Token payments

Burgerbar

Hello!! Im a long time lurker who has finally plucked up the courage to ask for all of your's wonderful advice!! Please be gentle with me 😊.

I currently have 2 credit cards, a personal bank loan, an overdraft and a payday loan totalling £8600. The overdraft and the personal loan are both with the same bank so 4 creditors in total.

I have never ever missed a payment on any of these but am now in a position where I will not be able to afford the contractual payments for (I'm anticipating) the next few months.

Ive considered several different options including a DMP and have stripped back and re-stripped back my budget countless times (beans on toast for tea anyone?!) but I dont feel as though any of them are suitable for me. My situation will not be a long term one therefore I dont really need a long term solution, I just need a few months (6 maximum) rest bite before i can continue with normal repayments.

I'd like to start making token payments to all my creditors bar my overdraft which I will not be paying anything into except enough to cover the fees. Im fully aware of the impact this will have on my credit rating and am not bothered in the slightest. I have no interest in taking on any additional credit.

So that said, I have some questions that I would reeeeeeallly super duper appreciate someone helping me with (and yes I am aware that some of them probably sound very obvious but I think i just need to have it spelt out to me like a step by step guide).

1) How exactly do I go about doing this? Do I write to my creditors before I start making token payments or the other way around? Is it best to ring or write? Is it really just as simple as saying "for the next how ever many months I can only afford to pay x amount but I am planning on upping these payments to the normal contractual amount as soon as my circumstances improve (which they will)"?

2) Having never ever missed a payment for anything in my whole life, stopping paying is a very scary prospect!! What should I expect to happen in the short term? Will I get someone at my door / angry phone calls straight away? Im guessing charges and interest will continue to be applied?

3) Finally, a small portion of my debt was accrued by gambling. Something that I am not proud of and that I am getting help for. Do you think my bank is likely to challenge my token payments as they will be able to see where my (their) money has gone? If I wrote to the loans department only would they actually be able to view my current account transactions?

Has anybody else made token payments for a short while only whilst they were sorting themselves out?

Im really sorry if I have come across as naive or stupid, just very very new to this!

Thank you.

12_month_challenge

Hi Burgerbar and welcome

I am not really in a position to offer the best advice as you can see from my signature. However I have been given some excellent tips and advice from the lovely, honest, non judgemental people on here.

Someone with more knowledge will be long soon so stick around and don't apologise.

Good luck and keep updating

Burgerbar

Thank you so much for taking the time to read my post and for replying �� .

National_Debtline

Hi Burgerbar

It’s best to write to your creditors to make token offers, and letting them know that you intend to increase payments after several months is a good idea. Include your budget with the offer. I'd say it's better to write to them before making the token payment as it shows you're being pro-active and planning ahead.

We have a template letter you can use here:

www.nationaldebtline.org/EW/sampleletters/sole-letters/Pages/Token-payments-or-no-offer-of-payment-(sole-names).aspx

Make the payments anyway, even if they don’t agree, as it shows goodwill.

In the short term they may write to you or telephone you to remind you that a contractual payment has been missed but I wouldn’t expect anything too drastic to happen.

I don’t think the fact that some of your debt was accrued through gambling would have any bearing on the bank accepting your offer or not.

James
@natdebtline

12_month_challenge

As for the gambling I too have had many times when I have played on line. Even though I couldn't afford it .However it got to the point where i would play,win (sometimes) then play it all away.

I suddenly woke up and realised its a mugs game. I closed all accounts and now focus all of my energy on my debt busting. I must admit I fell off the wagon but am back with a vengeance
There will be ups and downs but you can do it.

Have a really good read of peoples success stories etc it keeps you so motivated .

Best of luck

Burgerbar

Thank you James thats very reassuring that you don't think anything too drastic will happen in the interim period.
How do you suggest I should make the token payments? At the moment my monthly loan payment is taken straight from my account but obviously if there is no money in there it will take my overdraft over the agreed limit. What will happen then? My next loan payment is due 1/9/15 - should I just not pay that one and then write to the bank with my offer? Sorry for all the questions!

12 month challange, thats exactly what I'm like. Online bingo and slots!! I can go months without playing but then suddenly get an urge!! Thank you for your reply, its nice to know I'm not the only one.

12_month_challenge

Burgerbar You are certainly not the only one. There are people on here who have been there also and came out the other end.

It has been difficult for me at times not to play again but I just keep reading through the forums and somehow it takes away the urge to chuck my money away.
I have finally woken up and look forward to paying small amounts of my money off CCs and getting a long term buzz as opposed to a short term one on line gaming
I emailed each gaming company and told them a story of how I had booked a holiday (little white lie) and was saving up and how I wanted to remove temptation.
My accounts were closed no questions asked about addictions etc.

It actually felt good

Try it it helps.

crazy_cat_lady

Just wanted to say good luck with it all. James has given you some sound advice, so I won't add anything to that. But do post on here - I find it really helps me to stay on track.

National_Debtline

It’s no problem to ask questions. If you can’t afford your next payment to come out of your account it’s best to cancel the direct debit, otherwise you’ll probably have bank charges added which will increase your debt. Send your token offer letter as soon as you can.

It’s really up to you how you make the payments. You could set up a standing order from your bank account if you have your creditor’s details, send a cheque or postal order, or request a paying in slip.

I meant to say before that in the template letter I linked to it requests that interest and charges are frozen on your debts while you can only afford token payments. It’s up to the creditors whether they agree to this but they may be reasonable.

James
@natdebtline