Is this the right thing to do? RE: Huge Credit Card Debt

SunshineSmile

Hi everyone,

My husband and I have accrued a huge debt over the last 6 years. A bereavement years ago, and me being unable to work for a year because of it, contributed to this as well as losing a couple of huge work contracts for the both of us (we are both self-employed) which certainly didn't help.

We owe thousands on our credit cards - about £45000. I am embarrassed writing it as I don't know how the hell we got in this situation. Well I do, but bad error on our part and unfortunate circumstances have led to this.

So the other day when I felt like killing myself (figure of speech) I had a think and realised there is a solution for every problem no matter how bad. Now up until this point we have been able to pay the minimum on our 4 credit cards (sometimes even more) but the interest has been crippling us - nothing is being paid of, and now it's reached the stage where we are going to get into serious arrears and trouble if we don't take action.

Let me add at this point an IVA or bankruptcy isn't an option - it really isn't. We don't want to reach that stage. We can't let it. We just want some time without interest to get ourselves back on level.

So I phoned up Lloyds who we owe £15000 too and explained that we want to pay back our loan in full but the interest is ruining us. We asked if they could help us out by freezing the interest for a few months so that we could get back on track. They replied they would send an income and expenditure form to us, work out a minimum payment for us to pay and would freeze the interest for 3 months. After that time they would look into renewing it for a further 3 months.

Now I know our credit is screwed but the way I see it is if we can freeze the interest on all our cards for a short while and pay a minimum repayment then we would be able to pay off the one with the highest interest without getting deeper and deeper into debt with everything else. We would also be more productive and make more money over the next 6 months without constantly worrying we're about to have a heart attack from it all. We have our mortgage, phone and debit cards - we don't need credit for anything else. Once the loans are all paid - how difficult can it be to rebuild your credit?

We don't want credit cards, all we would be concerned about is a getting a mortgage if we want to sell-up. If our credit rating was severely damaged, yet we owed no debt and had a £100,000 as a deposit to put down - would it still be that difficult to get a mortgage?

I think it is better to nip this debt in the bud instead of trying to protect our credit-rating and plunging even further head-first down this financial spiral of doom.

As aforementioned I phoned up Lloyds but I want to put this in writing to all four credit card issuers. Is there a template for this? I want to cut our cards up, 'close' our accounts and ask them to temporarily stop our interest. Is this okay? Should I say or do anything else?

Is there any other advice you can give me?

I actually feel in control for the first time in ages. It's a really crap situation, but I refuse to let this ruin me and my husband. I want to this sort this out. A credit score can always be fixed can't it? But letting things reach the stage of losing your home are irreversible.

And the card issuers have a social responsibility to try and help us right?

So if there is anything else I should write, do or say, or if anyone has done this themselves, please let me know your thoughts.

Thank you for taking the time to read this.

missile

SunshineSmile wrote: »

And the card issuers have a social responsibility to try and help us right?

I lost sympathy here. Who do you think pays for this "help"?





The poor mugs who pay their CC bills on time.:rolleyes:

SunshineSmile

Well if that's your view, then we have definitely earned our 'help' over the years considering we have paid thousands in interest and we've never been late with payments, so in effect we've paid for our own help.


I didn't want any sympathy, maybe some empathy, but mostly some friendly advice or some feedback.

CLAPTON

Really without knowing your income, your essential spending and the full details of your debts its impossible to say whats best.
Its possible that the CC companies may freeze your interest for a few months but without seeing the details of your financial situation its impossible to know whether this would be sufficient to help you enough.

I would suggest that you will get a far more sympathetic response on the debt freewanabe board than this one.
Read the 'sticky thread' on the other board and post up a full SOA and I'm sure you will get some helpful comments.

inmypocketnottheirs

To the OP. The best thing you can do is get over to the debt free wannabe board and post a SOA (statement of affairs). Those guys and gals have an amazing ability to conjure up funds from nowhere to help shift expensive debt.

belfastgirl23

Agree. The DFW have loads of experience with this. You should start here http://forums.moneysavingexpert.com/showthread.html?t=107280
and then start a new thread asking for advice.

They are really helpful and non judgmental.

Good luck

SunshineSmile

Thanks guys, I'll do that now. I didn't realise I was in the wrong board.

If a moderator wants to delete this thread, please do as I am going to start another one in the correct place.

inmypocketnottheirs

SunshineSmile wrote: »

Thanks guys, I'll do that now. I didn't realise I was in the wrong board.

If a moderator wants to delete this thread, please do as I am going to start another one in the correct place.

It's not that you are in the wrong place, or have asked the wrong question. You just may get a better response on the DFW thread!

Good luck!