If I Default on Credit Card Will my Overdraft Be Cancelled? - Scotland.

Grumpelstiltskin

When you finally get your default letter it will ask you to make repayments, that is the standard form ( in England anyway ) but it doesn't mean you have to make payments they want, it's payments you can afford.

Please stop phoning any of your creditors, it is a waste of your time and money, communicate with them by E Mail or letter  if you must but phoning them does nothing but end up upsetting you.

Also if you owe money to the bank you have your current account with you need to set up a new basic current account with a banking group you don't owe money to and manually transfer all vital direct debits, don't use the switching service then any overdraft etc. just become another unsecured debt.

sourcrates

Oh I see, OK, yes that`s standard procedure anyway, banks pass bad debts to a DCA to collect.

You may as well just let the inevitable happen, if you can`t afford to pay the minimum, then no point in struggling.

Bronvahl

debtslave2024 said:

@Bronvahl, thanks for another in depth post. I have learned today after asking to negotiate things, that my income will most probably be terminated. It looks like I will indeed default on credit card debt, and am probably heading towards “benefits land.” I will also add that given my extensive job search some months ago, I reckon that my chances of being employed by others before the economy started to contract was 1 to 3% based on number of applications made. Now after the budget, I am struggling to even find things that I reckon I can do.

As for zero hour contracts, yes, have done them, and they should be banned (as other countries have already done.)

Today, I am just trying to compose myself. As you said, at least I have managed to pay my mortgage off!

By the way what is a CCJ? I am imagining a court order? This is my biggest fear.

Since leaving the military I have always had jobs either based on "payment by results" or formed my own businesses.

It took me 19 months to accept that I would have to go on benefits, that was why my credit card debt was so high.

I made the mistake of giving them token payments when they had already trashed my credit record, token payments extend the debt, when you stop communicating and stop payments the clock starts on the 6 years, for some contracts it is 6 years from the date of default.

It really is no big deal, what we need to do now is for you to do an SOA so we can help you cut your outgoings. I learnt in running my own businesses that cutting costs or not taking them on in the first place is part of making a profit.  When I look at start-ups these days I see evidence of the disease of OPM, spending other people's money (venture capitalist), they have too many duplicate roles, too many offices, too many badly negotiated contracts.  In one contract role I was asked about a contract for a public sector company with a very large software company.  As it happened I worked for a similar company years earlier so I understood their mindset.  To cut a long story short, I helped the reduce the software cost for the entire suite from £235 per desk to $25.

Running a home is the same thing, some people took on costs like broadband or mobile phone paying way over what deals MSE offers.  I heard someone on the radio saying they were paying £67 a month for Broadband and limited TV subscriptions (not even Sky).  

This comes down to NEED vs WANT, if you have Sky TV you can call them up and cancel your TV (if you are out of contract) you tell them you have been made redundant and they offer you a reduced price for 6 months.  People accept that because it is less than they were paying, while I would say, terminate it, you don't NEED it, there are a plethora of free channels with more TV than you could ever want. It does not matter if you have recorded something on their box, it is all available elsewhere for free.

I put Sky TV as an example but there are so many costs you can cut, you might get a redundancy payment but even if you don't you can get reductions in thing like Council Tax, Water bill and so on.

https://www.gov.uk/apply-council-tax-reduction

Broadband and Telephone line are obvious targets, I dumped my landline over a decade ago and I don't have a broadband contract.  The broadband vendors are playing a game of "upsell", they did this years ago but reducing the performance of cheaper services even though the line was perfectly capable.  They call it Traffic Shaping but basically they throttle your line.  So they tell you that you need a faster fibre and the upsell game continues, members of my family have well over 100mb on Virgin and still complain about performance, yet I can get by on 10mb even if I use free streaming services.  Currently I can get 30mb albeit that the latency is not great under heavy load, but I am not a heavy user so not a huge issue.

I have seen social tariffs of £20 a month for 73mb,  as things are now I might be able to squeeze £20 out of my budget I thought, so I did the test to see what Broadband speed I could get, it was 30mb, that is the max for this area despite it being quite new, close to the exchange etc.  So what would be the point of paying £20 a month when I can get by without.

I think you need to use the Statement of Affairs tool to list out where you are spending, then the good people on here can help you work out what are priority debts, what are priority outgoings and what can be cut back or even dropped.

Pruning to the bone puts you in a position where you will not have to create more debt but that does not mean you need to pay off your unsecured debt. It means you have more to invest in YOU, that might be a course or some other things that help you switch tracks.

A CCJ is nothing to worry about unless you want to borrow money, but guess what, you don't NEED to borrow money, you can keep your car going until it becomes a sunken cost money pit.  Meanwhile you can start saving all the money you manage to cut back on by taking advice here to create an emergency fund.

You might be entitled to a grant, take a look at the Turn2Us website to see what there is in your area.

I had so many debts debts, I think I had 3 or 4 CCJ's but only 1 for consumer debt despite all the loans and cards I had in place.  As a result I have learned how they operate, recently some fool bought up two of my old debts that were around £34k off the top of my head.  Well first they faked that amount by adding fake charges that they are not entitled to do and second the debt is all statute barred, if they don't take you to Court within 6 years of default they can't take you thereafter and even if they get a CCJ it does not mean you have to pay towards it.

The money never existed, it was invented by our banking system under something called "Fractional Reserve Lending" you can find videos explaining it on YouTube.  It is not even printing money, it is just invented on the lenders computer, the loan is registered with the central bank to make sure banks don't put themselves in too bad a position. I am not knocking the system, it sort of works, but needs serious reform.

So please complete the SOA and post the results to this thread.

https://www.lemonfool.co.uk/financecalculators/soa.php

debtslave2024

@Bronvahl, and the others. Thanks again for another inspiring post. I am going to lay off posting my SOA just now, as I know have personally discussed it with money charities and what I need to do. I have just checked if I am eligible for Universal Credit, and bizarrely, apparently not.

I woke up feeling a bit calmer today, as I reckon that I am clever enough to get through this mess (with some help from experts.)

Today my focus is trying to find out why I am apparently not due benefits, and looking for other jobs (as current one looks like it is close to ending.)

I even consider doing voluntary work for a charity, though of course I would ideally like a paid job.