In quite a bit of debt, advice needed!

DisabledDan

Jvoke said:

stu12345_2 said:

it be great if we could stop paying anything for say 2  yrs and then ask creditors for a 50% discount, whilst we had saved up in last 2 years

that's isn't going to happen, they will default you in 3 months, 6 months, min and then expect payment arrangements for a few years, it be hard to save up large amounts of money at same time as repaying them a reasonable  monthly amount to be able to take advantage of any offers 3 or 4 years down the line.

you can't simplify let them default, then offer them £1 a month whilst you put £800 in a biscuit tin per  month or bank, then write to them couple of yrs or 3 down the line, I have £20000, can i get £50% off.

to  pay £1 a month for 6 months or even a year, they will won't proof you are pennyless.eg no job etc on benefits or only work a few hours a week etc

I understand your point and not expecting it to go on for years.
However judging by a lot of peoples experience on here, some defaults don't even kick in even after a year.

And what is stopping me doing like you said putting away a decent amount each month? They are unsecured loans at the end of the day right? They can't force the money out of me unless with a CCJ which wouldn't happen for a long time. If I kept an eye on it and it looked like it was going the CCJ route I could then jump in and start offering a somewhat decent repayment structure or token payment. 

But even then they can't CCJ until I am defaulted right?

Morally it's probably not the right thing to do but it just makes me feel like it's the most logical approach with the least amount of credit score/report damage while also potentially paying back the least amount of money with settlement figures as the debt degrades in value the longer it's on these token payments/dmps.

Am I being naive or have misjudged the way it works out? All of this is quite new to me so I might just have the wrong end of the stick.

What I can tell you is that if you give them no hope they will default earlier, start by paying £1 per debt per month, tell them you lost your job and risk becoming homeless.

Then write a month later and say your circumstances have got worse and you will not be making any further payments to your debts. 

Ignore any attempts to contact you except a formal letter before action. in fact before you start I would give update your records to say you have been getting a lot of spam so your new email is xyz@mail.com and your new number is 074 xxxx xxxx, get a PAYG sum from tesco and a cheap non smart phone. Then when you default you will make a GDPR request that they only contact you by Royal Mail as you are having a mental health crisis and you are withdrawing consent for SMS, phone or email as means of contact.  This way when your debt is sold it will have these new contact details which you can turn off as necessary.

It means you only answer calls when you can see the number is someone in your phone book who is family or friend, block others, let called ID withheld go to voicemail and do not respond to those voicemails.  Setup rules in your email to file emails from the providers so you do not go over them and they do not see if they are read.

Most of my creditors sold their debt within 3 months of the letter where I told them I would not be making any further payments, if you just don't pay then they hope things will get better, they need to think this debt will never be recovered and it will look bad on their balance sheet.  Don't feel bad, the money they lent you never existed in the first place, they just created it to enable them to charge interest at 31%, it costs them £117 to create the £3900 and you will pay £1209 a year to service not reduce the debt.

This is known as Fractional Reserve Banking, I am not particularly against this until something better comes along or it is improved, what makes no sense to me is that the money is created out of nothing, it creates more money in interest charged, then where there is a default as little as 5p in the £ is recovered. Yet the full debt amount is sold, creating yet more debt in the economy because the original lender is now allowed to create more money for the same amount you just defaulted on.  

So we are creating perpetual debt which damages the countries rating, if I were a political leader I would start by reducing the whole cycle of debt recovery to 3 years, I would disallow consumer debt to also have a CCJ, they choose one or the other.  I would also only allow the debt collectors to claim 10% of the debt which is still 3x the reserve in the UK.  This would encourage more responsible lending.

This is also just the consumer debt aspect, the fact that when each loan is spent the receiving bank can then lend 97% of that just creates 457 iterations making £10,000 create £333,000 of debt.

https://www.youtube.com/watch?v=mzoX7zEZ6h4

So getting back to your debt, just make your plan, change your contact details, open the new basic account as a backup (not with any existing creditor), drop them a line saying due to a change in circumstances you will only be paying £5 or £1 a month.  Then just pay the money to the basic account that you would have paid to your debts and wait for the poop to hit the fan.  Do not engage with any letters demanding a budget or SOA, try to keep all debts together because they will see from your credit record if you make contributions to other debt.  

DisabledDan

stu12345_2 said:

£30 to £40 a month imo  and why is your electricity £150 a month are you using old fashioned storage heaters for heat

My bill is around £68 every six months and I pay a reduced amount. The leccy looked nuts to me, maybe if OP was running an indoor farm or bitcoin mining !!

DisabledDan

Jvoke said:

Superhoopza said:

Jvoke said:

Grumpelstiltskin said:

You say you haven't received a water bill yet, you do realize it will be backdated to when you moved in so where are you going to find that money from, electric also, aren't you providing monthly meter readings to the company?

Yes I realise that. That's why I am thinking of just freezing/not paying some of my creditors this month (July) so I can assess the situation further in August once I have a better idea on running costs. 

Stepchange won't speak to me as they just say with my high salary I can afford repayments (I can't lol) and that I should just keep up with my minimums.

No idea what to do, I need a DMP for sure, but what approach I take to that DMP I am undecided still. I obviously want to minimise the length of impact on my credit score so the default approach is the one I am contemplating the most, also allows me to pick and choose myself what creditors to default and DMP. 

God knows...

I know its a long read but the first 10 or so pages addresses questions like this. The conclusion eventually is that 1 default is almost as bad as 10 defaults so if you go down the default route, which unfortunately looks like the only path for you as you're still £1k a month short even after having no spending money, then you will have to accept a very bad credit file for 6.5-7 years (6 years default and 6-12 months for all defaults to come through). I also raised the questions about whether you can get mortgages with defaults and the answers were mixed but the outcome was someone would say yes but at a much higher rate. 

I know you want to protect your credit file for the future in order to buy a home but unless you can significantly increase yours or your partner's income very quickly, have a big cut on costs or (very unlikely) get the payment structures with your creditors to change to pay less per month, then you simply don't have enough money to pay your monthly minimums. You can't rely on getting 0% deals anytime soon.

Yeah I'm coming to terms with this I think. I'm OK to sacrifice the credit score because realistically I won't be able to save for a mortgage anyway at this rate.

At least 6-7 years gives us enough time to get set back up, even gives us the freedom to rent in different cities/areas of the UK as I work remotely and not tied down to a mortgage etc. Although I am worried mainly on the bad credit score affecting future rental opportunities but I've read online that defaults and the overall score doesn't impact renting, just CCJs/Bankruptcies etc (legal agreements). Not sure though!

Worst case is we could just live abroad again and wait for it to settle down again...

Right now deal with right now, when you have got this debt under control you can create a property buying fund, it does not need to be in the UK and you can do it through a company for better tax.  

DisabledDan

Yeah I'm coming to terms with this I think. I'm OK to sacrifice the credit score because realistically I won't be able to save for a mortgage anyway at this rate.

At least 6-7 years gives us enough time to get set back up, even gives us the freedom to rent in different cities/areas of the UK as I work remotely and not tied down to a mortgage etc. Although I am worried mainly on the bad credit score affecting future rental opportunities but I've read online that defaults and the overall score doesn't impact renting, just CCJs/Bankruptcies etc (legal agreements). Not sure though!

Worst case is we could just live abroad again and wait for it to settle down again...

I couldn't answer that, it would need someone else's expertise. 

There will be many Landlords who do not do Tenant Referencing, no agents so open rent and spareroom.com but is this an opportunity to move to a cheaper part of the UK?  

DisabledDan

Jvoke said:

stu12345_2 said:

when you gave step change your income and expenses and showed yourein deficit , how can they possibly refuse to help 

it don't matter if you earn £100000 and have £110000 in outgoings, they only refuse if you are self employed or not from the UK or currently in a legal insolvency agreement eg bankruptcy 

I tried calling them and went through the automated answers on the phone and it just says that I do not need this service as I am not in a debt emergency (I am lol). 

I went through the online SOA tool too and it just said to keep trying to make repayments... It was the same SOA pretty much as I posted here. So I don't know. Maybe I'll try another debt charity for advice but I'm of the mind that they'll just get me on a DMP asap, when I think I want to default before DMP if that's correct right?

Deal with a real person, I found National Debtline far nicer than Stepchange who I found to be judgemental