Long Term Debt.

Autumn2021

I am probably going to go to step change, but before I do I would just like to explore my position.

I have Long Term debt with 3 credit card accounts 

1. £20,000 since 2003. High Interest rate and paying approx. £150 per month in interest 
2. £6,000 since 2008 High interest and paying approx. £130 per month in interest
3. £6000 since 2008 interest 9 % so ok approx. £40 per month.

I am managing to pay basically the interest on these accounts each month, but I am not in a position to pay more, or ever likely pay them off.

I am self employed and rent. 

I think bankruptcy is the easiest option, from my understanding of debt, but I would prefer not to do that.

I have looked a little into how debts can be written off, 

And I'm wondering if debt no.1 at least would come under irresponsible lending. At the time that such a large credit balance was offered was earning about £16,000 per year. 

I've also done quick calculation and would have paid over the years on debt no. 1 approx. £43,000 in interest. 

Any (good) advice would be welcome. 

enthusiasticsaver

If I were you I would look at a DMP maybe through step change.  If you are managing to pay the interest but the rates are so high that no indent into the principal is being made then stopping the interest is a priority and a DMP should do that either through stepchange or self managed as you only have  three creditors. I am sceptical as to whether a case for irresponsible lending can be made but I guess you can try and see what they come back with.  I would write to all three creditors as a first step telling them you are not in a position to be able to make full repayments and asking them to freeze the interest while you  work out your next steps. You need to save up an emergency fund and default on the payments asap so they drop off your record in 6 years. Work out a realistic budget and how much you can afford to pay and at least that then should come off the principal debt if they all agree to freeze the interest. 

Autumn2021

Thanks. 
Most of the debt are from an ex partner, when he was out of work, and I've not actually missed one payment in all the years I've held the accounts. Just so frustrating when I think  of the amount of interest I must have paid over the years. 

Do you think that given the amount of interest I have paid, that some of the creditors might be open to a settlement figure. 

sammyjammy

Autumn2021 said:

Thanks. 
Most of the debt are from an ex partner, when he was out of work, and I've not actually missed one payment in all the years I've held the accounts. Just so frustrating when I think  of the amount of interest I must have paid over the years. 

Do you think that given the amount of interest I have paid, that some of the creditors might be open to a settlement figure. 

Thats very unlikely.

Are you saying that none of these debts have reduced since you took them out and its entirely due to only interest being paid?  Thats not how credit cards work.  Do you use them still?  If not when did you stop using them?

enthusiasticsaver

Autumn2021 said:

Thanks. 
Most of the debt are from an ex partner, when he was out of work, and I've not actually missed one payment in all the years I've held the accounts. Just so frustrating when I think  of the amount of interest I must have paid over the years. 

Do you think that given the amount of interest I have paid, that some of the creditors might be open to a settlement figure. 

You are more likely to be given a discount on settlement once the debts are sold on which is after you default. That will affect your credit record though.  

Autumn2021

enthusiasticsaver said:

Autumn2021 said:

Thanks. 
Most of the debt are from an ex partner, when he was out of work, and I've not actually missed one payment in all the years I've held the accounts. Just so frustrating when I think  of the amount of interest I must have paid over the years. 

Do you think that given the amount of interest I have paid, that some of the creditors might be open to a settlement figure. 

You are more likely to be given a discount on settlement once the debts are sold on which is after you default. That will affect your credit record though.  

Thank. I am just curious, but I will speak to step change and see what they advise.