Illness & 2 Credit Cards with an Overdraft.. Negotiations and Payments?

JackInABox_2

Due to some issues with work and illness, I've fallen behind on payments to my two credit cards.. probably the worst possible ones; Vanquis and Capital One. To make matters worse, my £500 overdraft with Smile is being reduced to £280..

Now, I've been worried sick - and tried to run away from it; foolishly. Well today I've decided to try and tackle it head on; and I've managed to work out what could be a viable plan. However, it depends on everyone agreeing to it.

I have NO experience with trying to "bargain" with these people, and am utterly worried incase they just flat out refuse and ask for the money immediately - or increase the already rocketing charges. I take full responsibility for the situation I am in, and I am taking full responsibility for making it manageable and getting out of it!

The plan basically revolves getting every form of debt to £0 as quickly as possible, but leaving an option for keeping avenues of credit open for afterwards, when I am back working and have the ability to spend wisely. (Rather than being without income for a little bit and panicing and spending without thought) I understand that my credit rating is going to be absolutely shot to peices, hence why I'd like to get this fixed as soon as possible, with as little damage as possible; preferably with those avenues of credit still available to slowly build it back up..

Capital One
I'm going to ring up and ask them to freeze the balance - this is something I question whether they will agree too. Now whilst I can pay it off without the balance being frozen; I ponder whether they will let me freeze it.

I've heard about people ringing up and managing to get fees knocked off, and the figure reduced - but I'm not sure how to go about this!

If they can freeze it, I'm comfortable that I can make a £50 payment every fortnight (so £100 p/month) and have this under control very quickly, almost in time for summer. (More realistically though, in time for Autumn)

Do you think these companies will allow me to "freeze" the accounts until they have a balance of £0?

Vanquis
This is pretty much the same plan as Capital One, however I believe their interest charges and other fees have amounted VERY highly. Which means I may have to pressure harder to have them lower these..

Does anyone have any advice for trying to get these companies to knock the fees down? Even if they don't knock the fee's down, I can accept it if they freeze them - otherwise this is going to be a lot longer than it needs be.

Smile
This is a very important issue, as ultimately I would actually like to have all my banking done through this account!

My plan here is to ask them to reduce the overdraft gradually, by around £75 per month, and not by £220 within weeks! However, I would like them to reduce the overdraft until the account is at £0, whereby I can request the overdraft to be reinstated to the modest figure of £250; allowing me to switch all my direct debits and payments into Smile, instead of Barclays. (Whom I am begining to detest with a passion!)

Once again, it all boils down to "How likely are they to accept this offer?".

DevCoder

Each overdraft reduction request doesn't work like that, they re-credit score you (so in effect remove the entire overdraft and check your credit score again). This normally results in the first "reduction" removing the entire overdraft if your credit score is already poor.
They will then re-score you for any further overdraft request (whether up or down) so bear that in mind.

Tixy

Capital one / vanquis

If you are behind with payments its likely that they will close the account to any new spending anyway. Which will in effect freeze the account to new spending - but is likely to mean they won't reopen the card in the future.

In terms of getting fees knocked off - what some people manage to do is get their credit card company to agree to freeze interest & charges on the account and allow them to pay less than the usual minimum payment - this is generally when they believe that you cannot afford the minimum payment and generally has a long term effect on your credit file.
Some credit card companies sometimes freeze interest for up to 6months and mark an arrangement to pay marker on your file, others will mark your credit file with a default.

Sometimes a phone call works, but most people find that they need to write to the creditor and explain their circumstances before they'll consider freezing interest. And they'll often ask to see a monthly income & expenditure account as well.

JackInABox_2

mmmm.. Thanks for the replies!

That most certainly makes sense about the overdraft, krisdorey. I guess that means that I really need to just get the balance back to -£280 and then go from there; putting £x in there every month until it's £0 and then migrating over anyway. The end result is the same, it's just then I really need to not touch the account when I'm paying the overdraft off...!

I guess I should've kept my mouth shut before I sent them the request then, here's hoping they don't actually act upon it yet! Does mean I'm going to have to cough £250 up pretty sharpish though.

Tixy, this is the confusing thing - at the moment I can pay a lot more than the minimum payment and get this sorted in about 2 or 3 months. The problem being though, I want to get it done as soon as possible, and that means I don't want even more fees added on whilst I'm paying it. I know that if I pay over the minimum amount the fees become less of an issue, as I will be putting in more than their taking out so to speak, but it's still just a matter of getting this fixed asap.

I assume there wont be that much need for writing as essentially I'm offering them to pay more than I'm required, to get the debt wrote off as quickly as possible.. however, I know never to assume!