Credit card debts drowning

kjo13

Hi I hope I'm in the right place...I am currently absolutely drowning and confused about how to claw myself out of the mess I've found myself in. I always had two credit cards with under 800 on each (not great I know) bit due to change in circumstances (legal care of a family members child) which meant childcare fees so I could work I have ended up moving to 0% cards then stupidly spending on them and now have about 6 cards all owing 1000-1500. I am struggling to make the minimum payments and just don't know what to do. Do I default on them all and take the hit and hope no one knocks my door ie bailiffs? I had arrears in priority debts but am sorting that slowly with payment plan but the credit card debts are keeping me awake at night. I work full time 38k and rent rather than own my house but I just no longer know how to manage the credit cards. I cannot use some of the options ie bankruptcy and DPO because I have a car which I need for work and its worth more than 2k. Any help gratefully received!

MattMattMattUK

https://www.lemonfool.co.uk/financecalculators/soa.php
Complete a full SOA, remember to use the average of annual costs, not just a one month snapshot, then people will be able to help. 

EssexHebridean

If you are struggling with your priority bills then you need to stop paying to unsecured debts. 

I'd agree with Matt though - a full SOA (Statement of Affairs) is a great starting point as it will really set out for you where your money is committed. 

Try not to fret too much - it's all fixable, honestly. It's all about learning and then working through the process. 

RainbowFriend

Citizens Advice Bureau, and Christians Against Poverty, both work with people from any background struggling with debt. Not only to offer practical advice and support to enable you to 'resurface again' from your difficulties, but also to support YOU while you're doing so, which is equally if not more important.
You've already taken the first most important step in reaching out for advice help & support, all the best as you continue 👍

elkiedee

Are you still a kinship carer for the child? How old? Are you still paying a lot for childcare?

kjo13

Yes I am, child is nearly 3 and I pay full amount for childcare as cannot claim any support due to earnings 

sourcrates

When you think your drowning, its time to reach for the lifebelt, you should only be paying your priority debts, not your non priority ones, so any unnecessary credit debts can be side lined for now, stop paying them.

I can almost guarantee nothing will happen when you stop paying, get your priority debts in order first, if any creditors write to you or phone you up, explain you have priority debts you need to catch up with, and you will be in contact in 3 months time with an update for them.

Once you are in a better place, work out a budget you can stick too, and give stepchange a call or look online, and enquire about a debt management plan.

Keep at the forefront of your mind this thought, affordability is the key to everything these days, no creditor will let you pay debts that are unaffordable, its FCA guidance, and they have to abide by it.

kjo13

Thanks Sourcrates! Nerve wracking cancelling direct debits for cards due to the impact of defaults. Should I completely stop paying for say 3 months or pay almost a nominal figure just so they can see I'm still paying? I approached a couple to explain my situation and ask for interest to be frozen, 2 new day cards put me on an arrangement with interest frozen, one froze interest for 6 months and barclaycard said they couldn't offer anything as my income expenditure showed I couldn't afford it so as fca regulated they couldn't offer me any repayment plan and advised I default. 

Floss

Stop paying them all, and save what you can into an emergency fund.

EssexHebridean

If you continue to pay anything at all, you will almost certainly find that they will put Arrangement to Pay markers on your credit file. These are markers that will stay in place for 6 years from the point that the debt is cleared, where default markers simply drop off after 6 years from the date of the default. This is why we aim for the defaults.

As an example - let's say you have a debt which gets an AP marker now - it then takes you 4 years to clear the debt to zero. The AP marker will drop off your file in 2034. 
You have another debt that gets a default marker now - as before it takes you 4 years to clear the debt to zero. The default will drop off your file in 2030.