Has anyone ever manage to do this?

flumpkin

Hi

My OH and I have huge cc debts c. 60k but also have reasonable jobs. Currently we make all of our minimum payments but it leaves very little left. I do not want to go down dmp route and will eventually pay them all off - hoping to actually focus on snowball this year!

My problem is that with such debts I can not get a nice balance transfer and these cards are all between 20-30% which is killing me. e.g. a £200 payment on one pays about £30 off the balance

From what I have read on forums etc the only way to get reductions on the interest rate is to default first which I do not want to do. Has anyone ever managed to get a reduction without? I know I borrowed the money so it is my own doing, but some of the rates especially ones they have increased are so frustrating. Over the past few years I have closed several cards that were going to increase the rates - which at least means the balance will always go down even if in very small steps.

Would love to know if I would stand a chance both on open and on closed accounts.

thanks

love flump x

eyeopener2

Can I ask why you don't want to go down the dmp/default route? It's not the end of the world you know.

The problem you have is that the credit card companies are making a nice little earner from you, and your keeping up contractual payments. Why would they then drop the interest rate so they earn less money?

You could ask, but that may spook them into cutting your credit limit, which can cause all sorts of problems, or upping your interest rate even further as your an even worse risk than before.

I'm not sure there is an easy answer to this.

R_P_W

flumpkin wrote: »

Hi

My OH and I have huge cc debts c. 60k but also have reasonable jobs. Currently we make all of our minimum payments but it leaves very little left. I do not want to go down dmp route and will eventually pay them all off - hoping to actually focus on snowball this year!

My problem is that with such debts I can not get a nice balance transfer and these cards are all between 20-30% which is killing me. e.g. a £200 payment on one pays about £30 off the balance

From what I have read on forums etc the only way to get reductions on the interest rate is to default first which I do not want to do. Has anyone ever managed to get a reduction without? I know I borrowed the money so it is my own doing, but some of the rates especially ones they have increased are so frustrating. Over the past few years I have closed several cards that were going to increase the rates - which at least means the balance will always go down even if in very small steps.

Would love to know if I would stand a chance both on open and on closed accounts.

thanks

love flump x

Not having a go.....but how does someone rack up 60k on credit cards?

How does this compare to your combined income? Not sure what you mean by reasonable jobs.

If you can only just make the min payments how long will it take to pay off? You need to seek so e professional advice on how to practically deal with this

sjw64

R_P_W wrote: »

Not having a go.....but how does someone rack up 60k on credit cards?

Not having a go......but does it matter?

sjw64

I can understand you not wanting to go down the DMP route. I was in a similar position to you, I had about 63k debt made up of credit cards, loans, etc and once I removed my head from the sand I sat down and thought out exactly how I was going to pay this debt off.

DMP via an external organisation was not an option for me as I wanted to do it my way, by myself, on my ‘ground’ with me in some sort of control.

At the end of 2010 my total debt was 63k and I could not make the min payment for them all so I wrote to each creditor explaining why & how I ended up in the position I was in. I didn’t waffle or exaggerate things, I simply told them ‘how it is’.

It took about 6 months of ‘ping ponging’ letters to each other and at times it was quite stressful but in the end most them either significantly reduced the interest to only a couple of % or froze the interest all together. All of them agreed a set amount to pay (much lower than the min payment). This lasted between 6 – 18 month but it gave me time to start thinking about who to pay back first & how, when the reduced interest rate finished.

For me it was simple mathematics. I started paying back as much as I possibly could to the highest %APR via the snowball method. I found a spreadsheet on the internet that does this. I made HUGE sacrifices and every penny I had spare went on the ‘snowball payment’ method I had. I got rid of the car, started to cycle to work (lost 3 stone!), went shopping on the bike (less food to buy), no holidays, no presents to each other at Christmas etc etc etc etc. It wasn’t quite Pasta & Beans but you would be amazed at how far £50 would go for two people per week.

Sounds a bit steep? Yes but in three years I have reduced £63k debt to about £35k and at the rate it’s going at the end of this year I will owe nobody nothing.

The key is snowball payments. The minute one is paid off, put the payments onto the next highest %APR debt. I have been truly shocked at just how fast the debt starts coming down but by god you need to be disciplined.

Only one debt went into default which meant it was sold to a Debt Collection Agency who I simply repaid with no interest. The rest I managed myself.

Let me know if I can help further. I was meticulous at keeping records via spreadsheets & folders for letters etc.

2014 for me is now enjoyable.

Monkeyballs

Hi Flumpkin,

Have to agree with Eyeopener here, why not go down the DMP route?

My suspicion is that it's a lifestyle thing maybe (not judging, just a guess) and you are looking to reduce your debt outgoings to accommodate more debt? Eg. If you could reduce your repayments by £200 pcm then you could get finance on a nice new car...

If this is the reason PLEASE STOP.

I used to juggle my debts before and for a while it worked then my income went down, I broke up with my GF and the world stopped spinning and II went Bankrupt.

The quite excitingly about 8 months later the workd started to spin again and nice people like Provident started telling me I was great and would like to give me money and I thought 'Ooh... you know what, I have no real outgoing s other than food and rent and I'd quite like A, B and C right now' and BOOM I have £18k in debts again.

I never learned, honestly I think my LBM moment was about a year ago when I sat back and realised that although I wasn't about to go bankrupt I felt the same sickness in my stomach...

Sorry if I sound a bit preachy but I know other people who are in the same boat (not that they listened to me) and whenever someone says "can I get my creditors to reduce my interest rate" it's never in the interest of paying it back quicker, it's so they can finance more debt.

If nothing else, try calling Step Change

Take care,

MB

Firewalker

Flumpkin, this kind of debt can be paid off; but it is very difficult to know whether this is possible in your case without knowing what your income is. I've worked some general rules helping people to decide what is possible and what is not possible. Here they come:

1) If you debt is equal or less than 50% of your annual income (before tax) you can pay it off without much to do (of course this depends on the level of income - the higher the income the faster you can pay it off; if your income is low paying off will take some ingenuity but still possible).

2) If your debt is 98% or lower of your annual income (before tax) you have hard work coming. It can be done but you'll have to consolidate (this is what we did and paid off £100,000 in three years). Whether you are able to consolidate depends on how much your net worth is and your relationship with the bank. There is a risk in this path: you'll have to be really determined to pay the debt off (including learning how to limit spending and increase your income) or you may get into more serious trouble by building CC debt again.

3) Anything higher that the ratio above - or in other words if your debt is 100% or more your annual income - you need professional help. Please approach a charity and have them help you set a DMP.

Hope this helps and good luck.

Firewalker

R_P_W

sjw64 wrote: »

Not having a go......but does it matter?

Well yes it does matter....understanding how you get to the point of owing that much on cards plus a hefty overdraft is critical in dealing with the problem and making sure it doesn't continue.

eyeopener2

Could I ask how long your debt has been at this level and have you made any inroads into it at all? If you have reduced it, by how much?

flumpkin

It has been growing over the past 13 years or so. Most accrued about 10 years ago (long personal story that I don't want to go in to on here, involving family and health issues - which are sorted now). For many years monthly cc payments were just treated as a bill and up until last 6 months or so we had been using them when we ran out of money towards end of month. We had head in sand for a very long time and haven't really budgeted until recently. We don't have a massive house, expensive lifestyle or big holidays, loads of clothes etc - most goes at supermarket especially top up shops or on presents or too make takeaways/bottles of wine and biggies like car repairs, dentist etc. We can certainly meet minimums and I know the road ahead will be hard, but figure we need to start that journey now!

I am not wanting to get more credit at all - just make inroads into paying this back sooner. Just started Jan with £150 car repair and paid cash and it felt good. I am frustrated by amount going in interest but I know it is only me to blame.

Wow Firewalker (and sjw64) - your repayments are inspiring. We are at about 95% of wage in debt. I know snowballing is our only hope (and budgeting).

Thanks
Flump x

cyclura

Ok my advice. Do not do as someone above suggested and consolidate. Its a big no no and tbh you are not going to get a loan when your current debt is 95% of your income anyway. Forget that and just go with the snowball if you really do not want to default.

Ok, I had a lower debt than you but my income is significantly lower than yours as well. I snowballed my debts and I never defaulted. I paid the minimum off of everything except the highest interest card (throwing all spare cash art that) and worked my way down. Half way through my snowballing journey the credit card companies started throwing 0% deals my way. The original highest interest card gave me a 0% deal to BT, so I did just that. It was a juggling game for me but I started as you are now.

To get as much paid as poss, look at your SOA and really tighten that belt, no more luxuries and I mean look hard at your SOA. Dentists for example should not be more than £214 every 6 months as thats the band 3 for NHS treatment (thats worst case scenario), just a check up is £18. Look at travel, is there a cheaper way, look at your shopping, cut the brands down a level or 2 if you can and set up a budget. Take cash and only spend that cash rather than adding to the card. No top up shops, your budget is your budget and once its gone its gone. I can feed a family of 4 with a dog and get all the cleaning products and toiletries in that for £50 a week. I managed to get it down to £30 a week when I really was trying to clear that last debt I had. Can you stick a SOA up here as well and others can help you.