Advice needed and are defaults really that worth stressing ?

enthusiasticsaver

sparks_2023 said:

Thanks everyone.

It seems I must divert everything to pay the council tax immediately, even if it means Cashasap, Bamboo, Fund Ourselves, and CashFloat default me.

I'm not worried at all about the (£2850 over 5 cards ) credit cards or the £1950 overdraft - those are problems for the summer. I'll look at the SOA in the New Year once the Council Tax is paid off.

I appreciate the very valuable help - I'm fully focused now on the council tax.

If you are not going to go down DMP route and ask for interest to be frozen I would worry about the overdraft. Most charge 40% interest and can be recalled at any point. I agree with prioritising the council tax. 

Ask the rest to freeze interest. 

sparks_2023

More welcome advise.

I never really thought of the overdraft as an issue - in my mind just a rolling negative balance that is part of life, but I've just worked out the fees and it is around 40%. It's more than my worst credit card, which has stunned me.

So, I'll look at paying it off ( £1950) it before the credit cards ( Aqua £1200, Vanquis £250, Zopa £200, Capital One £700, Smile £500).

I started the SOA but somehow managed to click on something that lost all the data - so I'll revisit it after the New Year break. My outgoings were a few hundred below my incommings but I had set my monthly payment for the late ( soon to be defaulted ) loans which had gone beyond their original terms to the full outstanding balances - which is obviously wrong. They don't get paid all in one hit, past caring about them now tbh - they'll have to be paid in chunks.

fatbelly

Overdrafts are usually higher effective interest than credit cards. If you can get rid of that debt before going into a dmp then it's worth doing. There are various lines of attack, listed in this article

https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

EssexHebridean

I think that's one of the issues with overdrafts - people DO just consider them to be "normal" now - it's something we need to punch through and re-educate on IMO. I know we certainly had that view before we found this place - "Oh well, everyone's in the red at the end of the month aren't they!" is a phrase that gets bandied around so much it's hardly surprising it's normalised. 

It's not a good way of living - and now you have an opportunity to change things for the better while you still have time, and working income. 

RAS

The other small issue is that people "traditionally" had free overdrafts at some point, that they then extended but at a low interest rate (mission creep).

Whilst they researched credit cards to get the best deal and then found the deal reverting to a much higher rate. 

So until the change in the rules overdraft=good 6% and credit card, yikes 22%=bad.

A lot of people haven't really understood the change in the rules or the rates.

enthusiasticsaver

It is certainly the case that many consider overdrafts as normal and I agree we should be tackling that mentality that everyone goes overdrawn.  

ManyWays

sparks_2023 said:

It is clear now that I've been floundering for a way not to get the 4 loans to default on my credit report. But my credit report is abysmal anyway as I'm unable to get any finance.

If your credit record is abysmal are a few more defaults going to make much difference? A spotless credit record is an asset but it doesnt sound as though yours is worth struggling or paying any extra interest to protect. 

sparks_2023

Been trying to sort out payment with the creditors. So far :

The 'good' :
Likely Loans ( £700 outstanding ) easy arrangement made on line.
CashFloat ( £270 ) arrangement made.
CreditSpring ( £160), shifted payments back a month.

The unknown ( yet ) :
Council Tax ( £792, they'll get £132 next week though ).
Bamboo ( £563 )
Payment Assist ( motor repairs ) (£490)

The bad :
NatWest £1950 overdraft ongoing.
Credit Cards £2850 over 5 cards.

The ugly :
Fund Ourselves (£96). Default registered.
CashAsap ( £100 ). Need payment NOW, otherwise they'll default me.
Mr Lender ( £80 ). Already sold debt to Lantern. So presumably already defaulted. I hope they got peanuts for the £80. Lol.

Too many plates were spinning

I obviously need to call the council after the bank holiday.

NeverendingDMP

Just popped on to say good luck. Yout last post clearly lists who you owe money to and sometimes I think half the battle is breaking it all down and having some clarity. Especially when you have money all over the place.could you open a basic bank account with someone else and leave the overdraft as a separate debt to send money too.
Council tax is first on the list I know but having an account overdrawn plays havoc with your sums when doing day to day finances!

NeverendingDMP

And the plus side of your debt being sold to lantern is that they might agree a settlement figure with you for an easy win.