Trying to clear debt without defaulting

2babyboys

Hello all,

I am £25k in debt and desperate to break free. I have been suffering with anxiety and suffered 2 big bereavements recently causing me to wake up and take charge.
I can afford my minimum payments, but am not making any headway in clearing the debts as all incur interest. I am desperate not to default though.
I want to know if any of you have contacted your creditors to ask them to freeze interest while you continue to make payments in an effort to clear the debt quicker? I want to to try and save every penny to tackle my debt but can't with all the interest and the anxiety is making me so unwell. I am also possibly facing a divorce so my situation may change financially. Having looked at my figures, again I will afford minimum payments, but only just and won't leave me much to live from.
I know I can contact debt counsellors like stepchange and have done in the past and although financially I'll be better off I scared of receiving defaults as I won't even be able to rent a house in the future, get a phone contract, a mortgage or anything for another 6 years at least.
I was hoping that if some/all of my creditors froze the interest for a year perhaps that I could clear around £10k as a start and then keep going from there.
I have such awful anxiety that I'm too scared to call my creditors. I did call Natwest, but they were quite unhelpful saying a DMP is do able, but will default me.
Anyone have any suggestions? Many thanks.

National_Debtline

Hi 2babyboys


I'm very sorry to hear about the bereavements and that you are suffering from anxiety. Are you getting any support with that? Cruse Bereavement Care offers support to people of all ages who have been bereaved https://www.cruse.org.uk/. You may also want to contact your GP for help.


With regards to your debts, unfortunately any reduced payment or freeze on interest could have an impact on your credit file. I know you would like to avoid that happening, but a default is not usually going to stop you renting a property, and the damage doesn't last for ever. You will also find it hard to take out any more credit if all of your spare money is being used to pay your existing debts.


Your next step should be to complete a statement of affairs (SOA). If you post it back on here we can offer more advice, just remember to press the MSE format button
http://www.stoozing.com/calculator/soa.php


I would also encourage you to contact one of the free debt advice agencies again to talk through all your options. Good luck with it all.


Susie
@natdebtline

Fireflyaway

When I was struggling only to be able to pay the minimum I took the decision to default. Yes it ruined my credit file but it took pressure off and allowed me to continue to pay the debt but still have a quality of life. Credit files are nonsense anyway. You can still do most things without a good score. Ok a mortgage possibly not, but everything else you need is possible. My score was 94 at one point! I still did everything I needed to do.

sourcrates

Hi,

You cannot have your cake and eat it unfortunately.

Do not worry about defaults, your main problem are your debts, you should concentrate on clearing them using whatever means are necessary, time will heal your credit file, and renting will not be a problem as landlords usually only do a public information check on you, thousands of people who are in some kind of debt management all have to live somewhere, and most will be renting.

A DMP sounds like an ideal option for you, I would certainly check it out with stepchange.

Suseka97

2babyboys wrote: »

......I know I can contact debt counsellors like stepchange and have done in the past and although financially I'll be better off I scared of receiving defaults as I won't even be able to rent a house in the future, get a phone contract, a mortgage or anything for another 6 years at least........... I did call Natwest, but they were quite unhelpful saying a DMP is do able, but will default me. Anyone have any suggestions? Many thanks.

Firstly I'm sorry to hear about your bereavements and about your possible divorce- it's clear you are dealing with a lot at the moment.

What I felt compelled to say, without meaning to be harsh, is that you say you want to deal with the situation but seem reluctant to do what even one of your own creditors suggest is the best option. One of your concerns seems to be renting, and Sourcrates has already given good advice there -the other is that you wouldn't be able to get a mortgage with defaults on your file. But in all seriousness how on earth will you be able to save up the sort of deposit people need these days with your level of indebtness. If you can't make minimum payments now, even saving interest for a short period (because creditors will not hold interest indefinitely) you still won't have much left to put into savings.

From what I've read your only choice is a DMP and accept a trashed credit file will follow - but on the positive - you'll see those balances diminish, you'll feel more in control of your life and if you are lucky enough to get early defaults, 6 years from now all (bad) credit records will vanish and you'll have a sunnier and brighter future.

Also, I've been in a DMP for 5 years now and have had no difficulty getting a mobile contract throughout. If you did, then you could simply get one of those 'pay-as-you-go' sims.

Why not give SC a call and see where you stand - its worth a phone call

worriedDan

I have managed to get Creation and Barclaycard to give me a temporary interest freeze. I was told that providing I keep up the minimum payment, there will be no adverse impact on my credit file.