Advice:

tomxlisa

Not sure if this is the correct forum but looking for some advice, am paying back a few cards at the moment and a catalogue, the thing is at the moment I cannot afford to pay much and can just about cover the minimum payments, trouble is on some of them I am paying like £40 minimum payment and the interest is like £35 so there not clearing and it's just a vicious circle, I have been advised to speak to step change, I really don't want to totally destroy my credit file which is why I want to do something and at least still pay it back, I don't want to go down the route of defaulting to my creditors, I still want to pay it's just the interest which is the major factor, I take it if I am still paying something back and not just leaving it and letting my creditors default me is better for my credit file than a default on there, anyways suggestions welcome. Thanks.

MrsSave

I'd start by filling in an SOA (Statement of affairs), using the website below. Be completely honest in it (look back at past statements to make sure you aren't leaving any gaps).

http://www.stoozing.com/calculator/soa.php

Have you looked at applying for a 0% credit card so you can transfer the balance from your higher interest accounts?

MrsTinks

The real question here is: Will you in the foreseeable future be able to pay back more than you are now? If the answer is no then you need to really look carefully at how long you will be paying this back at the rates you are.

If you think you can resist temptation and will cancel the cards you have then as MrsSave says: look for a 0% apr card and transfer the balance there. At least then you won't be paying the extortionate interest you are now. However you HAVE to be able to resist leaving your cards and your accounts open. You need to close them so you are not risking doubling your problem.

Do fill in the SOA and let's see what the best options might be for you.

National_Debtline

Hi

I agree with the others that starting with a SOA is a good idea. See whether there are any areas of spending where you might be able to cut back a bit to maximise the amount you pay on debts. If you post your figures in the forum here I’m sure you’ll get some helpful tips and suggestions.

The only way you can stop paying interest on credit cards without defaulting is a 0% balance transfer.

James
@natdebtline

sourcrates

tomxlisa wrote: »

I cannot afford to pay much and can just about cover the minimum payments, trouble is on some of them I am paying like £40 minimum payment and the interest is like £35 so there not clearing and it's just a vicious circle, I have been advised to speak to step change, I really don't want to totally destroy my credit file

Hi,

I would say do an SOA first off.

The others have mentioned a "0" % transfer option, but in reality thats just another holding maneuver, your real problem is that your current borrowing is unafordable for you, these transfer deals dont last long, and you need impeccable credit worthiness in order to qualify for the "0" % deals, very soon you'd be back in the same position again.

If you cant bring your balances down within a reasonable time scale, or you cant pay extra to offset the interest payments, then you have only one other option and that is to default on the accounts altogether.

Harsh but essentially true i`m afraid, there is no magic 3rd option here, you either struggle on as you are or admit you need help, contact stepchange, see if the interest can be stopped, if not then defaulting is the only other way.

EssexHebridean

If it helps, it's a pretty rare SOA that we can't find some slack in! Anything that can be freed up to add to the payments against the debt - by "snowballing" - so hitting the highest interest rates first - will help your situation.

Possibly most importantly of all - have you stopped spending on the cards and the catalogue? That's vital if you're already struggling. Cut the cards up, if you have no emergency fund keep one back but leave it with a trusted friend or relative for safety so you can only get at it in a genuine emergency.

Anthorn

tomxlisa wrote: »

Not sure if this is the correct forum but looking for some advice, am paying back a few cards at the moment and a catalogue, the thing is at the moment I cannot afford to pay much and can just about cover the minimum payments, trouble is on some of them I am paying like £40 minimum payment and the interest is like £35 so there not clearing and it's just a vicious circle, I have been advised to speak to step change, I really don't want to totally destroy my credit file which is why I want to do something and at least still pay it back, I don't want to go down the route of defaulting to my creditors, I still want to pay it's just the interest which is the major factor, I take it if I am still paying something back and not just leaving it and letting my creditors default me is better for my credit file than a default on there, anyways suggestions welcome. Thanks.

Debt Management Plan (DMP) which is free with Stepchange. But if you can afford to make the payments you're making now that's unlikely to change. However in the case of a DMP your lenders may not default you because they are receiving payment and may even agree to a reduction in interest. Stepchange will handle that for you.

Defaulting is a possibility but it will be going from the frying pan into the fire resulting in demands, selling of the debt or even a County Court Judgement against you. After all that which will shred your credit history you still have to pay your debts. It doesn't take a genius to work out that defaulting is an extreme best avoided measure!