Debt help

stu12345_2

remove your emergency  fund and your gym membership , unless you need it for medical reasons  if your going  for a DRO, unsure about holiday fund though, some may say that's not allowed.

let's see what any of other posters suggests 

Loyalroyal_2

i have a call with pay plan on Monday what shoul i do ?

Loyalroyal_2

i go to the gym as i am over weight and at risk of type 2 diabetes would that be allowed?? 

Grumpelstiltskin

Honestly I would not speak to anyone until you are  150% sure you know what you will do.

Under no circumstances agree to anything, don't speak to any of your creditors at all, all they will want to do is get you to pay as much as they want not what you can afford.

It would help if your GP would give you a note stating gym membership  was needed for health reasons.

Loyalroyal_2

I have no idea what I'm doing  never been in this position
Am I not meant to pay any of my credit cards that all I really want to know !!
 

Loyalroyal_2

is a self managed debt management plan a good idea ??

Grumpelstiltskin

Yes a self managed plan is a good idea, but you don't just jump into it. You stop paying all your unsecured debts and wait for them to default, this can vary from a few weeks to many months. During this time you save as much as you can into an emergency fund, you will need this as you will not have access to credit and when your washer breaks down the same week as the car fails it's MOT you will have the savings to cover this

Then when they have defaulted you decide how much you can pay each of them, usually you work out what percentage to pay each one. You then pay them the figure you are happy with not what they want you to pay and you need not supply them with a SOA even if they ask for one.

It needs to have a complete change of mindset, you need to realize you are in control not the creditors.

Loyalroyal_2

Thank you Grumpelstiltskin 
Step change said IVA was the best for me which everyone else said don't do , they said not to do a debt management plan! and its good to know I don't have to provide a SOA 

Grumpelstiltskin

Do not do an IVA under any circumstances.

They are really only for people with a mortgage and a large amount of debt, you have neither.

sourcrates

You have three credit card debts, around 22k in total, you rent, and have no assets.

Its really a process of elimination, as to which debt solution is best for you.

You can immediately rule out an IVA, as you are not a homeowner, have too little debt, and have zero assets to protect.

You can also rule out bankruptcy, you have approx. £450 a month disposable income, so that gives you a 3 year IPA in bankruptcy, you don`t need the nuclear option, not yet anyhow.

You can rule out a DRO for similar reasons.

That just leaves debt management, and self managed is so much simpler, especially with only 3 creditors.

You have had good advice above from the other regulars, yes I understand it goes against the grain just to stop paying, but as with almost everything in life, there is a right and a wrong way to do things, and the way as described above is the best for you.

You really want your debts to be defaulted quickly, and sold on to a 3rd party or parties, once that has happened, you can set up payments on the website of whoever buys your debts.
You will be informed in writing when/if this happens, these companies buy debts for a fraction of their face value, so much further on down the line, they can afford to offer you settlement deals, which will hopefully save you some money.

One thing I must stress is don`t be put off by collection letters/calls etc, they are designed to frighten you into contacting them to pay the debt, get used to them, and understand what they are, and how the process works.

Its a lot to take in and there is so much information you will need to know, so its best done in stages, and the first stage is to stop all credit card payments, and wait until they default you, and be aware now, it may take some months for this to happen.