Here Goes...Starting Up on a Journey

EssexHebridean

Superhoop91 said:

backinbusiness said:

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? 

Hi Superhoop,

Any variation of the contracted terms (those you signed when you applied for the credit cards) WILL breach your contractual agreement and be reflected as such on your credit file - whether negotiated or not. 

Defaults, (1 or 10), will affect your ability to obtain a mortgage although there are specialist brokers.

If it were me, I'd allow everything to default, pay nothing meantime, build an emergency fund to avoid the need for credit and enter a DMP. You may not currently qualify for a decent mortgage anyway due to affordability concerns. 

I'd put the mortgage to the back of your mind right now and get on top of your current financial situation. It makes no sense to continue struggling like this when a DMP could alleviate things AND save you a whole whack of interest.

Hope that helps.  BiB x 

thanks BIB appreciate the responses. So in reality 1 or 10 defaults makes little impact, any number is bad. 

Not really - in a position where someone has what is in reality unsustainable debts, defaults are good. They serve to stop the interest, and also create a position where the reliance on credit is forced to halt as well, so laying the groundwork for a better financial future. It's the reason why we usually adopt the stance that where someone is entering into a DMP, they should stop paying to allow debts to default and also to allow them to create an emergency and fighting fund - with the FF bit being to allow for Full & Final settlement to be negotiated along the line. 

Superhoopza

EssexHebridean said:

Superhoop91 said:

backinbusiness said:

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? 

Hi Superhoop,

Any variation of the contracted terms (those you signed when you applied for the credit cards) WILL breach your contractual agreement and be reflected as such on your credit file - whether negotiated or not. 

Defaults, (1 or 10), will affect your ability to obtain a mortgage although there are specialist brokers.

If it were me, I'd allow everything to default, pay nothing meantime, build an emergency fund to avoid the need for credit and enter a DMP. You may not currently qualify for a decent mortgage anyway due to affordability concerns. 

I'd put the mortgage to the back of your mind right now and get on top of your current financial situation. It makes no sense to continue struggling like this when a DMP could alleviate things AND save you a whole whack of interest.

Hope that helps.  BiB x 

thanks BIB appreciate the responses. So in reality 1 or 10 defaults makes little impact, any number is bad. 

Not really - in a position where someone has what is in reality unsustainable debts, defaults are good. They serve to stop the interest, and also create a position where the reliance on credit is forced to halt as well, so laying the groundwork for a better financial future. It's the reason why we usually adopt the stance that where someone is entering into a DMP, they should stop paying to allow debts to default and also to allow them to create an emergency and fighting fund - with the FF bit being to allow for Full & Final settlement to be negotiated along the line. 

I meant bad for the credit file

backinbusiness

thanks BIB appreciate the responses. So in reality 1 or 10 defaults makes little impact, any number is bad. 

Hi Superhoop.  From the point of view at which you're coming at this situation, yes, any number of defaults are not good.  However, what @EssexHebridean says is also true, in that they'll freeze interest and charges and scupper your ability to get further credit (or may even impact on the limits you already have).  If you decide to go for the DMP, then defaults are good.  It is of course your choice, however lots of us on this board have been there, done that - a DMP looks to me like the most sensible, least costly alternative.  BiB.

Superhoopza

DMP definitely the least costly alternative.

Paying off the debts with high interest seems far better for a mortgage from what I'm reading. Think it's making my mind up for me.

Andyjflet

Superhoop91 said:

Andyjflet said:

I am going to bookmark this thread, I'm finding it fascinating that we have the idea of borrowing our way out of debt. Take a look at a snowball repayment calculator for the debt and see how the rates will look 18 months from now once your credit stream dries up.

I'm talking from someone who has been there and done it, I snowballed my way out of debt by paying one card off at a time and it eventually took me 4 years, some weeks I didnt eat for two days to achieve this, take a look at my signature, at one point in 2019 I had more debt than you. 

Explain to me please how I am taking on more expensive credit? You've obviously seen me say that somewhere?

I haven't said you are taking on more expensive credit? Where have I said that sorry? 

Floss

Superhoop91 said:

DMP definitely the least costly alternative.

Paying off the debts with high interest seems far better for a mortgage from what I'm reading. Think it's making my mind up for me.

How will you save a deposit, and meet the affordability requirements of a mortgage? The application process will look at your existing debts, available credit and income.

Superhoopza

Andyjflet said:

Superhoop91 said:

Andyjflet said:

I am going to bookmark this thread, I'm finding it fascinating that we have the idea of borrowing our way out of debt. Take a look at a snowball repayment calculator for the debt and see how the rates will look 18 months from now once your credit stream dries up.

I'm talking from someone who has been there and done it, I snowballed my way out of debt by paying one card off at a time and it eventually took me 4 years, some weeks I didnt eat for two days to achieve this, take a look at my signature, at one point in 2019 I had more debt than you. 

Explain to me please how I am taking on more expensive credit? You've obviously seen me say that somewhere?

I haven't said you are taking on more expensive credit? Where have I said that sorry? 

What are you trying to say then?

Superhoopza

Floss said:

Superhoop91 said:

DMP definitely the least costly alternative.

Paying off the debts with high interest seems far better for a mortgage from what I'm reading. Think it's making my mind up for me.

How will you save a deposit, and meet the affordability requirements of a mortgage? The application process will look at your existing debts, available credit and income.

If I pay them off, I'll have no existing debt, high available credit and decent income but nothing saved for a deposit.

versus

Settled defaults on file for 6 years, none/little available credit as creditors withdraw it after I default and £20k odd for a deposit.

Superhoopza

Andyjflet said:

I am going to bookmark this thread, I'm finding it fascinating that we have the idea of borrowing our way out of debt. Take a look at a snowball repayment calculator for the debt and see how the rates will look 18 months from now once your credit stream dries up.

I'm talking from someone who has been there and done it, I snowballed my way out of debt by paying one card off at a time and it eventually took me 4 years, some weeks I didnt eat for two days to achieve this, take a look at my signature, at one point in 2019 I had more debt than you. 

Why would the rates look higher in 18 months if I am reducing my balances?

Andyjflet

Superhoop91 said:

Andyjflet said:

I am going to bookmark this thread, I'm finding it fascinating that we have the idea of borrowing our way out of debt. Take a look at a snowball repayment calculator for the debt and see how the rates will look 18 months from now once your credit stream dries up.

I'm talking from someone who has been there and done it, I snowballed my way out of debt by paying one card off at a time and it eventually took me 4 years, some weeks I didnt eat for two days to achieve this, take a look at my signature, at one point in 2019 I had more debt than you. 

Why would the rates look higher in 18 months if I am reducing my balances?

Substitute the word "rates" for balances.