Best way to reduce credit card debt

luckybert

I have about 24k spread over three credit cards and because of bad credit am a bit stuck and not getting anywhere in terms of clearing the debt. I'm just paying interest off each month.
My problem I know.

Do I just keep going or shall I get an IVA involved? If so which is the best one to use as I see so many ads on facebook with comments saying they are scams etc

Obviously I need the monthly payments to an IVA to be less than the interest I pay to the credit cards companies each month. I do not want to declare myself bankrupt and ideally don't want my credit score affected any more than it is.

[Deleted User]

Post an SoA as a starting point, to understand your budget.

Your credit score doesn't mean anything but be aware that paying anything less than contractual payments will have a significant negative impact on your credit worthiness.

sourcrates

As you may be aware, its your personal circumstances that usually dictate which debt solution maybe right for you, an SOA will tell us this, but as a basic requirement, an IVA is really only suitable if you have an asset to protect, such as a house, if that`s the case with you, then it might be an option.

If you have no assets, then you may want to look elsewhere, a DRO or perhaps debt management, because an IVA won`t be right for you.

luckybert

It was built up by some big spending and I took advantage of the 0% but then didn't have the cash to keep paying, then transferred some to another deal and I'm treading water at the moment. Sure I can keep paying but the idea of an iva which means the interest stops does appeal.

RAS

Do you understand that if you can afford the debt, after being granted a tight budget, you may have to pay the whole debt, plus the Insolvency Practitioner's fees of about £9K? 

The details are on the Insolvency Register and you may have trouble even getting a phone contract, let alone a rental?

Have you taken advice from any of the debt charities? If not, use the links in sourcrates' signature, as there are a number of IVA providers who mimic them and trap people. 

Grumpelstiltskin

Bert Have you read this thread?

Slight clamp-down on misleading IVA advertising — MoneySavingExpert Forum

These vultures are desperate to sign up mugs before their wings are clipped, don't fall for it.

sourcrates

You haven`t told us if you own property or not yet Bert ????

Brie

As others have suggested a SOA would be helpful - not just to us but to you as well.

Other than that - my go to suggestion is to write down how much you owe and when you have to make the minimal payments.  Put that in your back pocket and every time you want to use your card for anything or get cash out of the ATM pat your back pocket to remind yourself what you need to clear.  It helped me get my cards down to a reasonable amount so now I can just monitor on an excel spreadsheet.

MalMonroe

Why don't you contact one of the free debt help agencies? StepChange or National Debtline or Citizens Advice?

Their links are in sourcrates' signature, above.

Have a chat with someone who can help. You'll need to prepare a SOA for them anyway but once that's done, you can tell them everything and they can advise your best way forward. No obligations at all and no judgement. Which is something all people fear. 

I've been in big debt myself and I plucked up the courage to phone StepChange and never looked back. I've had a DRO, that's all over now and I'm really proud to say I'm debt free but being in debt and struggling to come out of it really taught me how to handle and manage money. And also to change the way I looked at credit - and how not to be coerced to spend it because it isn't my money. It took a very long time but then the penny finally dropped. What a relief!

I really wouldn't just plump for a solution without discussing things with a specialist adviser. Best thing I ever did. And the phone call was free, too, although I wouldn't have minded paying for it. I had a DRO but if you own your own home that won't be an option but you can still discuss your debt with someone who will be able to help and guide you.

Your credit score means absolutely nothing to anyone else but you. Nobody else can see it. Your credit history is the thing that will be scrutinised and from what you say, that damage has already been done. Whatever solution you decide upon, it's not going to be rosy for your credit report, so you might as well just bite the bullet and get on with making it better.

Plucking up the courage just speak to someone who has answers is really the best way forward, and I say that from personal experience. Good luck, though, with whatever you decide to do. 

luckybert

sourcrates said:

You haven`t told us if you own property or not yet Bert ????

I wasn't asked but yes I own my house.

sourcrates

sourcrates said:

an IVA is really only suitable if you have an asset to protect, such as a house, if that`s the case with you, then it might be an option.

luckybert said:

sourcrates said:

You haven`t told us if you own property or not yet Bert ????

I wasn't asked but yes I own my house.

Well actually I asked you in my opening post.

So an IVA is an option for you, it would depend how much disposable income you had, as to whether an IVA would be affordable or not.

As the other posters have suggested, a SOA would be helpful, or put your case to Stepchange, and see what they recommend.