CC Debt - Drowning.

VictorOne

Hello everyone. 

I’m after a bit of help really. So, I’m in considerable debt at the moment with CC’s and are drowning, I just don’t know what to do or where to turn without calling the creditors themselves and ringing alarm bells. 

I have:
x2 Cap One OB £950
BarclayCard OB £800
Vanquis OB £1000
Aqua OB £450
Zopa OB £200

Outstanding debt £3400. 

I’m now constantly making late payments, catching up on over limit charges, late payment charges, I’m drowning. Covid has hit me hard and I’m literally broke now and depending on benefits. 

I need one monthly fixed payment, a balance transfer card for example whereby all this outstanding debt can just be housed under one monthly payment. 

What are people’s thoughts who have or might have been in a similar situation. I don’t really want to go on a StepChange plan as that will 100% wreck my credit file whereas as I am now, although not doing it much good, it will be shorter to fix than a StepChange agreement if I can get my head above water? 

Thank you. 

Ergates

Consolidation loans are very rarely a good solution - they might make life simpler in the short term but almost invariably either cost you more in the long run, or end up with you getting into more debt.
In theory a balance transfer to a new card with 0% for transfers would help cut interest - but if you're already struggling to meet the payments then you will likely find lenders unwilling to let you borrow more (which is what giving you a new card would be).

Worry less about your credit file - it will heal over time - and it sounds like you have more debt than you can handle right now, so probably shouldn't be considering borrowing more in the immediate future anyway. 

I'd strongly suggest getting yourself over to the Debt-Free Wannae board: https://forums.moneysavingexpert.com/categories/debt-free-wannabe  The folks there are very helpful with this sort of thing - many of them have been in similar situations (or worse)

Post a statement of affairs (basically a post that details your debts, and you monthly income and out-goings - include everything you can think of).  People can offer suggestions on how to cut down on spending so you can maximise clearing your debts.

This post is a very good starting point:  https://forums.moneysavingexpert.com/discussion/6027800/updated-debt-free-wannabe-sticky-links-to-important-topics-help-and-template-letters-are-here#latest

MEM62

If you already have a history of last / missed payments that your credit rating is already impacted.  As previously stated, consolidations rarely work.  The tend to be higher interest loans and, after all, in real terms a single payment does not offer any discernible benefit over making several smaller ones.  You need to contact your lenders now and see what support they can offer.  It is too late to worry about ringing alarm bells.  I would also suggest posting in the DFW boards as there will be a lot of help on offer over there.    

Brie

Hey there - credit cards can be such a wonderful thing and a terror as well.  Believe me I know!!!

Have you tried calling each of the card companies to ask for an interest holiday?  And to explain that covid has caused a problem for you and you're struggling.  Some may not care but even get a couple on your side would help ensure things don't get too much worse.  

If you try that be prepared to tell them how much you can afford to pay each month.  Even if it's £1 to show willing.  

And do go to the debt board and post a statement of accounts.  It can be an eye opener when it's all down in black and white and others can help you see if there's any corners to be cut.  Difficult if you are on benefits of course but there may be something.  

Best of luck with it.  

EssexHebridean

OK - this would probably be better over on the DFW board, it may be worth asking a board guide to move it for you. 

If you already have missed payment markers, then a DMP won't make things much worse, to be honest, and it does mean you'll get your head above water sooner. I assume that you have already looked for any possibilities of getting 0% balance transfer options to at least stop interest going on? 

Your suggestion about needing "one monthly fixed payment" could have been written by one of the horrible sharks who sell consolidation loans. Financial companies LOVE these loans because they know full well that in the overwhelming majority of cases,  it will leave to the individual ending up in more debt (and thus of course paying more interest) because the root of the original debt hasn't been tackled, and the "process" has not been completed. By the process I mean the actual paying off of the debt, over time - which teaches you a huge amount, not least how to avoid getting into the same position again. 

You need to put together your SOA (Statement of Affairs) as mentioned above and post that into the thread - we can then take a look and see if we can work out what the best route for you will be, and also see if we can find any savings from your budget that you may have missed. Your actual level of debt isn't huge, which is a help, but of course that does depend on your other financial commitments. 

StepChange_Aidan

VictorOne said:

Hello everyone. 

I’m after a bit of help really. So, I’m in considerable debt at the moment with CC’s and are drowning, I just don’t know what to do or where to turn without calling the creditors themselves and ringing alarm bells. 

I have:
x2 Cap One OB £950
BarclayCard OB £800
Vanquis OB £1000
Aqua OB £450
Zopa OB £200

Outstanding debt £3400. 

I’m now constantly making late payments, catching up on over limit charges, late payment charges, I’m drowning. Covid has hit me hard and I’m literally broke now and depending on benefits. 

I need one monthly fixed payment, a balance transfer card for example whereby all this outstanding debt can just be housed under one monthly payment. 

What are people’s thoughts who have or might have been in a similar situation. I don’t really want to go on a StepChange plan as that will 100% wreck my credit file whereas as I am now, although not doing it much good, it will be shorter to fix than a StepChange agreement if I can get my head above water? 

Thank you. 

Hi Victor,

As noted above, debt consolidation is rarely a good idea as you’re likely to pay back more in the long term. In your situation we might suggest a Debt Management Plan (DMP), where you would make one affordable monthly payment to us, which is then shared fairly among your creditors.

The downside is that when you’re making reduced payments through a DMP, these will be reflected on your credit report. However, if you’re making late payments, this will already be having an impact.

Even if you don’t want to set up a DMP, I’d recommend getting in touch with StepChange, as we can help you create a budget and review other solutions that are available to you. We can give debt advice, and you’re not under any obligation to go ahead with a plan through us.

If you’d like to get help from us, you could use our online tool or give us a call to speak with an advisor.

I hope this helps.

Aidan

ManyWays

Debt consolidation is only a good idea if it is at a really cheap rate. As you have missed payments, that isnt going to happen.
I think you should look again at a Stepchange DMP.  It isnt good for your credit record but when you cant afford the minimum payments there is no option that will magically resolve that and not harm your credit record. A DMP is no worse than you making payments arrangements individually with all your lenders and it is a lot simpler for you - just a single monthly payment and Stepchange do all the creditor communication.