Should I tell my creditors I'm struggling

mdeleon

Hi everyone,

Thanks for reading, I know this might seem a simple question at first but here's my story.

I'm lucky enough to earn an above average salary and my wife is just starting working again after our first child is just about to start school. I've never been very disciplined in controlling my spending which didn't seem to matter until we started our family. Then every penny seems to count

Anyways I have £30K on credit cards all on 0% deals. We have enough surplus income to service then and pay £500 off the debts. My real issue is that I've had this amount of debt for well over a decade, it goes up max was £45K :eek: and down £11k but it never disappears.:(

We have a second home which we rent out. I feel writing this many people will just think I should man-up. We'd love the extra income and need to start getting ready for old age but we seem do really well for 6-12 months and then do something extravagant like a holiday/car etc.

My thought is if I tell my creditors then they'll impose financial restrain on my borrowing. I guess I'm a little worried this might affect our remortgaging at a responsible rate.

Keen to get everyone's thoughts, honest warmly welcome.

SouthernGuy

Hi and welcome,

Personally If I've understood correctly in that you are paying minimum payments (not missing any) and paying an extra £500 off the debt a month I wouldn't tell creditors you are struggling.

Instead I would cut up the cards so that you can't spend on them and knuckle down on paying them off. Focusing on the one where the interest free period ends first.

I have debts that I am currently paying down which until I started to tackle it felt really daunting. I admit my debt is on a smaller scale but debt is debt.

Prior to concentrating on becoming debt free I'd spend recklessly. Now I've completely changed my mindset and am making great progress. It took me a long time to grab the bull by the horns and crack on with it though.

I guess what I'm saying is that although it's very daunting and the light at the end of the tunnel is a pin hole at the moment you will start to feel better as the debt decreases.

I know this kind of side steps from your question but I hope I've helped.

Regards

dancingfairy

Well telling the creditors won't actually help at all (as they won't do anything unless you default).
Your options are to knuckle down and try and make some inroads into this debt or to do default and come to some kind of payment arrangement, whether that be an informal dmp or a more formal IVA or bankruptcy.
You might want to contact someone line National Debtline or Stepchange to talk through the different options.
Also why are you remortgaging? If it's to turn unsecured debt into your mortgage then this is a really, really, really bad idea. You should not be putting your home at risk.
Also if the debts are 0% what are you expecting the banks to realistically do to help you? They can't freeze interest and charges as you aren't paying any.
You also need to try and think longer term. You can't be debt free and plan for your retirement if you continue to take holidays and buy cars. It's going to come down to priorities. IF you budget well you may be able to afford a cheap holiday but you don't sound like you can afford everything you want so you will need to prioritise.
df

mdeleon

Thanks for the advise, really appreciate your help. First thing to do is to cut up my credit card tonight, annoying thing is I only reordered it as I needed the expiry date to transfer the balance to MBNA. Then I had a clear balance, week later they send me a 0% 12 months offer and extend my limit.
I've been watching the programme "The men who made us spend" and it talked about spending twice as much on credit cards and you would with cash. It got me thinking.....

Karen777

walk towards the debt free wannabe light

as the previous person said, your creditors are unlikely to give a monkeys unless you are missing payments, sadly.

in_need_of_direction

I'm with the others. You need to start clearing the debt. I'm tackling my mortgage as I had an injury last year that made me question what I'd do if I had to change how and where I work. Here's hoping you only experience good times but it might be worth asking a few what ifs. Since starting seriously in January, we've now reached the point where our level of borrowing could be accommodated with either of our salaries. It's a relief.

tlc678910

I recommend watching a few tutorials about YNAB (you need a budget) and giving it a go with the free trial software.

As you reduce your debt this could help you to stay on track and not splurge again. It is like an electronic "envelope system" where you budget the money you have into categories. I only started using it recently but I find it very powerful that if I want to overspend in my "daily spends" category for example I would actually have to take that money from my "foreign holiday" or "school uniform" etc. it makes me realise i can't afford certain things or to let money drip through my fingers daily unless I want to reconsider my priorities such as going on a holiday next year. It makes saving feel quite addictive! (I don't work for them honest - just a YNAB convert)

Good luck

bargainbetty

You aren't struggling with your debt. You are struggling with your spending. You need to address that, by preparing and living within a budget (allow for some fun if you can afford it) and throwing your spare money at the debts to bring them down. You have to change your mindset about money, or you will continue to have and probably increase your debts.

You can do this, but you have to make the decision to change yourself.