In trouble

nallamas

Hi,
Tried to post the other day not sure where it went, if you seen this before apologies. I'm new to here but am desperate for help. I have a credit card debt of some £25k over 3 cards, this is something that has grown over a period of time and the repayments are huge i have never missed a payment and have not used the cards in over 12 months but make no dent in what i owe them. I suppose the questions i have are what is the best way to deal with this as it also affects my mortgage which is a current account mortgage on which i still owe £120k to be paid off in 13 years and with the amount i pay to the credit card companies i cant make a dent in this either. Is it possible that the credit card companies will take an offer of a one off payment and if so what as a % are they likely to accept or should i look at an IVA or even the possibility of going bankrupt. I really would appreciate some help on this as it is affecting my relationship with my wife who sees this as my own problem and we have come too far to let this cause damage that cant be repaired ( hopefully ). It is pretty much all i think about these days and is beginning to get me down, i know that sounds a bit soft but its true. Many Thanks

Grumpelstiltskin

Your previous thread is here.


https://forums.moneysavingexpert.com/discussion/4845168=

dancingfairy

Your main options in brief:
1) make the minimums on each card and throw as much spare money as is humanly possible at the cards to try and bring the debt down. There is a snowball calculator at makesenseofcards website which will give you some idea of how long it would take to pay off at various rates of pay.
2) a dmp (debt management plan). This is where you can't meet your monthly repayments. You work out your essential living costs - food, rent, etc and then what's left you divide up in a fair way between your creditors. You ask that they stop interest and charges to let you actually start repaying the debt. Clearly this will affect your credit file as you won't be sticking to your credit agreement to pay the minimum due each month. After several years of this you can think about making full and final settlements to your creditors as by then it is highly likely that the debts will have been sold on to debt collectors for fraction of the debt.
2) an IVA. This is where you budget for you essentials (As above) and then you promise to make payments to your creditors for about 4 years. If you have a house you will be expected to at least attempt to remortgage to release any equity or you will be asked to make an extra years payments. This is a form of insolvency. I don't much like IVA's as they are only suitable for a tiny number of people. If they fail then you are left with going bankrupt anyway. They are inflexible - if you loose your job or get sick or something and they last longer than bankruptcy. They are only really of any use if bankruptcy is restricted due to your job or you have significant equity in your home.
3) bankruptcy. Again a form of insolvency. Your income and expenditure will be assessed and you may have to pay in any excess income above your essentials into the bankruptcy for up to 3 years.
You need to follow the advice given on your other thread. You need to start by drawing up your budget so you can see where you are starting from.
StepChange I believe has a debt remedy option on their website. You may find it useful to work through this and see what it recommends although obviously you should then talk it through with one of their advisers. Other charities/charitable organisations exist such as National Debtline or Christians Against Poverty (CAP) or you can visit your local CAB.
Best of Luck
df

seanavfc92

Post a statement of affairs so people can see your income and expenditure.

Once you've completed it, see how much spare money you have left over after everything has been accounted for. This surplus can be used to pay off your unsecured debts.

You can work out how much each creditor would be due every month using a simple formula.

As above, if you don't want to talk to someone about your debts, use StepChange's Debt Remedy tool. This can be used for your SoA. HTH