To tell or not to tell!

dancingfairy

You may wish to make token payments for a bit whilst you seek advice from a debt charity but obviously making token payments will affect your credit rating (which may not actually be a bad thing).
You can ask about payment holidays etc but I suspect that a lot will say no. You might find you are better just sending a letter saying I'm having debt problems, I'm seeking advice from CAB/National Debtline/Stepchange and here's a token payment of £1 or £5. I will be in touch when I have a plan (I'm sure there's a better version on the national debtlines website for this). The point is that YOU are in control and YOU tell them what you will be paying. There is the risk that if you start negotiating with them you will be brow beaten into paying more than you can afford or prioritising one creditor over another.
df

patman99

As you have a mortgage, I would strongly urge you to look more closely at a DMP.

As others have said, it is flexible. Also, it has the advantage that when an account is accepted on to the DMP, the interest charges and charges can be zero-ed on a lot of the credit cards and overdrafts.

This makes the task of paying-off the debts a lot easier as you are not battling with interest being added-on each month.

You are also free to make token additional payments should you work some overtime or have a win on the Lotto.

Good luck with sorting your debts and remeber that on here, we do not judge you for the level of your debts, or how you came to accrue them.

runforlife

incidentofficer wrote: »

Hi Sourcrates,

I am torn between and IVA or DMP which both SEEM to be an option for me at this time, according to Stepchange anyway. Or trying to stave off the creditors until the home situation improves a little more. I guess I am scared of the credit damage (though its' pretty rubbish now!) and not being able to turn to a card for emergencies.

Thanks again.

Regards

Paul

Once dealing with the debt and living off available cash you won't need the credit card. Sounds like you are not quite there yet, but don't worry it will come. It is INVIGORATING not to rely on the 'emergency' credit card. It is rewarding and exciting to see your debt reduce each month - month on month. You will soon find that your spending habits change and spending money becomes less rewarding than it was.

As for credit damage? It's likely that your credit report is already damaged, but don't worry about that. You've got your mortgage and a better rate for you so its not like you need more credit any time soon. Controlling your finances and debt means you live with the available money you have and THAT is amazing! Good luck.

ps If it helps substitute the word CREDIT with DEBT.

incidentofficer

Wow! Thank you everybody (heartfelt) for all your advice, it is really helpful and supportive.

I am very tempted now with going DMP with Stepchange, even though the term is 11 years. I am sure my situation will improve over time and I will be able to pay down quicker. The budget that the Debtremedy tool on Stepchange produces seems rather generous to be honest and I'm beginning to feel quite confident that I will easily have enough cash for day to day and occasional treats.
Am I able to make random extra payments to the "pot"?

I am fearful of IVA & bankruptcy as I am a company Director and these solutions would seriously hamper my job and income.

Keep coming anybody who has advice, it's great to have people prepared to listen.

Thanks

Paul
:A

runforlife

Make sure your budget includes everything and maybe a bit more besides if you understand. Do not cut yourself short. Make sure you look at the budget and that it contains everything you will need. Once you have a few months under your belt and settled down then you can adjust matters.

I think an IVA could be problematic as a Company Director but it is best to get advice from SC on that. They are incredibly friendly and helpful and once you have completed the debt remedy tool give them a call to discuss things. You will soon be on the road to a stress free life.

As for making extra payments you have to understand that the debt calculation to each creditor is made to distribute your payments equally. So if one creditor sees your credit reference report be more favourable to another of your creditors i.e. you have paid them off, you may find that the remaining creditor makes life a tad more uncomfortable. Think of it as ONE debt with ONE payment. Just that it's split up into several portions. Good luck.

incidentofficer

sjw64 wrote: »

Hi
If it helps, I had £64k debt in 2009 (credit cards/loans/me/wife). I decided not to go via stepchange et el and tackle it myself.

I wrote to all of them explaining what has happened, I was full & frank with them all but kept everything in writing (I was petrified at the thought of speaking to them but looking back I wish I had). I asked them all to freeze interest and reduce payments. It’s a complete lottery what might happen as Im convinced it depends who opens your letter. Some of my creditors were brilliant and froze the interest some halved it and one (RBS) refused and increased the APR to %29.9! I even wrote to Barclaycard to complain about their charges (late fee’s/over limit etc) and to my astonishment they wrote back stating they will refund all charges for the last 6 years plus 8% interest! It wrote the debt of with a couple of hundred ££ left over.

The next bit was the hardest. We penny pinched EVERYTHING, We set a budget of £50 per week for everything, food, travel, etc. Anything left over went on the highest %APR, when that went, everything went on the next highest %APR. The first few years were really hard & it looked like nothing was happening, then it literally ‘snowballed’. After 3 yrs the debt was £30k & falling fast. Trust me, it was hard, cycling (car sold) to different shops because their potatoes are 30p cheaper and having no external social life (but Happyish) but its worth it.

I liked the idea of being in control, yes my credit file is trashed but I couldn’t care less. Barclaycard even sent me back my credit card back with £11k limit on it. Do I use it – only for credit file repair.

Although I was extremely fortunate to come into a life changing large sum of money that paid the rest of the debt off, Im convinced it would be all gone by now (the debt).

Whether you do it alone or via Stepcahnge is a matter for you. I personally wanted to go it alone.

If you want (or anyone else) wants a sanitised copy of my letters I sent to all the creditors including the “I want my charges back” from BC, just ask. I try to check these forums every now & then.

Regards

Thanks for that, quite inspiring actually. I would appreciate copies of your sanitised letters when you have a moment, it will give my armoury a good start!

I really appreciate your comments.

Regards

Paul:T