where to start

so_very_confused

hi Fishfinger
All judgements aside. Bankruptcy is not an easy option it has implication, however in your case it might be worth looking at. I would advise you to look at the Bankruptcy board and maybe post on there. I speak as someone currently on a DMP.
svc

redpete

fishfinger1 wrote: »

phone contracts are up in Oct so I will not be renewing those

have you tried contacting them to see if there's any way to reduce the contract now, e.g. go on a lower call and/or data plan?

presents I have budgeted for the 2 childrens birtdays £60 each and £200 each at Christmas, me and partner don't buy for each other

that's way to much when you have less than no money.

Do you have anything that could be sold to help pay off the debt, some of the stuff you spent all that money on?

As several others have suggested you need to get help from one of the debt charities, especially helpful if you are confused about the options.

fishfinger1

redpete wrote: »

have you tried contacting them to see if there's any way to reduce the contract now, e.g. go on a lower call and/or data plan? that's way to much when you have less than no money.

Do you have anything that could be sold to help pay off the debt, some of the stuff you spent all that money on?

As several others have suggested you need to get help from one of the debt charities, especially helpful if you are confused about the options.

Morning, yes I have been selling items to pay off some of the debt

fishfinger1

sourcrates wrote: »

A default draws a line in the sand so to speak, you know that 6 years from that date, the default will be gone, paid or not.

Most creditors just pass on bad debts to DCA's for collection, debts can be passed around many DCA's sometimes, this process can take many months, even years.

When they get fed up, they sell the debt on to a specialist debt purchaser, such as Lowell, or Cabot, who then spend another 6-12 months trying to get you to pay, it's usually at this point when legal action can be a possibility, but usually only if you haven't paid, or made an arrangement to pay.

The system takes a long time to play out, nothing happens quickly with consumer debts, I would not panic if I were you.

Morning Sourcrates, can I just ask am I better to keep making token payments now to hopefully get defaulted by all my creditors and once defaulted is all interest stopped, or should I just bite the bullet now and start arranging a DMP with the likes of stepchange, ive been reading that all creditors do not stop interest

KirstyO

fishfinger1 wrote: »

when you do the budget for a DMP do you over budget on things slightly so you are able to live comfortably, and once your on a DMP is all interest stopped

If you speak to someone from Stepchange or National they would give you some indication of what they consider normal for your situation. If you have a very specific reason for having a particularly high budget in a category (or even a particularly low one!) they can make a note with it to justify why that is the case. When doing budgets for a DMP some people decide to 'take up smoking' or 'get a pet dog' in order to allow them more flexibility with their budget.


With regard to 'living comfortably', in short you don't. You live on the smallest amount of money possible until you are out of this mess. If you are living comfortably, able to buy coffee and sandwiches every day, able to give the kids a treat as soon as they ask for it etc you are not doing your best to clear your debts and right now that HAS to be your priority. I'm not saying deny your children of things - what I am saying is use this as an opportunity to teach them the value of money. Encourage them to save for the things they want, show them how you are having to budget more frugally now because you have used short term solutions in the past. Use this as a tool for making sure they don't come to you in 10 years with their own debts - expecting you to help!


Interest - it is dependent on the creditors. Some are better than others, but if you set up with a charity they have more pull in getting interest stopped than you may do alone. Even if you want to go self managed in the end it can be helpful to have stepchange etc do all of the setup and admin, then you take it on later when you think you can manage it yourself.


I found out that it doesn't take long after clearing your debts for things to improve when you don't have that weight on your shoulders and that money disappearing out of your bank each month.


In the nicest possible way you need to tough up, get more advice if you feel you need it, and get this debt-busting on the road.



When I started my debt journey I had nearly 5k of debt, which was a big deal for someone of my age, living alone, on minimum wage. TO start with I was only able to pay £44 a month towards it, barely enough to be on a DMP. By the end through working my way up at work, and through being sensible, and through a bit of inheritance, I was able to make full and final offers and when it got to the last £180 of the debt I was able to bite the bullet and just get it gone. Making the first move is scary, and does feel like a life sentence, but when you commit to getting rid of debts and putting every penny towards shifting them, its amazing what you can do.


There are records on this very forum of people who have cleared tens of thousands of pounds of debt in 12 months or less - proving that it can be done quickly if you're willing to make the sacrifices. Go SIM only on mobiles, shop at aldi/lidl, batch cook and freeze meals, always take packed lunches, have film nights at home instead of going to the cinema, in nice weather go to the park or the beach with a picnic instead of to a theme park, make gifts or give people things with meaning rather than value...the list of cost cutting opportunities is endless if you're open to doing everything you can.


I wish you well on your journey, and I'd love to hear how you get on. Use these boards to ask questions and read about the experience of others, but don't use it to dither about thinking about the best thing to do - be decisive and be debt-free!

fishfinger1

KirstyO wrote: »

If you speak to someone from Stepchange or National they would give you some indication of what they consider normal for your situation. If you have a very specific reason for having a particularly high budget in a category (or even a particularly low one!) they can make a note with it to justify why that is the case. When doing budgets for a DMP some people decide to 'take up smoking' or 'get a pet dog' in order to allow them more flexibility with their budget.


With regard to 'living comfortably', in short you don't. You live on the smallest amount of money possible until you are out of this mess. If you are living comfortably, able to buy coffee and sandwiches every day, able to give the kids a treat as soon as they ask for it etc you are not doing your best to clear your debts and right now that HAS to be your priority. I'm not saying deny your children of things - what I am saying is use this as an opportunity to teach them the value of money. Encourage them to save for the things they want, show them how you are having to budget more frugally now because you have used short term solutions in the past. Use this as a tool for making sure they don't come to you in 10 years with their own debts - expecting you to help!


Interest - it is dependent on the creditors. Some are better than others, but if you set up with a charity they have more pull in getting interest stopped than you may do alone. Even if you want to go self managed in the end it can be helpful to have stepchange etc do all of the setup and admin, then you take it on later when you think you can manage it yourself.


I found out that it doesn't take long after clearing your debts for things to improve when you don't have that weight on your shoulders and that money disappearing out of your bank each month.


In the nicest possible way you need to tough up, get more advice if you feel you need it, and get this debt-busting on the road.



When I started my debt journey I had nearly 5k of debt, which was a big deal for someone of my age, living alone, on minimum wage. TO start with I was only able to pay £44 a month towards it, barely enough to be on a DMP. By the end through working my way up at work, and through being sensible, and through a bit of inheritance, I was able to make full and final offers and when it got to the last £180 of the debt I was able to bite the bullet and just get it gone. Making the first move is scary, and does feel like a life sentence, but when you commit to getting rid of debts and putting every penny towards shifting them, its amazing what you can do.


There are records on this very forum of people who have cleared tens of thousands of pounds of debt in 12 months or less - proving that it can be done quickly if you're willing to make the sacrifices. Go SIM only on mobiles, shop at aldi/lidl, batch cook and freeze meals, always take packed lunches, have film nights at home instead of going to the cinema, in nice weather go to the park or the beach with a picnic instead of to a theme park, make gifts or give people things with meaning rather than value...the list of cost cutting opportunities is endless if you're open to doing everything you can.


I wish you well on your journey, and I'd love to hear how you get on. Use these boards to ask questions and read about the experience of others, but don't use it to dither about thinking about the best thing to do - be decisive and be debt-free!

Thankyou Kirsty for taking the time to write such a lengthy post, you have made some very valid points there and I will take it on board, today I have had 1 of my Barclays accounts defaulted which im guessing is a good thing

fishfinger1

today I have received a letter from Barclaycard issuing me a default notice my accounts now closed and they need payment in full, so is now a good time to contact them and arrange a payment plan with them? also will the interest be stopped on the account now?

KirstyO

default is a good thing, as it means in 6 years time from today that account won't be showing on your credit file any more, even if it's not paid off.


you do need to contact Barclaycard explaining that you are in financial difficulty, and would like to arrange a payment plan with them. Now that the account is closed it doesn't automatically mean that interest will be stopped. It may just mean that you can't spend any more on that card, even if you clear some of the amount owing. You should clarify when you contact them.


Make sure you do everything in writing, so that you minimise chances of misunderstanding, and people being able to say they did or didn't say/do something.

fishfinger1

KirstyO wrote: »

default is a good thing, as it means in 6 years time from today that account won't be showing on your credit file any more, even if it's not paid off.


you do need to contact Barclaycard explaining that you are in financial difficulty, and would like to arrange a payment plan with them. Now that the account is closed it doesn't automatically mean that interest will be stopped. It may just mean that you can't spend any more on that card, even if you clear some of the amount owing. You should clarify when you contact them.


Make sure you do everything in writing, so that you minimise chances of misunderstanding, and people being able to say they did or didn't say/do something.

So in the letter do I put my suggested monthly payments and ask them to freeze interest on the account. Also do I need to make my payments to an amount that will see the balance paid off within the 6 year period. Or should I just be offering what I think I can comfortably afford

sourcrates

Have you given up on the idea of Bankrupcy ?

Things are changing from April, everything is done online, and there is no longer a requirement to appear in court, the fee is also changing, and it can be paid in instalments.

If you have no assets, and you don't work in a job where this would be a problem, it's certainly worth looking into.

http://m.stepchange.org/debt-information/debtsolutions/Bankruptcy-changes

No point spending years and years on a DMP when you don't have to.