Paying creditors differently - any experiences?

changeforbetter

Hi

Mentioned this on another thread, but perhaps could do with it's own post, as it's a specific question.

If you have a number of different creditors (e.g. cards) how might it go if you could afford to pay some, but not all?

e.g. you pay all fine, apart from one/two of the cards?

Please, would be grateful for any views, knowledge and/or experience of this?

(asking because I may soon be in a position to pay some but not all of mine).

Many thanks in advance for any advice.

Tixy

What were you hoping to do with the cards you cannot pay? enter repayment plans?

Those 2 cards that are not getting full payment may be more likely to take court action against you as they are being treated unfairly compared to your other creditors. A court should order they received a fair pro-rata share of the amount you have available for unsecured credit debts.
And/or they may be less likely to agree to freeze interest on any repayment plan you set up.
Is it just short term you think you may have trouble meeting repayments? or long term?

changeforbetter

To be honest I'm not sure whether it would be short-term or long-term (I've posted in another post about my mess of a finances/career). Basically I've got a lot of uncertainty right now.

Thanks for your reply, as that's sort of what I was thinking, that they might be less happy if they knew they were getting treated differently. But, would it not be possible to deal with them in isolation - ie write a few letters/deal with them specifically to arrange lower payment (even shorter term)?

As another thought, how would they know what you were paying others anyway?

Tixy

As another thought, how would they know what you were paying others anyway?

In time they'd probably guess that from your credit file - the others would show up to date payments.
And they usually request an income & expenditure statement/details of total debt before agreeing to freeze interest.

Thats not to say they definitely wouldn't freeze interest or accept a reduced plan but long term it would likely be more difficult.

Monkeyballs

changeforbetter wrote: »

Hi

Mentioned this on another thread, but perhaps could do with it's own post, as it's a specific question.

If you have a number of different creditors (e.g. cards) how might it go if you could afford to pay some, but not all?

e.g. you pay all fine, apart from one/two of the cards?

Hi CfB,

Before I entered into my DMP with SC I tried this, my thinking was that if I could either alternate payments or have some accounts frozen while I repaid others first then I could repay everyone what I owed them and all would be well...

Needless to say it didn't go well, the friendly folk at Barclaycard for example told me they would almost certainly apply for a CCJ

So, I went to DMP route and haven't looked back since! Ok so my credit file is shot to bits but it already was anyway and this way I don't feel like I'm cheating anyone and everyone is playing ball a couple more years and I'll be debt free!

Hope this helps?

MB

Aphidgirl

I'd have a go at ringing the creditors, explaining that your in financial hardship and can't make the minimum payments and see what they say. Perhaps some will agree to a reduced payment plan for just a few months and then re-evaluate after that.

At the moment I am paying £50-£70 a month to some creditors to pay off those debts quickly while keeping others in a DMP, where receive very small monthly payments. I haven't had any complaints yet, but have only just started doing this!

I'd second the idea of a StepChange (free) DMP as a good option if the creditors get funny with you. When I started mine it was a huge relief not to have all those minimum payments on different cards to make!

Monkeyballs

Aphidgirl wrote: »

When I started mine it was a huge relief not to have all those minimum payments on different cards to make!

Actually a very good point, if you have a load of different creditors to pay then half the stress is caused by just juggling the debts to make sure you pay them all! Having just one payment makes a big difference...

MB

changeforbetter

Thanks for those replies - yes food for thought.

Guess I'm still balking at the DMP plan, while I feel I can afford most of the payments (but not all).

I see the point about a single payment being simpler. However, I have heard tales from other sources about problems in using a single agent (e.g Stepchange) when there are multiple payments to be made each month. Missed payments with different dates etc...

changeforbetter

Aphidgirl wrote: »

At the moment I am paying £50-£70 a month to some creditors to pay off those debts quickly while keeping others in a DMP, where receive very small monthly payments. I haven't had any complaints yet, but have only just started doing this!

That is interesting, if you are actually being able to do what I mentioned in effect, dealing with different creditors differently, and they haven't complained!

Monkeyballs

changeforbetter wrote: »

Thanks for those replies - yes food for thought.

Guess I'm still balking at the DMP plan, while I feel I can afford most of the payments (but not all).

I see the point about a single payment being simpler. However, I have heard tales from other sources about problems in using a single agent (e.g Stepchange) when there are multiple payments to be made each month. Missed payments with different dates etc...

Hi,

Not sure what tales you've heard? When you sign up with SC you make a single payment and then on the 25th of each month they send a payment out to each of your creditors...

Part of the initial contact by SC to them is to confirm an SOA, an offer of payment and confirmation of the date when the payment will be made so in effect all creditors change their date in line with them - normally it's actually for about 7-10 days after the 25th in my experience to allow for any delays

I do get that you're apprehensive about entering into one though - debt is stressful enough without having to tip the apple cart but once you're in, you won't regret it (so long as you're realistinc with your budget from the get go).

MB

changeforbetter

Monkeyballs wrote: »

Hi,

Not sure what tales you've heard? When you sign up with SC you make a single payment and then on the 25th of each month they send a payment out to each of your creditors...

Part of the initial contact by SC to them is to confirm an SOA, an offer of payment and confirmation of the date when the payment will be made so in effect all creditors change their date in line with them - normally it's actually for about 7-10 days after the 25th in my experience to allow for any delays


MB

I've been reading around for reviews, on other sites, of people's experiences - most have been good, but I have seen reports of people paying a number of creditors who experienced problems. They say that some creditors would demand a set date of payment that wasn't in line with Stepchange, and start charging defaults. It's only some reviews, but my case fits more closely with that sort of problem as my normal dates are all over the month (with 6 of them).