Persistent Debt

Haveyoufedthecat

Hello Everyone

I am in what's classed as persistent debt. I owe approx £13,000 on four credit cards combined and a £1600 overdraft. Have had to cut down greatly at work due to sick husband who is 20 years older than me. I rang Barclaycard the other day as I had received a letter (the second one) about persistent debt. I have to say they were very nice on the phone. But when I enquired as to what payments and what would happen if the card was suspended THEY SAID THEY DIDN'T KNOW 😳. I am pretty cash strapped and am wondering about a debt management plan or something if anyone has any advice. Sorry to bore you all with this on Xmas Eve. Best wishes.

sourcrates

Hi,

Your not boring us, between now and the early part of January is usually a busy time on the forums, the cost of Christmas tends to focus the mind somewhat, and it’s usually around now that bad debt problems are highlighted, and folk tend to look for advice to make a new start, so it challenging, but never boring.

A good first step is a statement of affairs, post it on here, don’t forget to format for MSE, then we can offer constructive advice.

Click the link :
https://www.stoozing.com/soa.php

Haveyoufedthecat

Thank you sourcrates... I have started it...

Mr_Moneypenny

Hello,
Speak to your local Citizens Advice. They may be shut now for Christmas but worth giving them a call or checking when they're open. They will be trained and experienced in all kinds of debt situations so don't be afraid to ask them for help. You are far from alone in this situation (I also am in persistent debt). Long gone are the days when debt is avoidable and people had enough to get by on. Try not to worry over the Christmas period if offices are closed and there is nobody to advise.
There may be simple solutions to sorting out your problems, if you or your husband are over 55 and have a property you may be able to do an equity release or release pension funds, if not, you may be able to borrow against your property if you have one?
It's hard trying to keep a household going when illness strikes but there may be benefits you or your husband are entitled to such as Carer's Allowance or Attendance Allowance, for example, all this can be looked into by the Citizen's Advice.
Try and enjoy Christmas as much as you can. I know it's hard when everyone is celebrating and you suddenly have a change in the normal routine which gives you time to think and worry but, believe me, there is plenty of help out there so don't feel that you are alone.
Good Luck and Happy Christmas

fatbelly

Haveyoufedthecat wrote: »

I rang Barclaycard the other day as I had received a letter (the second one) about persistent debt. I have to say they were very nice on the phone. But when I enquired as to what payments and what would happen if the card was suspended THEY SAID THEY DIDN'T KNOW ��.

This illustrates the problem with the persistent debt rules. They sound like a good idea to someone sitting in an FCA office but the detail has not been thought through.

I work at CAB and we're as confused as everyone else.

The best guide at the moment is here

https://debtcamel.co.uk/credit-card-pay-more/

Anyway in your case the advice being given is good so post a soa and we'll have a look at it.

Haveyoufedthecat

And here everyone is my statement of affairs. I have also added in husband's credit card too. I do receive Carers Allowance and we receive Housing Benefit. Husband Income is State Pension and Attendance Allowance. Many thanks to you all. I do feel better talking about it on here...

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 436
Partners monthly income after tax....... 980
Benefits................................ 782
Other income............................ 0
Total monthly income.................... 2198

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 482
Management charge (leasehold property).. 0
Council tax............................. 12
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 49
Telephone (land line)................... 22
Mobile phone............................ 16
TV Licence.............................. 13
Satellite/Cable TV...................... 8.99
Internet Services....................... 17
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 60
Road tax................................ 17.5
Car Insurance........................... 29
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 45
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 60
Other insurance......................... 0
Presents (birthday, christmas etc)...... 24
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 30
Emergency fund.......................... 200
Total monthly expenses.................. 1500.49


Assets
Cash.................................... 500
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
BARCLAYCARD....................4346.98...88.72.....22.69
BARCLAYCARD....................2372.34...62........22.69
CAPITAL ONE....................2850......136.......24.93
BARCLAYCARD (PARTNERS..........9300......222.......22.69
BARCLAYS OVERDRAFT.............1672.45...0.........0
VANQUIS........................2498.96...140.......39.9
Total unsecured debts..........23040.73..648.72....-


Monthly Budget Summary
Total monthly income.................... 2,198
Expenses (including HP & secured debts). 1,500.49
Available for debt repayments........... 697.51
Monthly UNsecured debt repayments....... 648.72
Amount left after debt repayments....... 48.79

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,040.73
Net Assets.............................. -22,040.73

Whilst writing I might just add that I am just about on my final Persistent Debt letter to come in February/March 2020. I cannot up payments really anymore. Husband is too sick for me to work full time which is why I am receiving Carers Allowance. I myself have my own health problems. Thank you all so much for listening.

Haveyoufedthecat

sourcrates wrote: »

Hi,

Your not boring us, between now and the early part of January is usually a busy time on the forums, the cost of Christmas tends to focus the mind somewhat, and it’s usually around now that bad debt problems are highlighted, and folk tend to look for advice to make a new start, so it challenging, but never boring.

A good first step is a statement of affairs, post it on here, don’t forget to format for MSE, then we can offer constructive advice.



I have posted the SOA

Willing2Learn

Hi

Just having a quick look at your SOA and I think something is wrong. You have put down that you save £200/month for your Emergency Fund (EF), yet you only have £500 saved. How come? Have you only just started saving toward your EF?

Other thoughts:

• How come your council tax is only £12/month? Is this a typo?
• Have you looked at MSE Cheap Energy Club to see if you can get your gas and electricity lower?
• Are your water rates spread across 10 or 12 months and is it metered?
• There should be something budgeted toward home contents insurance
• Can you really afford a holiday at the moment?

If you were to drop your EF to £50/month, then maybe you could start a debt snowball rolling (beginning with the overdraft and then the Vanquis account).

Alternatively, you could default on all the accounts so that interest and fees are frozen. Then you could start an informal Debt Management Plan (DMP)

Edit: Seasonal greetings to you and your husband.

Edit #2:
Have a look at following web resource on DMPs:
https://nedcab.cabmoney.org.uk/dmp.asp

And you might find the following link useful in describing the two possible methods to snowball your debts.
https://www.thebalance.com/debt-snowball-vs-debt-stacking-453633


Edit #3:

Haveyoufedthecat wrote: »

I cannot up payments really anymore. Husband is too sick for me to work full time which is why I am receiving Carers Allowance. I myself have my own health problems.

How bad is you own health? Is it likely to impact on your ability to work in the near future?

monetxchange

I’m guessing this is an aspirational SOA rather than the reality, because it appears like you’re living within your means here. If you were, you wouldn’t have credit card debt. Not a criticism, but a reality most of us have been in. It might help to sit down with a years bank statements and fill it out honestly, doing an average for each category. Then you’ll see where your money is slipping away too.

Agree with the above that you could cut holiday. Have a shop round for your insurance on renewal and see if you can reduce as they’re quite high. Who’s the third adult in the house: a grown up child? Any reason they’re not contributing/are eligible for benefits if unable to work or study?

Sorry to hear things are such a struggle at the moment. Have a lot of admiration for carers. Well done on taking the hardest first step of facing up to the debt. You’re in the right place

MovingForwards

Are you in private rental or council / housing association? As the rent is an odd figure.

With your gas / electric, are they on constantly due to your husband's health?

Do you mind giving a clue as to your husband's health as there may be additional help available.

Have you done a benefit check recently to make sure you are both receiving everything you should be?

Is your husband likely to ever return to work? If he isn't it may be worth looking at a DRO.

Could also consider a DRO for yourself (depending on what your work is). Some of your figures would have to come down, some would have to get increased.

At a guess you are 40's, your husband is 60's, it could be the clean break and start over that you need.

Alternatively, a DRO for your husband and a DMP for you, or the other way round.

I wouldn't usually say it, but logically as your own health isn't great, it may just be the right thing to do to take one pressure off yourself.

fatbelly

Haveyoufedthecat wrote: »

And here everyone is my statement of affairs. I have also added in husband's credit card too. I do receive Carers Allowance and we receive Housing Benefit. Husband Income is State Pension and Attendance Allowance. Many thanks to you all. I do feel better talking about it on here...

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 436
Partners monthly income after tax....... 980
Benefits................................ 782
Other income............................ 0
Total monthly income.................... 2198

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 482
Management charge (leasehold property).. 0
Council tax............................. 12
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 49
Telephone (land line)................... 22
Mobile phone............................ 16
TV Licence.............................. 13
Satellite/Cable TV...................... 8.99
Internet Services....................... 17
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 60
Road tax................................ 17.5
Car Insurance........................... 29
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 45
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 60
Other insurance......................... 0
Presents (birthday, christmas etc)...... 24
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 30
Emergency fund.......................... 200
Total monthly expenses.................. 1500.49


Assets
Cash.................................... 500
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
BARCLAYCARD....................4346.98...88.72.....22.69
BARCLAYCARD....................2372.34...62........22.69
CAPITAL ONE....................2850......136.......24.93
BARCLAYCARD (PARTNERS..........9300......222.......22.69
BARCLAYS OVERDRAFT.............1672.45...0.........0
VANQUIS........................2498.96...140.......39.9
Total unsecured debts..........23040.73..648.72....-


Monthly Budget Summary
Total monthly income.................... 2,198
Expenses (including HP & secured debts). 1,500.49
Available for debt repayments........... 697.51
Monthly UNsecured debt repayments....... 648.72
Amount left after debt repayments....... 48.79

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,040.73
Net Assets.............................. -22,040.73

On those figures you're looking at a debt management plan, to clear in 32 months.

An alternative would be bankruptcy. You have too much surplus for a DRO (either of you), but bankruptcy would only require a contribution from income for 36 months from non-benefit income.

An IVA would be over 60 months and continuing as you are just pays a ton of interest on the credit cards.

The fee-free providers are Payplan and Stepchange or there is the diy route if you prefer.

A first step is writing to the creditors with a holding letter, getting a new bank account with someone unconnected to your debts and cancelling your direct debits.