desperate to get out of debt - what are my options?

jmack_2

ok, I'm new here so hi everyone!!

right, i have been in debt for several years due to unfortunate events and over spending combined.

I currently owe, £500 on one credit card (27% interest) £2000 on another (29% interest) and a loan of £7500 (16%).

i have a couple of other miner ones as well such as 2 x £400 vet bills but i pay £50 each a month on those.
I have spoken this morning to the national debt people but would like some more ideas. I am hoping to get nearly £1000 lump some coming soon and i have read in some cases of credit card companies excepting payment settlements. could someone please explain to me how they work and would it be possible in my case to clear off my credit cards with the lump some (can scrap a little bit more money together if it means being in less debt) by paying off these 2 credit cards i would be £100 better off ever month and an awful lot happier.
I currently keep up with the payments on all debt but can only manage minimum payments so although the cards have not been used in well over 12 months (i came to my senses) i am not getting anywhere in getting them payed off and i am desperate to be debt free.
any help greatly appreciated here as i have been struggling with this on my own for some time.

(sorry for my crap spelling)

mellonicoley

If you've been paying them and not missing payments, I can't see the credit card companies accepting a settlement unless it's for the full amount you owe.

fatbelly

If you've not missed payments and have a reasonable income (sounds like you do) then you're what Martin calls a 'player' - your credit rating may well be good enough to get a 0% Balance Transfer card (link to Stoozing.com) to which you could transfer the two credit card balances.

OK, there's a fee. But then all your payments reduce the balance until the free period ends. When it's getting close, call the providers of the two old (now zero balance cos you haven't spent on them)cards and tell them you want to cancel. You may find you get an unofficial BT deal - long old thread so jump to the end.

There's a BT deal for those with slightly iffy credit rating too:

Capital One

misspuddleduck

Hi
Unless you are defaulting I don't think the credit card company will reduce your balance for repayment. Have a really good look at your outgoings - there are probably some savings you could make which would help. If you are not already doing so a spending diary and budget are a great way of seeing where money is going. You could also look at makinging an appointment to see/speak to a Money Advisor at CAB or calling CCCS for advice. You could post a SOA here - there are loads of people who could give you really good advice on where savings can be made. It can seem like a mountain to climb when you first begin to tackle your debts but you will get there - you have taken the first step

jmack_2

thanks for your replys. Although all my payments are upto date i have been late (by one day) once or twice so will this affect my credit rating? only asking as i think a balance transfer would be the best way to go but im a bit worried i will get turned down.
i already have a diary of out goings and unfortunatly i have no other adjustments to make. i have cut down everything i possibly could in my once a month oayday takeaway i used to allow myself

any further help greatly appreciated

Growurown

jmack wrote: »

thanks for your replys. Although all my payments are upto date i have been late (by one day) once or twice so will this affect my credit rating?

Yes I think it does, but whether it is a problem when applying for another credit card I'm not sure. Have you looked at your credit rating ? You can do it on line but it does cost.

I was paying huge amounts of interest on my credit cards and only managing to making the minimum payments each month. On my Virgin cc alone I was paying something like £150 each month with only a few pounds coming off the debt. I started a debt management plan with CCCS and now the interest has been frozen and every penny I pay comes off my debt. However doing a DMP has consequences so this may not be for you.

misspuddleduck

I agree with Growurown it would be worth talking to CCCS, CAB or Payplan about a debt management plan. I think you have to make sure you talk to one of these three and not to one of the fee paying companies - I have read lots of warnings on here about fee paying companies. It might not be the opton for you but it is worth looking into. If you stay in Scotland enquire about a DAS I have read alot of reports about it on here and it sounds a really good option. Creditors have to freeze all interest and charges. As I said it might not be for you but at least you will have another option.

Reducemydebt

Growurown wrote: »

Yes I think it does, but whether it is a problem when applying for another credit card I'm not sure. Have you looked at your credit rating ? You can do it on line but it does cost.

I was paying huge amounts of interest on my credit cards and only managing to making the minimum payments each month. On my Virgin cc alone I was paying something like £150 each month with only a few pounds coming off the debt. I started a debt management plan with CCCS and now the interest has been frozen and every penny I pay comes off my debt. However doing a DMP has consequences so this may not be for you.

Consequences of a DMP?

sgtbush

Reducemydebt wrote: »

Consequences of a DMP?

A Debt Management Plan is not a court sanctioned solution and is really a private agreement between you and your creditors. They are able to change their minds at any point or even sell on the debt to a more aggressive debt collection company.

Any missed or late or part payment will effect your credit file for 6 years. Your creditors may also issue a default notice or even pursue County Court proceedings and secure their debt against your property

Reducemydebt

sgtbush wrote: »

A Debt Management Plan is not a court sanctioned solution and is really a private agreement between you and your creditors. They are able to change their minds at any point or even sell on the debt to a more aggressive debt collection company.

Any missed or late or part payment will effect your credit file for 6 years. Your creditors may also issue a default notice or even pursue County Court proceedings and secure their debt against your property

Interesting, thanks. I wasn't aware they could issue a default notice or court procedings, given you are still technically paying the debt off, albeit you have broken your credit agreement with them. Something to bare in mind I guess.

Cheers.

sgtbush

Reducemydebt wrote: »

Interesting, thanks. I wasn't aware they could issue a default notice or court procedings, given you are still technically paying the debt off, .

Cheers.

re read the statement-- any late or missed payments-- if your late or miss even one your in breech of contract