Banksters are after me...

GenghisCorne

Hi all, brand new to this whole debt-busting lark, but I've been told you are the people to see.

I've been lurking around some of the boards this last week or so and its done a great deal to assuage some of my fears. I feel I'm in a pretty good place to tackle this beasty, but I need a bit of sage advice on the best way to go about it.

So enough preamble, the basic numbers are this:
£3000 on a Lloyds Platinum MasterCard at 19.57% effective interest
£3857 on a BarclayCard at 0.0% interest
Monthly income is roughly £1700 (I've just started a new job and I've not actually received full wage packet yet hence the vagueness)
outgoings are low as I live with my parents call it £700p.c.m so I've got a fair bit to play with.

I got into this mess through a mix of youthful naivete and long term unemployment, I've just come out of a 10 month period of unemployment and for the first say 6 months of that I used my remaining credit to maintain a lifestyle I couldn't afford. I have since learned the hard way to rein my spending in.

now as for the title of this thread I have already defaulted on the BarclayCard as they have quite  strict policy around repayments. fair enough I'm largely unconcerned about my credit rating as I see no large purchases on my horizon for some time. However I have recently received a rather threatening letter from Lloyds threatening another default if I can't make a repayment of £658.23 by the 10th of September (this isn't happening) or call them to set up a payment plan, they've threatened to take money out of my current account (also with Lloyds) to pay for my debt and I'd like to avoid them garnishing my wages if its all the same. I do have a Starling account that I could use as my main account to take the teeth out of that threat but I'm wondering if this is all necessary.

any thoughts are much appreciated.

Grumpelstiltskin

Firstly get rid of your Lloyds current account ASAP so they can't use that threat.

Floss

Get your salary paid into your Starling account - and as its probably too late for August pay, shift your money to that account ASAP and cancel any direct debits & standing orders on the Lloyd's account.

GenghisCorne

Wilco, I'll shunt my August wage and DD's over to Starling as soon as I get paid and swap my account with work

MattMattMattUK

If you have £1,000 a month to spare, why are you defaulting on your debts rather than engaging with the lenders?

Brie

Don't use the switch service for your DD's as that will, I believe, give Lloyds a trail to follow.  

Ring up Lloyds, acknowledge that you have a debt that needs paying, tell them when you can make a payment and how much it might be.  Assuming you are right about having about £1k available each month you could clear all of this by next spring.  But let's say it's a minimum of 24 months.  Lloyds will be over the moon if you can make a payment of say £200 a month consistently over the next year or so.  Ask them to waive interest for 3 months to allow you to get yourself settled into your new role and organise your budget.  

fyi - they will have access to your credit history so will know that you have the Barclaycard debt as well so whatever you tell them has to appear reasonable with that in mind.  They should be expecting you to pay them and not Bcard or vice versa.  

As for getting an order for Lloyds to be paid directly by your employer that is a loooooonnnng way off and can be easily avoided if you keep the line of communications open.

Might be a good idea to post a statement of account here when you get your pay coming in and then others can offer more advice on how to best manage things.  

Oh and congrats on the new job!!  Wishing you every success!!!

GenghisCorne

Brie said:

Don't use the switch service for your DD's as that will, I believe, give Lloyds a trail to follow.  

Ring up Lloyds, acknowledge that you have a debt that needs paying, tell them when you can make a payment and how much it might be.  Assuming you are right about having about £1k available each month you could clear all of this by next spring.  But let's say it's a minimum of 24 months.  Lloyds will be over the moon if you can make a payment of say £200 a month consistently over the next year or so.  Ask them to waive interest for 3 months to allow you to get yourself settled into your new role and organise your budget.  

fyi - they will have access to your credit history so will know that you have the Barclaycard debt as well so whatever you tell them has to appear reasonable with that in mind.  They should be expecting you to pay them and not Bcard or vice versa.  

As for getting an order for Lloyds to be paid directly by your employer that is a loooooonnnng way off and can be easily avoided if you keep the line of communications open.

Might be a good idea to post a statement of account here when you get your pay coming in and then others can offer more advice on how to best manage things.  

Oh and congrats on the new job!!  Wishing you every success!!!

Thanks for the prompt response, I shall give Lloyds a ring when I get a minute and see if I can't get this straightened out. £1000 a month is aspirational, it's just the total I've got that's not tied up directly with solid costs. I'll look at getting a proper SoA done and report back.

Thanks again for the well wishes 

GenghisCorne

MattMattMattUK said:

If you have £1,000 a month to spare, why are you defaulting on your debts rather than engaging with the lenders?

as stated here:
"I've just come out of a 10 month period of unemployment"

and here:
"(I've just started a new job and I've not actually received full wage packet yet hence the vagueness)"

I been getting £120 fortnightly from JSA since March and that doesn't really leave much for credit card minimums

Singlespeeder

Congratulations on the new job! The debt isn’t massive. It’s manageable and not worth getting big black marks on your record. I bet it feels overwhelming but we’ve pretty much all been there (many in significantly worse situations for sure) so keep your pecker up and budget. 

Defo agree re: moving everything to Starling as soon as August wages go in… 
it’s also understanding how you got where you are and changing spending habits accordingly. 

Get rid of the CC’s. 

Others will be along who’re better to advise than me !

sourcrates

The right of "set off" by a bank, is written into most banking agreements, but rarely gets used, I suspect you are very much in arrears with your payments for Lloyds to make such a threat, but if you have funds in any accounts managed by Lloyds banking group, that includes Bank of Scotland/Halifax/ Lloyds Bank, move them immediately to a "safe" bank not associated with your debt.

Now you've stopped paying these debts, all that`s going to happen is that the accounts will default, and be closed, the creditors will likely sell your accounts on to debt purchasing companies, but not before a period of collection activity, which will be in the form of letters and calls.

In your circumstances, just started a new job after a long period of unemployment, I would wait until these debts have been sold and the new companies contact you, this might be a period of a few weeks, or maybe a few months.

You can then make affordable arrangements online, without having to speak to anyone or have your finances scrutinised, creditors always go with debt collection, not court action at this early stage, your wages can only be garnished after losing in court and a CCJ being awarded, that won`t happen here.

Singlespeeder

I’ve never really understood this bit… is it better to pay what the OP can afford, say £300 to LLoyds and minimum plus a few £ to Bcard… until Lloyds is cleared…. Or not pay anything at all to either, until they default. Presumably once defaulted the interest stops. The debt doesn’t seem big enough to me to get the defaults against your name. The OP does mention Bcard has already defaulted… so maybe the damage is already done and letting Lloyds default too won’t exacerbate the damage further. 

I’d personally have tried clearing the Lloyds debt as quickly as possible. Is this maybe not the best way forward?