Here Goes...Starting Up on a Journey

TheAble

It does look an arduous task to pay back 53k at a 30% interest rate. It could theoretically be done with a lot of discipline and assuming no unfavourable changes to your circumstances in the meantime but even then would take you at least 2.5 years (at your current repayment rate) and cost you over £20k in interest. People I think are reasonably questioning if this is feasible or the right approach.

Superhoopza

It is a tough task yes but as I have asked, is this still not better than over 10 defaults on the account? Also I would be surprised to not start getting some balance transfer offers within 12 months to cut the impact.

Superhoopza

Is anyone able to support on this question please?

If not, one or two of them on a payment plan, which if I understand correctly, as long as I make the monthly contractual payments, means I am not in breach and won't have an arrangement to pay market against them but the interest rate will be capped, like a loan?

If it's a case by case basis then fine, just wondered people's opinions on it.

MFWannabe

Superhoop91 said:

Is anyone able to support on this question please?

If not, one or two of them on a payment plan, which if I understand correctly, as long as I make the monthly contractual payments, means I am not in breach and won't have an arrangement to pay market against them but the interest rate will be capped, like a loan?

If it's a case by case basis then fine, just wondered people's opinions on it.

Essexhebridean answered this question this morning 

I think you need to redo your soa based on what your actual outgoings will be now following conversation with girlfriend then their might be some light at the end of the tunnel which we can see 

Ref using the credit card and paying it off each month, people are saying this is a bad idea because most of us have been in this position and not paid it off and the debt increases. You need to come up with a budget and stick to it and throw absolutely everything at the debts.  Is your girlfriend financially savvy? Maybe you could sit down together and go through everything then she will know how serious you are about paying it off 

backinbusiness

Superhoop91 said:

Is anyone able to support on this question please?

If not, one or two of them on a payment plan, which if I understand correctly, as long as I make the monthly contractual payments, means I am not in breach and won't have an arrangement to pay market against them but the interest rate will be capped, like a loan?

If it's a case by case basis then fine, just wondered people's opinions on it.

Hi Superhoop. A reduced amount payment plan IS in breach of contractual payments and will adversely affect your credit file accordingly - remaining on 6 years AFTER the debt is paid back. I don't think you've quite got the hang of this yet. Anything other than the contractual monthly amount (whether negotiated with the creditor or not) WILL be in breach and will be marked as default.  BiB 

enthusiasticsaver

Whether you do a payment plan or stop making payments and do a DMP your credit file will be adversely affected.  If you can no longer get 0% deals it is already affected.  Putting monthly spends on  credit cards and trying to muddle through still paying 30% interest on £53k of debt when you have a £800 monthly deficit will only make matters worse.  

I think others have said it but honestly you have to stop spending on credit altogether.  You have to budget and live within the budget and if that budget does not stretch to paying at least minimums or preferably over minimums on the cards you will get nowhere in paying it off and pay an awful lot of interest along the way. I can see no other option than a DMP.  

EssexHebridean

Superhoop91 said:

EssexHebridean said:

I don't think you are being naive, as such, but I do think you may not quite have grasped that this is a process, and it needs to be followed in a particular way really. Right now, that shouldn't include using credit at all - whether you are paying interest on it or not. If you were using a CC for a purchase that you already had the money in the bank for, then just clearing it immediately - using the card for the S75 protection for example, then that would be slightly different, although probably still not advisable. Right now, you need a monthly budget that works, enables you to meet all your commitments and save an emergency fund. 

I'm also not sure why you'd think paying an extra £15-£20k would be a sensible thing to do, allowing that you seem to have accepted that you are going to get defaults anyway - why do you think that some of the debts need to not be allowed to default? What happens if (when, probably) your defaulting creditors realise that they're apparently being mugged off as you are still paying others in full, for example? 

I don't plan if I can to have any defaults. The spend on the credit card id pay in full would be my actual monthly spending i.e. groceries. Money that would be spent anyway. Doesn't that make sense to pay via that method and not pay interest than to put it on my overdraft/other CCs than paying interest on them?

No - it makes sense to make your budget balance - that way you won’t be  needing to put anything on a credit card, and certainly not an overdraft. 

If you had a cashback credit card, then there would certainly be an argument for spending current month’s outgoings like groceries etc on that card while the money that has already come in for them - your salary - sits in a bank account earning some interest. Then you clear the full balance on the card before the due date. 

Allowing that your original SOA had quite a large shortfall, I think a new one with your actual planned expenditure now would be a very sensible idea. 

You’re talking about wanting to buy a house in the future -  that extra £15k you’re talking about paying off on the debts, wouldn’t it make a nice contribution to a deposit?

Superhoopza

Thank you to everyone that responded, unfortunately I still feel some key questions/points are being missed. So I'll try and ask them again:

1) Is it going to be really difficult in the next six years to get a mortgage if I default on my 10+ creditors instead of paying off balances slowly even if I incur thousands of pounds of interest charges in that time?

2) people ask me to post a second SOR. Let me simplify it:
Income: 3100
Essential spend/emergency fund etc: 900
Interest Payments: 1000

Which means I'm clearing my debt by about 1100 a month.

3) I get people saying I need to build an emergency fund but IF I don't default, isn't using most excess money to pay off interest a far better use of it, whilst still having access to credit/overdraft for emergencies?

4) @backinbusiness I set if I set up a repayment plan where the payments allow me to make the contractual payments with the interest frozen, would that still be a breach? 

Yes thanks to everyone who have said I haven't got the hang of it or am not understanding, if I was, I wouldn't still answer questions. Being condescending isn't useful. That's why I'm asking for advice and asking questions.

Martico

Superhoop91 said:

Thank you to everyone that responded, unfortunately I still feel some key questions/points are being missed. So I'll try and ask them again:

1) Is it going to be really difficult in the next six years to get a mortgage if I default on my 10+ creditors instead of paying off balances slowly even if I incur thousands of pounds of interest charges in that time?

2) people ask me to post a second SOR. Let me simplify it:
Income: 3100
Essential spend/emergency fund etc: 900
Interest Payments: 1000

Which means I'm clearing my debt by about 1100 a month.

If you were able to change the terms like that, you'd be clearing the debt by just £100 per month (given that each month the interest increases it by 1000). Which is bad enough. But you can't change the terms like that. 
Reality is:
Income 3100
Essential spend 900
Minimum contracted non priority debt payments 2500
Shortfall 300

Superhoopza

Martico said:

Superhoop91 said:

Thank you to everyone that responded, unfortunately I still feel some key questions/points are being missed. So I'll try and ask them again:

1) Is it going to be really difficult in the next six years to get a mortgage if I default on my 10+ creditors instead of paying off balances slowly even if I incur thousands of pounds of interest charges in that time?

2) people ask me to post a second SOR. Let me simplify it:
Income: 3100
Essential spend/emergency fund etc: 900
Interest Payments: 1000

Which means I'm clearing my debt by about 1100 a month.

If you were able to change the terms like that, you'd be clearing the debt by just £100 per month (given that each month the interest increases it by 1000). Which is bad enough. But you can't change the terms like that. 
Reality is:
Income 3100
Essential spend 900
Minimum contracted non priority debt payments 2500
Shortfall 300

Not all the payments come out at the same time of the month. So I can make all payments and reduce total balances.