Making a Plan

Jaytee

Hi 
I posted yesterday in the Stepchange thread. I was feeling very low and hopeless but today I have pulled myself together a bit and determined to get my debt sorted.
I am 52 and self employed. I won't rehash the bio again but since Brexit and COL crisis my business has gone from thriving to barely surviving. At the start of the year I realised that I needed to go back to employment having depleted my savings to stay on top of my bills. I then relapsed with Graves disease an autoimmune thyroid condition which causes extreme fatigue and anxiety. I am under a hospital consultant. My income has fallen by about 80%.
I have four credit cards and one store card (I used to have a well paid job) and paying the minimum amounts became impossible. I have already sold most of my valuables.
One of my debts (post office cc now Jaja) has been passed to Opos for collection. It has been a shock and made things horribly real. I cannot tell my husband. 

What I would like to do is write to my creditors and ask for a temporary reduced payment plan based on ill health. I can probably do this myself based on templates online. Is there anything else I can do? I have read advice suggesting asking for copies of the relevant CCA. Have already changed contact details on accounts.

Can anyone who has been there please help with advice because I don't want to do anything that will cause problems down the line. I will never get credit again so don't care about a trashed credit record.

Thanks so much for reading 

RAS

Do you own/have a mortgage on a house, or rent?

Do you have any joint accounts with your husband?

Jaytee

Hi
Yes I have a house that is mortgage free. 
I have a bills joint account with my husband which covers all the direct debits for the bills. I am trying to get removed from this.

Grumpelstiltskin

You do realize that if you have joint accounts there is a chance he will find out about your debts. Don't you think it would be better if you told him?

Brie

Hi Jaytee

Glad to hear you are feeling a bit better today.  Sometimes "talking" does help!!

There's nothing to stop you from writing to your creditors and agreeing a payment plan with them.  It might however be easier if you have someone to help you with this.  That's where agencies like StepChange, NationalDebtline or Community Money Advisers come in.  They'll sort through your budget, see what you owe and might be able to pay and then help you set up a debt management plan.   They'll write to the creditors which will stop you getting all the letters which may be a bit distressing at times.  

Frankly most creditors won't be overly annoyed at a reduced payment because at least they are getting something.  Agreement is sometimes assumed - you write to them with an offer and they don't reply so you just start paying.  If they don't like it they will let you know but generally they might come back in a year and ask if things have improved and if not things will just continue to tick along.  

An alternative is to post a statement of accounts (SOA) here and get people to advise.  Look on one of the top stickies for a template for the SOA and there's likely to be the "letter to creditor" there as well.  

Jaytee

Grumpelstiltskin said:

You do realize that if you have joint accounts there is a chance he will find out about your debts. Don't you think it would be better if you told him?

Possibly but he has bipolar type 2 and when he is in a depressive state it will worry him. I do see that I got myself into this mess. We have separate accounts for our own bills and I have long stopped contributing to the joint bills account. 
I can't face that conversation at the moment but perhaps later when I have more clarity and a definite plan.

RAS

Jaytee said:

Hi
Yes I have a house that is mortgage free. 
I have a bills joint account with my husband which covers all the direct debits for the bills. I am trying to get removed from this.

OK, that limits your choice of debt management options. You really do need to talk to your husband. You may well need his consent to remove yourself from the joint bank account. And your creditors can still take any DDs from the joint account, so he may want to close it altogether.

It's also important that you both understand that if a creditor went for the nuclear option and tried to secure the debt on your property, the threat is toothless. They can only record a restriction on jointly owned property and a sensible solicitor can limit the impact of that when you sell. 

Get a new basic bank account, or two if any creditor DDs are paid from the joint account. It may be politic to get what income you have paid into new account 1 and then transfer the DDs to that account. Later, get your income paid into new account 2, then cancel the DDs and close new account 1. 

Stop paying the creditors until the accounts default. At this point don't tell them about your health issues as that delays defaults. Once they've defaulted, pay a minimal amount and advise of your health issues. 

Jaytee

Thanks for all the advice. I think I just need a stay of execution rather than to default on everything. I see that in the future my income will improve and I can start repaying again. I'm not at my limit on the credit cards apart from one. I was thrown when the Jaja defaulted. If my illness becomes long term then I need to rethink.
None of my debt is paid from the joint account. It has enough for the council tax, water, insurance and energy bills. 
Sorry if I am being annoying.

Brie

Don't worry about being annoying!  You're not, you're asking legitimate questions.

I do wonder a bit about needing your husband's consent to take your name off the joint account(s).  The only reason this might be needed is if there is an overdraft and thereby a question as to whether he can manage that without your income. I would start by asking the bank what they require and take it from there. 

Jaytee

Brie said:

Don't worry about being annoying!  You're not, you're asking legitimate questions.

I do wonder a bit about needing your husband's consent to take your name off the joint account(s).  The only reason this might be needed is if there is an overdraft and thereby a question as to whether he can manage that without your income. I would start by asking the bank what they require and take it from there. 

Thank you Brie
There is an overdraft facility (£500) but it has never been used. I have already sounded out my husband and he is a bit confused but maybe no need if I only end up with a single default. He has an impeccable credit record. Pays his credit card off in full every month. 

sourcrates

As a first response to this, why not do as most people in your situation should do, and write and tell your creditors you are having affordability issues due to health problems etc.

Once you do that they will pause all collection activity, and that will take the pressure off.

Don`t be afraid to tell them, they have to treat you fairly, and affordability is paramount these days, it will give you time to formulate a strategy.