Lost job - credit card debt

Laura721

Hello all

I would like some initial advice on my situation if possible, my situation is the following.

- Lost job last month, was making £70k+ a year (basic salary plus commission)
- Have a mortgage with other half
- I have credit card debts (only me, not my other half) these are:
Amex - £10,000
MBNA - £12,500 (money transfer cc, interest free for next 2 years)
Tesco - £2,000
Natwest debit account overdraft - £1,800

We are currently making the decision whether to sell the house and relocate back to Spain where my other half is from, or continue on here in London.

Is the best option for me to speak to these lenders and ask them to freeze interest for the next few months until we either a) sell house and will pay these in full or b) get a new job here? Do you think they will do this for me? Do I have any other solutions?

Is an IVA a good idea for me?

Any other advice and suggestions are most welcome. This is the first time I have ever had such problems paying monthly cc debts given I was earning so well previously and I only opened these up last year. Feeling down as I am 31, have always been so in control without credit cards and have clearly had a downfall last year or so. Making me feel anxious and stressed from when I wake up in the morning.

Thank you

sourcrates

Laura721 wrote: »

Is the best option for me to speak to these lenders and ask them to freeze interest for the next few months until we either a) sell house and will pay these in full or b) get a new job here? Do you think they will do this for me? Do I have any other solutions?

Is an IVA a good idea for me?

Hi,

Yes, speak to the lenders, debt collection takes a fair old while, nothing will happen much for 6 months or so, you may get calls and a few letters, but no court action.

After 6 months the debts may be taken to court, or more likely passed to a debt collector.

But speaking to your creditors is the way forward.

An IVA lasts up to 6 years, if you are leaving the country in 6 months, then that is not a practical solution for you.

Laura721

Thank you. What about a Debt Management Plan through someone like StepChange?

sourcrates

Laura721 wrote: »

Thank you. What about a Debt Management Plan through someone like StepChange?

Yes that is also a possibility, but to do any kind of debt repayment plan, you must have an income.

If you are not working, it stands to reason you cannot afford any debt repayments, obviously that will change if/when the house sells, but for now, without a disposable income, you cannot afford to be paying anything, and your creditors would agree with this.

You should write and inform them of your situation, offer a token payment of £1 per month each, if it makes you feel any better, but they cannot take what you do not have can they.

Laura721

What happens to a 30 month 0% interest money transfer credit card if I enter into a DMP, when I am able to continue making the payments as before, later on?

sourcrates

Essentially when you enter a DMP you are defaulting on your contractual payments, in effect the relationship between you and the lender has broken down, they may issue you a default notice because of this, so any preferential interest rate will be lost.

You can start making normal payments again whenever your budget allows, but do not expect to keep the rates you had previously, also it is possible your accounts could be managed by or sold to, debt collectors, and you will not be able to use the accounts again.

Bromis

Hi, firstly sorry that you're in such a rubbish situation. Could you not get yourself another job? Even if it's in a factory or a shop just to cover your debt? It only has to be until you sell your house and then you can clear the debt with the equity from the sale and go to Spain!. Surely it's better to cover even the minimal payments than end up going into a DMP or IVA and ruin your credit history. Am I missing something?