Credit cards and Ccjs

aggertheman

hi,just looking to find out if credit card providers will withdraw your credit limit if they discover you have just received a ccj on your credit file,the reason I ask is I have a credit card(Luma) ive been paying it off every month and now an old debt has come up from 5 years and they are pressing for a ccj as I cant pay the debt off straight away and the other alternative is a payment plan over 4 months at £450 a month which I cant afford,thanks

Anthorn

It all depends on the lender and the way to go here is don't volunteer information not asked for. For example say you banked with Co-operative Bank and you had a current account and credit card and you got a CCJ (or indeed an IVA or bankruptcy) and they found out about it they would close down everything.

I think in your circumstances you should not be considering a credit limit and certainly not be considering increasing any balance on a high interest card such as Luma.

They can't have money you don't have unless they can arrange for you to conjure it out of thin air. Related to that, a court case costs them money and they are only likely to take you to court if they are able to get their money back. An exception to that is that it's an old debt and they may seek a CCJ to stop it becoming statute barred.

You are in almost the same exact position that I was in a little over 6 years ago back in 2008 when the banks went down, my employer went down and I went down. The way I did it was to send them an income and expenditure (budget) sheet and made them an offer based on my disposable income. The number of my bad debts was vastly more than your's and the overall outstanding balance was vastly more than your's but I was never taken to court.

Lastly, what really matters is not that you have bad debt but your willingness to pay what you owe based on an amount you can afford.

There are lots of income and expenditure sheets available for download which you can Google for. Here is just one of them:
http://www.bainesandernst.co.uk/help-and-advice/income-and-expenditure/

JKSandy

"pressing for a ccj" Have you actually recieved a court summons? When did the debt actually default? This would be your last payment date/acknowlegment of the debt.

Can you not borrow £1800 form anyone? If they get a CCJ it will be stuck o your file for 6 years.

Maybe best posting in the debt free board for advice.

grumbler

Anthorn wrote: »

I think in your circumstances you should not be considering a credit limit and certainly not be considering increasing any balance on a high interest card such as Luma.

I think what the OP is considering is getting a CC before CCJ that won't cut the limit after the CCJ is issued and reported to CRAs.

AFAIK, all lenders check the credit files periodically for changes and are likely to cut the limit if they see such major change as a new CCJ.

aggertheman

hi,thanks for the replies,the reason as I say im asking is I have had my current credit card for nearly 2 years now and I have regularly paid it off fully so as not to incur interest charges,at the moment though I have 700 pounds outstanding and I will be paying that off over the next three statements my worry is that should the company who I owe the money to get the ccj granted then it may prompt my credit card company to withdraw my credit facility,i have tried to come to an agreement with the company however they will not budge from the figures I stated in my original post,ps they are saying my last payment to them(claimant) was march 2010

grumbler

In practice CC companies almost never reduce the limit below the current outstanding balance, let alone 'withdraw' credit facility.

MQ77

I had a ccj issued against me, December 2012. None of my accounts were cancelled or closed.
That being said I paid off the money within 1 month and the ccj was cancelled.


Offer a payment and stick to it they should accept it, as long as you haven't ignored all their previous letters etc.

aggertheman

hi,thanks again for your replies,i offered them £100 a month but they said no and stated the minimum amount they would consider is £450 a month if I choose to pay it over a payment plan,so I suppose ill just have to wait and see when the date for court arrives

Aquamania

Let's hope they don't petition for your bankruptcy - you're well over the limit

Anthorn

grumbler wrote: »

In practice CC companies almost never reduce the limit below the current outstanding balance, let alone 'withdraw' credit facility.

Oh but they do and so do Banks. These very forum are packed with examples of it: Credit card limits reduced making the card over-limit and the over-limit amount demanded immediately, overdrafts cancelled and the amount outstanding demanded immediately, etc. etc. Just because you have a limit doesn't mean you will keep it.

To the OP you should really be taking action to prevent a court case instead of just waiting for it. If you send them an offer based on a income and expenditure sheet you will be doing exactly what a court would do. But at the end of the day if it comes to court you're going to have to do that anyway.

grumbler

Anthorn wrote: »

These very forum are packed with examples of it: Credit card limits reduced making the card over-limit

Really? There were very few such posts and usually this appears to be an error that gets corrected when the cardholder contacts the CC company.

and the over-limit amount demanded immediately,

I've never seen anything like this and will be grateful if you post some example(s).

overdrafts cancelled and the amount outstanding demanded immediately,

There is a huge difference between an overdraft and a credit card. Unlike a CC, overdraft is intended for a short-time borrowing only and indeed is repayable on demand.

Just because you have a limit doesn't mean you will keep it.

I have never said that you would keep it. The OP is paying the balance off gradually, and I said that it was extremely unlikely for the limit to be reduced below the current balance.