Credit card debt spiralling out of control

BlackMonk

Dear All
I have a friend who has £36K in credit card debt. She was managing this debt by transferring it to new credit card providers offering zero or very low interest rates. However a few years ago her credit rating was downgraded to 'poor' so she no longer receives balance transfer offers. She also cannot apply for new cards. She cannot keep up with the repayments and has to borrow money to pay the interest, in other words she has entered the viscous circle of spiralling debt. I really want to help her so what advice can I offer? Any suggestions would be gratefully received.
Regards
BM

bottleofred

Hi Blackmonk,

Your friend needs to contact the credit card companies and anyone else she owes money to and try to arrange to have the interest frozen as long she makes a regular monthly payment. There should be a template letter available for this and possibly an information pack on the Consumer Credit Counselling Service website. The credit card companies are not obliged to freeze the interest and some of the debts may be handed over to debt collectors, but she could make contact with them as soon as possible. Your friend should also post a statement of affairs (there is a link near the top of page 1) in order to get tips/advice on how to save cash, which can then go towards the debts. Your friend will get plenty of phonecalls and letters threatening everything just up to but short of the point of death, but it is important that she doesn't allow these calls/letters to bully her into agreeing to unrealistic payments that she won't be able to pay in a few months.