credit card debt

bumstead04

Hello guys, I am a long suffering citizen and have been since the bank bailout. I took out several credit cards 2 years ago because I had 2 daughters getting married. I do not regret the expenditure that brought memories. I am finding it difficult to service several cards with £7,000 of debt.  I think I saw a message somewhere that a card provider can freeze the card , allow an agreed time to pay debt without incurring further interests until the debt is paid. This can come in a way without a knock back on credit rating. Did I dream it?

RAS

There was a period of forbearance during COVID but that is no longer relevant. 

There are two basics, but both damage your credit record. 

You make an arrangement to pay less than the contracted amount. The creditor might not report on your credit record for a couple of months and might of might not freeze interest whilst your take debt advice (sometimes known as breathing space). Beyond those few months they record AP markers on your credit record that stay for 6 years after the debt is paid off. 

You stop paying altogether and hope the creditor records a default quickly, generally it takes longer now. Meantime you build up a reserve so that you don't need to use credit in the future. Defaults damage your credit record for 6 years whether you have paid off the debt or not. You probably want to start paying back something once the default is recorded. And you may be able to make discounted full and final settlements in a couple of years.

Depending on your income it may be possible to deal with that amount of debt by cutting back on expenditure, clearing some debt and then getting some balance transfers to give you room to manoeuvre. And also to look at income boosts, even if it's only a car boot or e-bay to clear £200 off the debt with the highest interest.

Brie

Just to add to what RAS has stated.  There's an official breathing space that can be applied for through the insolvency register.  But if you or a debt adviser were write to the CC companies and say you were finding it difficult and were seeking advice a lot of them will stop charging interest then as well - so it's a vey unofficial breathing space.  Frankly a lot of creditors have heard about breathing space but don't properly know what it is so it may be possible to do an unofficial one and then an official one. 

Would filling out a statement of account (SOA) and let people have a look at your overall finances be possible?  There may be some cost savings that could be made and make paying off the debts a bit easier.