Desperately seeking advice! Please!

collinsona

Hi all, this seems like the best place for advice on how to go about sorting out my huge credit card debts. I really hope someone will be kind enough to point me in the right direction. My partner and I have approx £40k of credit card debt that has now become completely unmanageable. I have been working myself up into a complete state the last few days and weeks (even on holiday I was crying about it all) over what to do. I just want to clear them by paying a much smaller amount over 6/8 years and obviously not pay interest. I phoned tesco bank this morning to ask to do just that and i was on the phone for one and a half hours with a guy who didnt seem to understand what i wanted to do and ended with him saying i could choose to default on my agreement (never missed a payment) and only then they could talk about a low monthly payment? I have felt sick with worry since that phonecall. Also half the credit cards are in my partners name and he wants me to deal with it- will they speak to me with his permission or not? Is that just going to make things impossible? I would appreciate it more than you can imagine if someone could advise me what to do for the best. We can afford to pay something each month to each but nothing like the minimum payment we are currently paying. Please someone help before I drive myself mad with worry! Amy xx

Brie

You might try posting a statement of accounts (SOA) here and see what advice the kind people can give.  There may be things in your budget that can be twitched into place to make things more comfortable.  Look at one of the top stickies as the link is there and then you can post it back here.

Alternative is to go to a debt advice agency - StepChange, NationalDebtline, Community Money Adviser - all of whom will also look at your budget and offer advice.  They can also contact all your creditors on your behalf and get you time to get things organised.  I think that sometimes the creditors take more notice if someone has taken that step into doing something with a known charity agency.  And once creditors know you're dealing with the problem properly they are very likely to freeze interest and fees so your payments will go to the debt itself.  

All agencies will want to deal with you as a couple but this might actually make things easier.  One thing that will happen is that you will both give them authority to deal with things on your behalf.  

Grumpelstiltskin

Never phone your creditors, all they want to do is to get you to pay as much as possible.

Getting your debts to default is the way forward, once this happens interest and charges stop.

stu12345_2

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

collinsona

Grumpelstiltskin said:

Never phone your creditors, all they want to do is to get you to pay as much as possible.

Getting your debts to default is the way forward, once this happens interest and charges stop.

Ive cancelled all my direct debits for the minimum payments but im now absolutely terrified of a barrage of letters/phonecalls/threats I will receive! I probably sound pathetic but ive never been someone who breaks “rules” so this doesnt feel natural at all. Ive paid the minimum payments on these cards religiously for years. Also my partner who shares the debt already has enough to deal with and i am
in charge of the finances in our relationship so I feel completely alone with it all. He works and I havent for the last 20 years bringing up the kids. Every time i think about it all i start crying which is ridiculous but im terrified that by doing this I will throw us into financial trouble and it will be all my fault! 

collinsona

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

Thank you so much, I have followed the link and read that info. I think after phoning tesco bank today thinking I could sort it myself and then having to deal with someone for an hour and a half and having to answer a million questions only to not get a solution at the end of it I feel completely defeated. He finally offered to default my credit card agreement there and then despite being up to date with my minimum payments and he then said I could offer a small amount once I had completed an I and E form but I was so tired and upset by that point that I told him I would go away and think about it?! Should I have just agreed to the default there and then? I honestly appreciate you replying so much, thank you. 

RAS

Let's put it this way.

If you get a full default tomorrow, this will clear from your credit record in 6 years time, regardless of whether the debt is paid off or not. And fees and interest are halted. They do however need to send you a scary letter demanding full repayment within 14 days or they will record the default

If your creditors agree to a reduce payment, they will mark your credit record AP, which will remain on your credit record for 6 years after the debt is paid off in full.

Which damages your credit record longer?

collinsona

RAS said:

Let's put it this way.

If you get a full default tomorrow, this will clear from your credit record in 6 years time, regardless of whether the debt is paid off or not. And fees and interest are halted. They do however need to send you a scary letter demanding full repayment within 14 days or they will record the default

If your creditors agree to a reduce payment, they will mark your credit record AP, which will remain on your credit record for 6 years after the debt is paid off in full.

Which damages your credit record longer?

I will definitely default then, thank you. What will the scary letter say? If it mentions courts, bailiffs etc I will probably cry! (again!) What do I do when the scary letter arrives? Ignore it? When I spoke to tesco bank today they said i could default my account today (im up to date with payments) and then offer a lower payment but I didnt know whether to agree or not so I said I would think about it- should I have just agreed to it? 

2021rdsunshine

collinsona said:

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

Thank you so much, I have followed the link and read that info. I think after phoning tesco bank today thinking I could sort it myself and then having to deal with someone for an hour and a half and having to answer a million questions only to not get a solution at the end of it I feel completely defeated. He finally offered to default my credit card agreement there and then despite being up to date with my minimum payments and he then said I could offer a small amount once I had completed an I and E form but I was so tired and upset by that point that I told him I would go away and think about it?! Should I have just agreed to the default there and then? I honestly appreciate you replying so much, thank you. 

I don’t think any creditor would default unless you miss your contractual minimum payment. And normally defaults are only applied after a few months. My creditors have taken about 8 months to apply a default after missing payments . 

What you need right now is understand how debt collection process works and then make a plan according to your circumstances. Remember we are all just a reference number for the creditors. Nothing horrible is going to happen when/if you stop paying your unsecured debts. Engaging with creditors at this point is just going to stress you even more.  I completely get what you’re saying that it just doesn’t feel natural stopping payments when you always paid in time. I felt exactly the same when I decided to tackle my debts. However, after a lot of reading this forum , trying to figure out how everything works, I decided to go for it. And trust me, life is better. Yes, there was phone calls and letters to start with but you can definitely ignore them. Once they default, they might pass the debt to a debt collector or even sell it. By then interest is stopped and you can then start a reduced payment with whoever takes over the debt. Any letters you receive you can always come back here and ask any questions that you might have. There is a lot of very knowledgeable people on this forum that will help. I certainly have benefited from all the information and advice here. 

collinsona

2021rdsunshine said:

collinsona said:

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

stu12345_2 said:

spend the next 10 mins reading this.
then you can create a plan and solve this and understand how it all works 


you are in control , not creditors, you need to understand that and repeat it many times to yourself 

it's only consumer debt, you can repay it interest free at your pace if you follow the right steps.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

Thank you so much, I have followed the link and read that info. I think after phoning tesco bank today thinking I could sort it myself and then having to deal with someone for an hour and a half and having to answer a million questions only to not get a solution at the end of it I feel completely defeated. He finally offered to default my credit card agreement there and then despite being up to date with my minimum payments and he then said I could offer a small amount once I had completed an I and E form but I was so tired and upset by that point that I told him I would go away and think about it?! Should I have just agreed to the default there and then? I honestly appreciate you replying so much, thank you. 

I don’t think any creditor would default unless you miss your contractual minimum payment. And normally defaults are only applied after a few months. My creditors have taken about 8 months to apply a default after missing payments . 

What you need right now is understand how debt collection process works and then make a plan according to your circumstances. Remember we are all just a reference number for the creditors. Nothing horrible is going to happen when/if you stop paying your unsecured debts. Engaging with creditors at this point is just going to stress you even more.  I completely get what you’re saying that it just doesn’t feel natural stopping payments when you always paid in time. I felt exactly the same when I decided to tackle my debts. However, after a lot of reading this forum , trying to figure out how everything works, I decided to go for it. And trust me, life is better. Yes, there was phone calls and letters to start with but you can definitely ignore them. Once they default, they might pass the debt to a debt collector or even sell it. By then interest is stopped and you can then start a reduced payment with whoever takes over the debt. Any letters you receive you can always come back here and ask any questions that you might have. There is a lot of very knowledgeable people on this forum that will help. I certainly have benefited from all the information and advice here. 

Thank you for replying. That is very reassuring. Why do payplan and stepchange suggest starting a DMP immediately rather than waiting to default? Do the debts default anyway once you start making lower payments on a dmp or not? Im going to write to all the creditors requesting all communication be via letters only- i dont want to be jumping every time the phone rings. I think im also terrified of not being able to get any credit at all, ever! Ive always relied on it. Thank you for your advice and support, it means so much 

Grumpelstiltskin

What you need to do now is start saving as much money as you can now you are not paying your debts.

You will need an emergency fund saved up when the washer breaks down the same week as the car fails it's MOT.

You need a completely different mindset so you will not be relying on credit when the emergency crops up.