Wakeup call !!

davidj247

hi everyone - I've been reading the forums for a while and have realised that I am not alone.
I have built up over £30k in credit card debts over the past few years by overspending and bad use of 0% balance transferring.
I am now coming to the limit of my credit and need to do something pretty sharpish. I would like to manage my debt myself ( I got myself into the mess so I can get myself out of it!) and have used the NEDCAB website to generate the letters I need to send to the creditors (3 - Virgin money, Barclaycard and M&S Money)
I looked at Stepchange but that involved changing my bank account.
I will not need any overdraft facility when these payments have stopped so shall try and keep my account.
I cut my cards up this morning and already feel quite liberated and look forward to hearing from anyone who can help or advise as the best way for me to continue
Thanks
Dave

sourcrates

Hi,
Best way is to manage it yourself, it gives you much more control over where and when, your money goes to your creditors, make sure you ask for interest and charges to stop, good luck with it, and don't be tempted to use the cards again !!!!:beer:

davidj247

Hi sourcrates

Thanks for your reply. i looked at stepchange but didn't feel that it was for me. It looked pretty rigid in what you can and can't do and I also read a few posts here from people that weren't happy with the plan.
I could kick myself for getting into this situation, but I am determined to sort myself out. I've buried my head in the sand for a good 6 months and have now realised that I'm in trouble. (Had the cards for a number of years and just blindly kept using them)
I hope the 3 credit card co's will play ball as these are the main debts causing me problems. I have been paying approx£350 pm in interest and got nowhere near clearing any of the balances. I've never missed a payment on any of them but have been moving money around just to pay the bills. Without the interest I could make a dent in the debt and get myself back on an even keel.
I am lucky that I have a full time permanent position and every now and again the chance to do a bit of overtime - the problem is I don't see any benefit from it at the moment as it is swallowed up by my other commitments. Hopefully in future I could use it to pay off these debts and see an immediate result!

tesuhoha

What I would do in your situation is tackle the credit card with the highest interest rate first. Pay the minimum payment on the others while you throw all the spare money at the highest rate card. Then do the next one and so on.

davidj247

sourcrates wrote: »

Hi,
good luck with it, and don't be tempted to use the cards again !!!!:beer:

I cut them up today and will never be tempted again!!!
Lesson learned

sourcrates

davidj247 wrote: »

Hi sourcrates

(Had the cards for a number of years and just blindly kept using them)
QUOTE]



How long have you had these accounts ? do they date from before April 2007 ?

davidj247

I'm not quite sure - I don't think so. I had one then transferred balances etc but just let things get out of control.

sourcrates

davidj247 wrote: »

I'm not quite sure - I don't think so. I had one then transferred balances etc but just let things get out of control.

Ok, so you cant challenge them on any unenforceability issues then, so your self managed DMP would seem to be the way to go.

longtermplanner

davidj247 wrote: »

I looked at Stepchange but that involved changing my bank account.

Good luck with your new DMP!

I am just a bit concerned because of this reference to Stepchange making you get a new bank account.

It is standard debt advice to anyone starting a DMP that they should not use as their current account an account with any bank that they owe money to. this is because the T&Cs of your account almost certainly give the bank the right to set off money you pay into one account (eg your salary going into your current account) against money you owe them in another account (eg a loan, credit card or overdraft)

So what Stepchange told you was not unique to them and still applies if you are doing a self administered DMP. See step 5 here on the NEDcab site: https://nedcab.cabmoney.org.uk/documents/dmp/2a)%20Self%20Help%20DMP%20(New).pdf

davidj247

Hi
I don't have any credit cards with the bank that my current account is with. I do have an overdraft facility but will not need to use this when I suspend the credit card payments.
Stepchange wanted to include my bank in the list of creditors and therefore close the account. I would like to avoid this action if possible and keep my other direct debits etc in place.

thanks
Dave

chillpill

davidj247 wrote: »

Hi
I don't have any credit cards with the bank that my current account is with. I do have an overdraft facility but will not need to use this when I suspend the credit card payments.
Stepchange wanted to include my bank in the list of creditors and therefore close the account. I would like to avoid this action if possible and keep my other direct debits etc in place.

thanks
Dave

You (we) have an obligation to treat all of your (our) creditors fairly. I'm guessing you've included your overdraft on your list of debts to Stepchange on your income/expenditure list? By choosing to paying off your overdraft first (AFTER the date you are planning to enter into a DMP), you will be giving one of your creditors preferential treatment, unless you plan to make similar proportionate payments to your other creditors as well (which I guess is unlikely). Even if you do a self-administered DMP, you will still have this obligation to treat all of your creditors fairly. If any of your creditors can demonstrate you have not treated them fairly compared to other creditors (to a court if they decided to take legal action against you), then you could risk getting a CCJ. Don't forget, your creditors will know how much you owe to other creditors (from the income/expenditure you need to provide to your creditors) and they will also be able to see both how much and when you have made payments to your creditors from your credit file. Therefore, the advice Stepchange are currently giving to change your bank account is correct, as you should not be clearing your overdraft in preference to your other debts! As an alternative, you could clear your overdraft BEFORE the date you enter into a DMP which would then mean you wouldn't have to change your bank account! To end on a positive note, you deserve praise for doing the hardest part of admitting you've got a debt problem, so well done and good luck.......