Suddenly in debt - not sure what to do

pocketchick

Hello everyone, this is the first time I've posted.

When I was 18 I ran up a lot of debt, credit card, store cards etc. (about 5000 in total) I spent about 1 year paying money to a "debt management" agency and in the end realised they were only paying £10 off my debts and keeping the other £50 for themselves! Anyway, I filed for an administration order, and managed to get the debt knocked down to £500 and paid it off over a couple of years.

I got a really well paying job and took out a Vanquis card and a Very catalogue (the only ones available to me) in order to rebuild my credit score. Stupidly I let both run up and was paying £500 per month off both so of course both limits were raised and raised, etc etc you get the picture.

I was self employed in my job and I have lost a contract which means I am still self employed but no longer have any income at all, I am living off of my partners small income at the moment. I am unable to make the minimum payments on my very and vanquis accounts. I have the repayment option plan with vanquis which they are refusing to activate due to me still being self employed (apparently means I am still in employment even though I have no earnings), and have been told if I unregister as self employed then I am making myself "voluntarily unemployed" which means I am still ineligible to use the repayment option plan. I believe because of this it was mis-sold to me - can I apply for the fees back? This would help a little in the short term.

I am tempted to just cut my losses again and ask to default on both payments and set up a payment plan on both at the minimum I can afford but where does this leave me in the future for credit? Do I actually need credit?

Not sure what to do, I most def can't make the minimum payments on the accounts, and neither company are willing to help me.

sourcrates

Hi, Mmm tricky one this, myself I would retake control of this situation, stop paying them, are these the only two debts you have ? write to them, explain your circumstances, and offer to pay them a token £1 a week/month whatever you can afford, yes unfortunately your credit will be trashed, but then it will be anyway if you cant pay, you need to make a statement of affairs to see how much you have coming in, going out, and whats left for your creditors, then split it between them, keep paying what you can until things improve for you, don't take any notice of what they say to you, they just want as much cash back as possible, you need to be in control of this, not them.

Newgirl_2

Hi there

Sour has given you good advice. I would only add this - worrying about keeping a credit rating is worrying about the wrong problem. Defaulting will ruin it anyway and, given that you have had problems before with credit, it may be wise to take a new approach and aim for life without credit. It is possible to do.

Some people (and I include myself in this) are not cut out to have credit. I'm never ever going there again. It's way too easy to get yourself in a mess. It's far better to work at getting your debts sorted out and then saving a pot of money to buy what you need. It's a good feeling not to owe anything to anyone. A far better feeling than having 'stuff'.

Good luck

Newgirl

fatbelly

pocketchick wrote: »

Not sure what to do, I most def can't make the minimum payments on the accounts, and neither company are willing to help me.

Then you pay them a token offer, or nothing. They are non-priority. So it's no big deal.

The Vanquis plan sounds like missold ppi to me. There's advice on this site about reclaiming it.

Unfortunately your class 2 NI contributions don't qualify you for jobseekers allowance in your own right if you declared yourself unemployed so there is little point going unemployed if this is short-term and partner earning over £100 per week.. Though it is worth checking on turn2us if you are missing anything as a couple that you should be claiming i.e housing benefit or council tax support.

Concentrate on getting the work situation stabilised and then decide what to do about Vanquis/Very then. Payment plan, DRO, full&final, even another admin order, are all options.