My Story and Request For Advice

losingpoundsandgaininglbs

(apologies for the length of this – didn’t realise how much I wrote until I just finished writing it)

Hi all,

Firstly just want to say what an amazing forum this is, I’ve just recently started reading a lot of the threads in the last few days and the amount of helpful people who are genuinely changing people’s lives for the better is just incredible and has really given me that impetus to get myself sorted.

Anyway, on to my story – Over the last 9 to 10 years I’ve got myself into quite a bit of debt due to gambling, which has steadily got worse over the last few years – something I really am ashamed of and none of my friends or family currently know my situation. I finally had to stop when I lost my last £500 and then had a problem with my car that I couldn’t afford to pay and I couldn’t get any more payday loans to pay off other payday loans. Since that day 3 months ago I have completely stopped gambling and closed all my online accounts. Considering I barely went a day without gambling unless I ran out of money then trust me 3 months is a long time.

So I’m currently in about £21,000 worth of debt, as well as that I’ve got my car which currently has about £6000 left on it, so if we include that then it totals £27,000. The breakdown is as follows:-

Credit Card £6,300
Credit Card £990
Credit Card £2990
Credit Card £2,550
Credit Card £1,500
Loan £4,800
Payday Loan £380 (Defaulted)
Payday Loan £420
Payday Loan £360
Catalogue £850 (Defaulted)
Car £6,000

So I get after tax and pension payments etc, about £1500 a month but after I pay everything I am left with very little and then because all my credit card / loans / payday loans are high interest I basically don’t really reduce my balance on anything, and currently with payday loans due next month I’m going to struggle to make all payments.

My credit rate is already very low, so low I’d struggle to get any credit due to a couple of recent defaults on my file, so I think now would be a good time to default on others and take the hit to try and clear the debt within 3 years. I’ve worked it out and this is achievable if I manage to set up payment plans on each one and don’t get any more interest on them – but my question is whats the best way to go about this?

I can pay fairly decent amounts, for instance £120 on the biggest credit card (minimum payment is £170), £130 on my loan (£240 is the actual payment), but if I keep paying them will they continue to keep my loan and credit cards “live” and keep charging interest once they go over credit limit? (They are all maxed out at the moment so one missed payment will push them over the limit) Or do I just ring them and ask them to stop the interest etc? Whats the best way to tackle this?

Thanks in advance for any replies 

-taff

Phone up stepchange
Consider complaining to the payday loan companies about irresponsible lending - see the very long thread on this forum....
More people with better advice will be along soon

Well done on the stopping gambling by the way

losingpoundsandgaininglbs

Thanks Taff, I was debating phoning stepchange, but I was hoping to try and set up the payments myself - i've done all my excel spreadsheets etc, set up a new bank account to tackle the debt etc - do I ring them specifically to set up a DMP or just ask for advice?

losingpoundsandgaininglbs

Also - i've looked on the DMP thread - but struggling to find the template letters to send out to offer a monthly payment, can you anyone advise?

-taff

You can do a self managed DMP, I'm sure someone will be along to explain, or you can get all the info if you google it. Stepchange sort it for you though and are a credible to companies you owe money to, and will take a lot of the stress out of it. I'm not trying to convince you to use them, just offering an option.
But for the ?'s above ,yes, they can do either
You could give the national debtline a ring too if you like.

-taff

Found this in a link on board sticky

https://nedcab.cabmoney.org.uk/dmp.asp

don't know if it still works, but the PDF file still does.

sourcrates

losingpoundsandgaininglbs wrote: »

Also - i've looked on the DMP thread - but struggling to find the template letters to send out to offer a monthly payment, can you anyone advise?

Hi,

This is the National Debtline version :


https://www.nationaldebtline.org/EW/sampleletters/Pages/Pro-rata-offers-%28sole-name%29.aspx

losingpoundsandgaininglbs

Thanks both for the links - appreciate it.

So back to my original question, do I send this now prior to me defaulting or should I wait till i default, or should I wait until i'm passed to the debt collection agency?

Assuming the earlier the better, but is there any major advantages/disadvantages of the early approach - particularly interest/charges?

Stevie_Palimo

losingpoundsandgaininglbs wrote: »

Thanks both for the links - appreciate it.

So back to my original question, do I send this now prior to me defaulting or should I wait till i default, or should I wait until i'm passed to the debt collection agency?

Assuming the earlier the better, but is there any major advantages/disadvantages of the early approach - particularly interest/charges?

It depends upon the lender in question as some will be more willing to help than others, Ie:- payment set at say £120- per month and you approach them direct with an offer for half they may go either way but if you draft an SOA that you send when requested by any creditors it will help, In most cases they would drop the repayment from you if you go direct but some that are more difficult let them go into default to sort out.

Running a dmp for yourself is easy enough and you do not busybodiesrus.co.uk to help/look into your every move.

sourcrates

losingpoundsandgaininglbs wrote: »

Thanks both for the links - appreciate it.

So back to my original question, do I send this now prior to me defaulting or should I wait till i default, or should I wait until i'm passed to the debt collection agency?

Assuming the earlier the better, but is there any major advantages/disadvantages of the early approach - particularly interest/charges?

Well not always no.

Creditors can mark your credit file "arrangement to pay" if you agree terms too quickly, these "AP" markers stay on your credit file 6 years after you Finnish paying off the debt so twice as long as a default would be there for.

That's why most prefer to be defaulted first, then start the repayment process, also gives you time to save up a reasonable emergency fund too.

But it's really up to you how you choose to run it, you won't be treated any differently by the creditors which ever way you choose to play it.

losingpoundsandgaininglbs

Thanks Sourcrates - so if I choose the default option whats the best way to communicate with the firms? Assuming i've got the following options:-

Ring them and tell them I am going to default and not pay anything? (seems like a tough convo!)
Ring them and tell them I am going to default but make payments as much as I can pay
Don't ring them and not pay anything
Don't ring them but continue to make payments as much as I can pay

Also, I don't actually have a landline (only mobile) - but when I set up most of these I was living with my parents and most have their landline attached, but I don't want my parents inundated with phonecalls - whats my options there? Most websites of my outstanding debts don't allow you to remove landlines.