Drowning In Debt

[Deleted User]

Craig32 wrote: »

Why should I go myself, snowballing, when I will be paying interest, when I could go on a plan and have interest frozen?

.

How does anyone know this for sure, for all the posts and aspersions made about being able to get compensation back in cases, (particularly that of payday loans for example) I'd bet this wasn't true for the person who chose to 'snowball' as it just means you are rid of debt quicker so minimise the interest charged, along with have proven the ability to repay


Those who go on repayment plans will always have some kind of sacrifice - trashed credit report and also the late payment charge possibly before interest is froze or suspended so it isn't always that win/win at all

Craig32

Hi Folks,

Still awaiting feedback on the job interviews. No news is good news. I have been in touch with each company/agency, and they are still conducting interviews/yet to make any decisions.

I have spent the past week studying DMP's religiously, and I am pretty certain I am going to go down this route. CC's monthly payment paid now, so I still have until August 25th before the next bills are all due, so I still have some time to think more about it.

I feel this route would suit me better to snowballing, pretty much because these lines of credit would no longer be available to me. Whereas, if I chose to snowball, I would still have available credit on my credit cards, and whilst I am confident I wouldn't gamble the money, the relapse is too big a risk. I could see myself dipping into the available credit for treats etc too. If I want to clear my debt once and for all, I believe the DMP is the way that would work best for me.

I also am hoping the fact that I have absolutely no assets, that my creditors will freeze the interest as I would have nothing to lose going down the bankruptcy route, whereas they would have everything to lose. Should there be a couple who decline to freeze, then I may look at the DDP route, but I will cross that bridge when it comes.

In preparation, I have opened a new bank account with a bank not associated with my debt. Once that arrives (late this week/early next week) then I will begin the process of cancelling all DD's.

I'm also going to do the DMP myself, and have come with the following figures:-

Expenditure Cost
Rent £400.00
Transport £125.00
Food / Toiletries £195.00
Telephone / Internet £15.00
Satelite £20.00
Medical £25.00
Work Meals £30.00
Pets £30.00
Tobacco £20.00
Medicine £10.00
Hairdressing £12.00
Clothing £30.00
Sports / Hobbies £15.00

Total £927.00

Income £1,780.00

Surplus £853.00

That will be £853 debt being paid out to the following:-

Debts Total Percentage Pro Rata
Hitachi £10,443.45 36.82% £314.08
Barclaycard £5,600.00 19.74% £168.41
Natwest £3,220.00 11.35% £96.84
RBS CC £1,800.00 6.35% £54.13
RBS OD £4,500.00 15.87% £135.33
Onstride £1,000.00 3.53% £30.07
188 188 £1,100.00 3.88% £33.08
Mr Lender £400.00 1.41% £12.03
Lending Stream £300.00 1.06% £9.02

Total £28,363.45

This would take me to being debt free come May 18th.

What do people think the chances of each creditor accepting this offer? Many of the creditors will be receiving similar (some even more) than they currently get each month.

My only concern are the 2 payday loans, as I haven't even made any payment to them, and the repayment for them is so low. My plan is to have them paid off before the end of the year with additional payments to them, and I plan to make this known in my letters I send out.

I also cannot lie, the £927.00 for monthly costs for myself have been exaggerated to my current situation probably to the tone of £300 ish. I choose to do this as it will allow me to build an emergency pot, pay off the pay day loans earlier, as well as when I do move out, it should cover the costs there.

I was almost tempted to try and alter them further, to give me an extra £200 a month, as I would then try and use this to build a settlement figure for creditors. My thinking there was that if they all freeze interest, offering a settlement figure could be offered at a much lower value to what a creditors debt may be, so I would paying the debt off quicker (even if on the eye it would be furthering the time to pay it).

A few of questions:-

1) I have combined debt of £2100 to 2 people (girlfriend/friend). Can you include this in your pro rata?
2) I am struggling to find many templates for letters to be sent. I am looking for the first letter to be sent advising creditors of your situation, as well as the next letter with your pro rata offer. Does anyone have any links?
3) Where are you best to send these letters? Company HQ's? Or certain department? Contact the creditor & ask for these details, or search online? RBS for example, haven't been the easiest to find an address for.
4) Am I best to contact the creditor by phone from the off, or is sending a letter as the first stage of contact acceptable?
5) Do I need to advise them of the reason for my financial situation? Is it a good idea listing it all came from being a gambling addict?

I am sure if I have any more questions I will come back here, but any feedback would be appreciated. I know this is a lot of reading.

Craig32

Hi Folks,

Just got the dreaded redundancy news from my work there. Yesterday it was announced they would be be a 2nd phase coming, and today it was announced with my name being one of them.

On the job front, the only one open at the minute is Iceland, which I am expecting to hear back from this week they said, although I am not entirely confident.

So as things stand, my last day in the job is Friday October 9th.

With no income from that day forward, for x amount of time, my thinking is now I will definitely have to go down the bankruptcy route.

Anyone have any thoughts on this? Am I best to get the ball rolling now for this, or should I wait until the date of having no job.