12k Barclaycard debt

stuted

I decided to register and post a thread even though I've been lurking here for a while.

I have run up just over 12k debt on a Barclaycard since 2001 when I was sold the card at my local Barclays branch when I was about 19 and I was working as an office junior before I went to university.

Ill admit that while I was at university and through to my mid 20s I abused the card - I used to it for day to day spending like petrol for a car I couldnt really afford to run and vanity purchases and nights on the town. After a while I discovered I could withdraw money on the card so I did that as well and by 2009-2010 the balance was about 10k and I was in way over my head.

At the time I was lucky enough that my Dad who worked as a construction executive, agreed to make payments on the card for me until I started earning better money, and because I was not living in the family home where the letters were delivered, I mostly forgot about the debt and as of October 2014 its been a good few years since I've even used the card.

The problem started when my father passed away in July 2013 and I had to finally take control of my own finances. I discovered that my balance was around 11k as my Dad had simply been making the minimum payments for me. I also discovered that I had been paying PPI to Barclaycard since 2001 and that by now that was adding about 1k a year to my balance.

Even though to my knowledge I never missed a payment on the card for over 10 years, Barclaycard had been jacking up the interest rate on my card so it was at the maximum of around 30% because I was a 'high risk' So my minimum payment was now about £300 a month.

I immediately put in a claim for the PPI but after reviewing my case got a letter from Barclaycard PPI department with a leaflet for the Ombudsman inside saying as because I had signed up for it in the branch while I was employed as an office junior I didn't have a claim.

I've been struggling to make the payments ever since - selling possessions, borrowing from Peter to pay Paul etc. I've missed a few payments here and there but managed to bring the account up to date in the end and the last time I paid them anything I paid two months in one go to bring it up to date again. Its now been about two months since I paid them anything and they have only just started calling my mobile about it and texting (I never answer / reply to these just pay it when I can scrape the money together)

But I'm starting to reach the end of my tether because I'm still not earning much money and could be renting my own house with just the minimum payment but instead am living with my mother.

I'm about to write a letter to Barclaycard explaining my situation and requesting them to come up with a payment plan for me and also asking them to freeze the interest which is frankly usurious by now. If they don't agree I'm seriously considering defaulting on the debt as I don't own any property and have few assets to speak of, so even if it came to a CCJ - the 10% of my disposable income would be far far less than a £300 minimum payment

I also owe about 5k to Co-operative bank for a personal loan I took out in 2011 to finance a move abroad which didn't work out - I have managed to keep up the payments for this but there is still a few years to run on the loan (£140 a month) So I'm wondering if I walk away from Barclaycard am I better off just stop paying both and waiting it out for the 6 years or keep paying it?

I'm pretty sure my credit score is totaled by now anyway because of my late payments on the Barclaycard, but the loan I took out was the last time I applied for credit on anything so I'm not too concerned about not being able to get credit for 6 years if push comes to shove.

I am personally pretty much technically insolvent by now although bankruptcy isn't really an option as I'm a director and minority shareholder in a limited company which has a lot of potential in the medium to long term, its just that we are only able to take out a minimal amount at the moment while we get off the ground. Either way I don't expect my financial position to improve significantly in the foreseeable future.

Would appreciate any advice on how to proceed.

g6jns_2

stuted wrote: »

I decided to register and post a thread even though I've been lurking here for a while

I have run up just over 12k debt on a Barclaycard since 2001 when I was sold the card at my local Barclays branch when I was about 19 and I was working as an office junior before I went to university.

Ill admit that while I was at university and through to my mid 20s I abused the card - I used to it for day to day spending like petrol for a car I couldnt really afford to run and vanity purchases and nights on the town. After a while I discovered I could withdraw money on the card so I did that as well and by about 2009-2010 the balance was about 10k and I was in way over my head.

At the time I was lucky enough that my Dad who worked as a construction executive, agreed to make payments on the card for me until I started earning better money, and because I was not living in the family home where the letter were delivered, I mostly forgot about the debt and as of October 2014 its been a good few years since I've even used the card.

The problem started when my father passed away in July 2013 and I had to finally take control of my own finances. I discovered that my balance was around 11k as my Dad had simply been making the minimum payments for me. I also discovered that I had been paying PPI to Barclaycard since 2001 and that by now that was adding about 1k a year to my balance.

Even though to my knowledge I never missed a payment on the card for over 10 years, Barclaycard had been jacking up the interest rate on my card so it was at the maximum of around 30% because I was a 'high risk' So my minimum payment was now around £300 a month.

I immediately put in a claim for the PPI but after reviewing my case got a letter from Barclaycard PPI department with a leaflet for the Ombudsman inside saying as because I had signed up for it in the branch while I was employed as an office junior I didn't have a claim.

I've been struggling to make the payments ever since - selling possessions, borrowing from peter to pay paul etc. I've missed a few payments here and there but managed to bring the account up to date in the end and the last time I paid them anything I paid two months in one go to bring it up to date again. Its now been about two months since I paid them anything and they have only just started calling my mobile about it and texting (I never answer / reply to these just pay it when I can scrape the money together)

But I'm starting to reach the end of my tether because I'm still not earning much money and could be renting my own house with just the minimum payment but instead am living with my mother.

I'm about to write a letter to Barclaycard explaining my situation and requesting them to come up with a payment plan for me and also asking them to freeze the interest which is frankly usurious by now. If they don't agree I'm seriously considering defaulting on the debt as I don't own any property and have few assets to speak of, so even if it came to a CCJ - the 10% of my disposable income would be far far less than a £300 minimum payment

I also owe about 5k to Co-operative bank for a personal loan I took out in 2011 to finance a move abroad which didnt work out - I have managed to keep up the payments for this but there is still a few years to run on the loan (£140 a month) So I'm wondering if I walk away from Barclaycard am I better off just stop paying both and waiting it out for the 6 years or keep paying it?

I'm pretty sure my credit score is totaled by now anyway because of my late payments on the Barclaycard, but the loan I took out was the last time I applied for credit on anything so I'm not too concerned about not being able to get credit for 6 years if push comes to shove.

I am personally pretty much technically insolvent by now although bankruptcy isn't really an option as I'm a director and minority shareholder in a limited company which has a lot of potential in the medium to long term, its just that we are only able to take out a minimal amount at the moment while get off the ground. Either way I don't expect my financial position to improve significantly in the foreseeable future.

Would appreciate any advice on how to proceed,

Go and consult an insolvency practiitioner or the CAB. Bankruptcy may be the only answer.

jonesMUFCforever

I agree with above post.

stuted

g6jns wrote: »

Bankruptcy may be the only answer.

I'm quite surprised by this as there seems to be plenty of people posting on here who have managed to work out payment plans with credit card companies. Also if i get taken to court by Barclaycard, the judge would easily be able to see that my disposable income isn't enough to pay for it and I have read elsewhere these judgements usually result in 10% of someone's disposable income being garnished. I've not read anywhere that bankruptcy is condition of this. Surely if I tell Barclaycard I'm at risk of bankruptcy they are going to agree to me paying less or they are going to end up with nothing.

Although obviously if Barclaycard refuse to be reasonable about it I will quite likely consult the CAB, but I'd probably look at a Debt Management Plan or something along those lines before I consider going through bankruptcy. These are unsecured debts after all and I own no property.

I suppose what I really want to know is if someone here has experience working out payment plans with credit card companies and what offer they are likely to accept i.e. the wording of the letter. I know such arrangements exist and bankruptcy seems a little extreme when I still have money coming in even if its not a great deal.

molerat

Bankruptcy may not be through your choice, with that level of debt Barclaycard may initiate it.

g6jns_2

stuted wrote: »

I'm quite surprised by this as there seems to be plenty of people posting on here who have managed to work out payment plans with credit card companies. Also if i get taken to court by Barclaycard, the judge would easily be able to see that my disposable income isn't enough to pay for it and I have read elsewhere these judgements usually result in 10% of someone's disposable income being garnished. I've not read anywhere that bankruptcy is condition of this. Surely if I tell Barclaycard I'm at risk of bankruptcy they are going to agree to me paying less or they are going to end up with nothing.

Although obviously if Barclaycard refuse to be reasonable about it I will quite likely consult the CAB, but I'd probably look at a Debt Management Plan or something along those lines before I consider going through bankruptcy. These are unsecured debts after all and I own no property.

I suppose what I really want to know is if someone here has experience working out payment plans with credit card companies and what offer they are likely to accept i.e. the wording of the letter. I know such arrangements exist and bankruptcy seems a little extreme when I still have money coming in even if its not a great deal.

Facing up to the scale of the problem is the first hurdle. You really need to get face to face advice as already advised. They are the ones with the expertise and if you give them all the facts they should be able to tell you the best thing to do.

planteria

yes, good that you are tackling it. get some good advice. Citizens Advice Bureau seems a good idea as a starting point. i would hope that going bankrupt is Not the way to go.

stator

Well contacting them is definitely the first step, they will probably rebuff you as standard practice but try again a second time. It definitely sounds like you need qualified advice, there are so many different laws and I don't understand them, IVAs, DROs, Bankruptcy. Either the CAB or one of the other charities is a must:
http://www.moneysavingexpert.com/loans/debt-help-plan#help

thebritishbloke

I agree that given your low income, bankruptcy may be your best option. You don't own your home, and technically and possessions you have in your home could be argued to be your mothers (do you still own a car?). If you decide to default on the two debts, you're screwed for credit for 6 years anyway and they could chase you for those 6 years for payment, and I wouldn't be surprised if they'd get a CCJ on you for that level of debt. Filing for bankruptcy also lasts 6 years, but you can't be hassled, the debt will "disappear" so to speak. You'll want to consult professionals about this before you proceed though.

CAB is probably your best bet. Good luck

moohound

Try posting a SOA on the debt free wannabe board.

InsideInsurance

stuted wrote: »

I'm quite surprised by this as there seems to be plenty of people posting on here who have managed to work out payment plans with credit card companies.

Banks typically wont consider long term payment plans whilst your account only has a few missed payments. You really have to have defaulted and had the account passed to their bad debtors department before they will actually consider losing their revenue stream from you.

You should speak to a debt advice charity like StepChange who will be able to assist you.