defaulting on lloyds CCs - any advice?

twists_and_turns

I've been struggling to meet my minimum repayments on my Lloyds credit cards for ages and I've now reached a point where I just don't have enough income to keep the repayments up.

I have two cards with Lloyds. A Visa with £10000 limit and a Mastercard with £750 limit. Both only have about £20 spending limit left.

I'm paying £200 min payment on the Visa and £15 min payment on the Mastercard.

I've looked into different ways of dealing with this (bankruptcy, iva, loan, balance transfers and defaulting) ... and it seems that the cleanest way forward is to default and then arrange for the interest to be frozen and then arrange lower monthly payments.

Bit concerned about the consequences of defaulting, but have been assured that I should be able to re-build my credit score fairly quickly.

Just wondered whether I would be able to default on the Visa, but keep the Mastercard going in order to have access to a Credit Card?

Has anyone been in a similar position?

Thanks

Scarlett.1974

If I were in your shoes then I would be wary about "just stopping paying them" - maybe call CCCS or Payplan for advice on your debts? Or post your SOA on here so we can see if we can help reduce your outgoings so you can continue to pay your debts.

I'll warn you too, H and I have quite a lot of debt with Lloyds and they were one of the first companies to turn 'nasty' when we were struggling. We did a DMP through Payplan and they made things VERY difficult - calling up to 5 times a day, every day etc...

GeorgeUK

Who was it that told you you could rebuild your credit score fairly quickly?
Defaults stay on your history for 6 years.

Have you tried to get another CC that has a 0% APR promotion or a Life of Balance (LOB) card?

Edit: You can see from my signature i had about £8k with Lloyds and managed to get most of that transferred to other 0% accounts. Have you been turned down by any companies?

spurs501_2

Hi.
My experience for what it's worth. I had a Lloyds Credit Card with a 10K balance and then ran into financial difficulties. After defaulting they agreed to freeze all interest and let me pay £50 per month for a six month period. The initial six month period ended last week and they called to ask if I wanted to continue with the same arrangement, no need to send in a new SOA.

Of all my creditors they have been one of the best. Okay they called me 3 or 4 times a day, every day, before I set up the arrangement but once it was in place I never had another call.

Only agree to pay what you can afford though because if you miss a payment during any arrangement the demanding calls will only start up again!!

Hope this helps?

twists_and_turns

Thanks for the heads up about Lloyds. They've been particularly unhelpful over the phone, bouncing me back and forth between departments with no end-result. Although I went into a Lloyds branch the other day and one of their staff was really helpful and has called me back a number of times trying to help, and not just force me onto a loan.

At the moment my income is roughly £800 a month, with £450 going on rent and utilities. £130 on travel. Which leaves £220 for food and credit card bills.

I have only recently started temping, so the income isn't guaranteed, but I hope to find a permanent position soon.

Also I should be due back some tax, as initially have been taxed heavily with the BR/1 tax code, and have only just moved over to 522L. I should also be able to receive Working Tax Credits as the income is at a low level.

So should put monthly income up to about £1000 per month, which helps.

I'm really not spending that much money at the moment. No luxury items, so it really is a case of finding better paid work and working out what the best option is regarding the credit card debts. And have already pretty much sold everything I had of any value on ebay and amazon marketplace.

A loan of £10000 over 5 years works out as £300 per month, which is out of my budget. Balance transferring £10000 at 0% interest, still requires min repayment of 3% which works out also at £300 per month. Obviously a better option as it eats into the debt, but still out of my budget at the moment.

I have opened up a safe account with A&L, and have applied for a new CC while I still have my credit rating in-tact. Also gives me the option of balance transferring some of the debt across depending on what happens.

It seems crazy that Lloyds won't freeze the interest on my cards and reduce the payments until I have defaulted.

twists_and_turns

Thanks for all your advice on this. It really helps hearing from people who have been through it.

Spurs501 ... when you defaulted did you use CCCS or did you setup the payment scheme with Lloyds?

spurs501_2

twists_and_turns wrote: »

Thanks for all your advice on this. It really helps hearing from people who have been through it.

Spurs501 ... when you defaulted did you use CCCS or did you setup the payment scheme with Lloyds?

Hi.
I'm doing all my own arrangements with my creditors (not involved CCCS or Payplan etc). I basically wrote to them (recorded delivery of course) and stated I fully intend to pay off my balance BUT cannot pay money I simply do not have). They will write back and ask you to telephone them to make an arrangement. Stand firm and only offer what you know you can afford each month. It's no use offering an amount to keep them happy but which you know you can't really afford to pay.
S501.