Can’t Pay Credit Card Min

Hi

Done the unthinkable 2nd time in my life! I currently have zero defaults, CCJ’s and 4 credit cards to my name with a total balance of about £30k! Lost my job recently and struggling to pay the minimum anymore on all the 4 cards as it averages about £1k/month!!! As at today, I have not missed any payment but likely this January!!! :(

I am going to apply finally after not working for 4 months for universal credit this week!

I’m over 50, live in a Council house with rent up to date & not looking at getting a mortgage or any serious credit aside from things like getting a phone or similar small items or might want to lease a car a few years down the road etc

1. What will be the best advise here, call the credit card companies and defer payments?
2. What will be the effect on my credit file or ability to get credit anymore?

Thanks
Olu-60

Replies

  • Give them a call, to discuss your options.

    Arrangements, late payments and defaults have a very negative impact on your files, but if you can't make the payments, then you have no choice.
  • Carrot007Carrot007 Forumite
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    Arrangements, late payments and defaults have a very negative impact on your files, but if you can't make the payments, then you have no choice.


    As such it is worth pointing out if you are going in that direction it is better to get there sooner. This could well mean stopping paying for months so they default you.
  • Thanks Carrot007 for your reply; what does “so they default you” mean...?
  • edited 24 January 2020 at 6:11PM
    Willing2LearnWilling2Learn Forumite
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    edited 24 January 2020 at 6:11PM
    Either a 'default' or 'payment arrangement' both mean that your banking relationship with your creditor has broken down.

    A 'default' means that the relationship has permanently ended, whilst a 'payment arrangement' means that although your original agreement has broken down, you have arrived at an alternate resolution that satisfies both creditor and debtor.

    Both a 'default' and a 'payment arrangement' will severely damage your credit file(s). A 'default' has the advantage of freezing interest and fees. An additional advantage of a 'default' is that the negative data will be removed from your credit file(s) much sooner.

    :)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • sourcratessourcrates Forumite
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    Olu-60 wrote: »
    I’m over 50, live in a Council house with rent up to date & not looking at getting a mortgage or any serious credit aside from things like getting a phone or similar small items or might want to lease a car a few years down the road etc

    If your only income is benefits, then 30k of debt will take you forever to repay, is a new job a possibility ?

    If not, and the situation is unlikely to change, you may want to consider bankruptcy, as in your current circumstances, you seem an ideal candidate.

    Best to get advice from National Debtline and/or stepchange first, but as you have no assets, it may be an option.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • Voyager2002Voyager2002 Forumite
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    One small point: if you are on state benefits (and can prove it) your creditors are likely to be more lenient with you than otherwise.

    Anyway, I do NOT suggest that you simply stop paying and allow them to "default" you. They will naturally make increasingly vigorous attempts to contact you, by telephone and if necessary by making personal visits. There will be hefty fees for all of these, and if you find a decent job within the next six years you are likely to end up paying the bulk of these fees.
  • Voyager2002Voyager2002 Forumite
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    sourcrates wrote: »
    If not, and the situation is unlikely to change, you may want to consider bankruptcy, as in your current circumstances, you seem an ideal candidate.

    Best to get advice from National Debtline and/or stepchange first, but as you have no assets, it may be an option.


    There are fees for bankruptcy, and it is not clear to me what benefits it would offer. As you say, best to take advice.
  • boo_starboo_star Forumite
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    There are fees for bankruptcy, and it is not clear to me what benefits it would offer. As you say, best to take advice.

    OP already lives in a council house and is not yet claiming UC.

    It doesn't sound like a person who is going to get a job paying them 50k+ a year.
  • sourcratessourcrates Forumite
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    There are fees for bankruptcy, and it is not clear to me what benefits it would offer. As you say, best to take advice.

    Well as the OP`s income will be UC, at best he can only offer token payments to creditors, he may be lucky in that they accept his situation, and don`t keep bombarding him with demands for payment, as this can freak out most people, but this is not guaranteed.

    Bankruptcy would draw a line under everything and allow him a fresh start, free from worry about debt.

    Yes there are fee`s, currently £680 in England and Wales, and that may be a problem, but its just one option available to him.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • yksiyksi Forumite
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    Do that UC application right now - do it today.

    Apply for an advance payment as soon as you can. Check daily and do it online. If it's approved you'll have it in your hands within 3 days of applying.

    Then do not spend that advance on credit card debt - hang onto it until you've sought advice. It's an interest free loan, but it will mean you have enough money to sort the things that are essential, like eating, heating, rent. This part's important, because your first universal credit will now be in MARCH due to the built-in five week wait, so you need to make sure that you're ok for February.
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