reducing repayments help

planteria

a chap i know has a loan and 3 credit cards.

he owes c£35k for his loan.

he has cards with MBNA, Nationwide and CapitalOne with a total of c£30k. he is not spending on any of the cards at all...infact i think they may be cut up. he is paying c.£900/m in interest on the 3 cards, is struggling to do so, and has missed some payments.

the impression i have is that his credit rating will already be very low, and so there is little downside in trying to negotiate.

i have never been through this process, but i suggested to him this morning that he ought to go to the CAB for some help. at the moment he is paying interest on all 3 cards on a monthly basis. is it feasible that he could get the debt frozen, and start to make smaller, regular payments? and if so, could these be consistently reducing the capital, rather than just servicing (or failing to service) the interest?

i am encouraging him to take action, but i want to be sure i'm not giving him false hope. i understand that all circumstances are different, but i'm just trying to get a general steer.

grumbler

DFB board is a better place for such questions.
Also, have you checked MSE articles?

• Debt Problems
• Debt solutions

planteria

i will guide him to those, thanks grumbler..
but do you suspect that progress can be made, along the lines of my post above?

MikeMouse

Short Answer - Yes - he needs to change his approach.

Long answers to all this can be found on other threads

planteria

anyone care to guess how low a £30k debt with existing £900/m minimum payments can be negotiated?

grumbler

Debt, not debit.
What do you want to negotiate actually? Monthly payments? This depends on his SOA that he will have to provide to the lender(s). Nobody will allow him to reduce the payments and spend the money on non-essential things.

What's point in guessing? Be happy if they agree to freeze the interest.

planteria

i think getting the interest frozen will be possible..
and then yes, it's all about reducing the monthly payments. i just wondered how low folks here would consider likely/possible.

grumbler

Well, if currently he 'is struggling', but still manages to pay, I don't see why they would freeze the interest and noticeably reduce payments, especially if he hasn't even defaulted yet.

planteria

he has defaulted. i'm not sure if he has missed payments with all 3 cards, but at least one of them has been 3 months without payment:think:

forgotmyname

There is a big difference between a poor rating and a trashed one.

Stopped paying one. They can easily check to see that he is currently paying other companies so must have some funds to pay them also.

Paying one credit over another is a dodgy area.

planteria

sorry, i'm not suggesting that he chose to stop paying one. all i know is that one of the cards has not been paid for 3 months. i suspect that all 3 have had some missed payments...but i'm not sure.