.

bank_of_slate

I urge you to seek professional, unbiased advice from payplan or CCCS (links above!)
...Linda xx

bank_of_slate

The bank WILL want you to take out a long term consolidation loan, the only people who will benefit from this is the bank.

Some people find it helpful to post a full SOA including all bills, we are experts at spotting areas where you could save, particularly utilities, insurance.

Remember, we are here to help, support and advise you, NEVER to judge you or your circumstances
...Linda xx

alemted

I was thinking about CCCS or Payplan but i'm sure we could manage our own DMP.

I will contact the national debtline, once the SOA is done, just to use as a reference.

We would like to sort this mess out ourselves using guidance only from those companies.

bank_of_slate

Please don't think that I doubted you ability to do that,
I just wanted to be sure you get professional advice before you commit yourselves to anything.
...Linda xx

alemted

bank_of_slate wrote:

The bank WILL want you to take out a long term consolidation loan, the only people who will benefit from this is the bank.

Definitely no more loans of any kind!!

Our money left for creditors will probably be so little, we couldn't afford repayments on a £200 loan!!

alemted

bank_of_slate wrote:

Please don't think that I doubted you ability to do that,
I just wanted to be sure you get professional advice before you commit yourselves to anything.
...Linda xx

No problem, nervously awaiting the results of the SOA before taking next steps, this is just our initial plan (and was advised by the bank about their OWN loans).

We've looked at about 50 DMP's on here and on professional debt sites and we are hopeful we can sort this out.....it all starts tonight!

Wish us luck!

Primrose

Sometimes it's the small economies which help you along the way like
cooking double or triple batches of soups, caseroles,etc and freezing them to save on fuel & buying bargain clothes from charity shops (which also saves you paying VAT). When you come to renew your car insurance check around for cheaper options and if you save money, use that money to pay off some debt. Also don't ever buy ready processed meals. Those produced at home at much cheaper and longer term if you have room to grow your own veg in your garden, this too will save you money.