Getting in front of the spiral

LeaseIssues

So, I’ve about 20k debt in credit cards thanks to trying  and failing to use 0% balance transfers

and the interest is starting to starting to bite and the payments are taking up a lot of my income 

I want to work and get in front of it all, I reach out to PayPlan and they said because I can make the minimums with money to spare then they can’t help me.

yet I feel the water rising, lots of conflicting and confusing information out there so looking for some direction.

I’ve been told an IVA is a bad idea as I’m not a homeowner 

because I can make my payments is a DMP out?

do things have to get to ugly before I can benefit from these types of assistance?

yours confusedly 

RAS

You know that the fees for an IVA are about £6-9k and if your income increases in the next 6 years you could end up paying back the £20k and the IVA fees on top? Added to which you are currently making the minimums.

What would really help is a Statement of Affairs detailing your income and monthly spends and a list of your debts with the value, current payment and interest rates, end date of the deal and what each reverts to.

It'll be easier to advise you with that information.

LeaseIssues

Thanks for replying. Ok that make sense but not 100% comfortable sharing all those details online 

I guess I was looking for some general avenues I can look into.

Singlespeeder

I get the caution ... but this is pretty anonymous ... you literally could be anyone. Don't put in stuff that could possibly ID you.... and I'm not sure if anyone it REALLY that interested, they just offer impartial advice.
But if you're still unwilling to share, advice may be somewhat general and non specific.

sourcrates

Forget IVA`s or insolvency of any kind, if you can meet your contractual repayments, then non of that will be of any help to you.
What Pay Plan failed to mention is that you can do anything you choose, if you want to make smaller payments to your creditors, over a longer period of time, and having them stop all interest, then go ahead and ask them.

But if you show them a budget where you can afford all your repayments with money to spare, then they will take the same attitude as Pay plan did.

Be aware that defaulting on your credit repayments will result in 6 years bad credit, do you really want to go down that road ?

Of course you don`t have to share your financial information with anyone, you can tell your creditors you are struggling, and make proposals for repayment that suit you, without ever sharing your budget details with anyone.

Just be aware of the consequences to your credit file if you choose to do so.

RAS

That's fine, but you do need to do it for yourself. Get out the last 6 month's statements and go through line by line to work out what you've been spending on. Latte habit, expensive holidays, a bit of on-line gambling, we really don't care, but you need to know what the issues are if you are to tackle them.

And to have a realistic budget. If you're partnered, you need to discuss funding for joint activities, as the expensive holidays etc will have to go, as will lots of meals out, nights out and discretionary spends.

With respect to the individual debt, you hit the most expensive first. Very features a lot here, but overdrafts are often a killer at 40%+. 

List the cards with the one with the highest reversion rate first. If this is a 2 year deal, you need to clear it before the deal ends.

But if you've got one that's a little lower and it's deal has already ended, bottom that first.

Got anything left from your spends that you can sell? Be careful about selling expensive items on-line.

And every three months, do a soft search to see if you can get some of the debt onto a cheaper card. Even if it's 6.9%, that a lot better than 29.9%.

LeaseIssues

Thank you for understanding! I’ve not being budgeting for travel and ally of it is spending beyond my means. Meals out and the like. 

When the paycheck ran out I would just credit card till the end of the month. (Sigh)

I will let all this settle then take a look and speak to my creditors. See what wiggle room there might be.

but thanks you for listening also, it’s been good just to get this out there.

I’ll be back for sure

RAS

If things really hit the fan, you need to know whether and how your creditors are going to mark your credit record before you decide what to do. 

People routinely get panicked by defaults, particularly as creditors are required by law to demand the full sum is paid before that default and warn of dire consequences that might, just might, happen. In practice, interest and fees stop being charged, you set up an affordable payment after the default and your credit record clears up in 6 years. If the debt's sold on, you may get an offer of a reduced settlement, Read the full and final settlement threads here.

To avoid the default, people often rush into making Arrangements to Pay. AP markers on your credit record aren't that much better than defaults, but they can damage your credit record for much longer, because they remain on your credit record for 6 years AFTER the debt is paid off. And there's no guarantee the fees and interest will be halted. 

If things become unaffordable and you decide to do a Debt Management Plan, stop paying, put the spare money into an emergency fund  and wait for the defaults before setting up the payments. You can self-manage, or get a debt charity to run a DMP. Do not pay a company to run it. 

LeaseIssues

And this is why I’m here!

no idea that Arrangement to pay  or affordable payments existed!! Thank you i will look up these term….

 and yes defaulting is very scary but that’s process I guess. Default then progress. 

thank you again