Crippling credit card debt, but …. lump sum incoming

LoveVictor79

Hi all, this is my first post. I have credit card debt which I am struggling to pay. Within the next month or so, I am going to be maxed out (across 5 cards) with no cash left from income to pay.  I also have unsecured loans - my total unsecured debt is c£38k.  I have read everything on here re to simply stop paying, ignore contact and default. However, I am fortunate in that I am receiving a lump sum in October 2025 and will be able to pay off all my debts.  Meantime, though, I am not sure what to do. I would prefer not to default and completely trash my credit file so I would like some advice on how best to ‘play’ things over the next 5 months.  I live in a shared ownership property and whilst my mortgage is reducing, the rent is going up and I’d love to be able to at least purchase some more shares which is going to require a top up on my mortgage.   So, what do I do? Stop paying and hope nothing defaults before October? Contact creditors and make arrangements to pay? Any advice would be greatly appreciated. Thank you. 

ManyWays

If you can't pay the minimums, there is no magic wand that will protect your credit record, which will make it very hard to borrow more for your mortgage. 

I dont normally like talking about "trying to scramble through" options as too often they are based on unrealistic optimism.  However if you are 100% confident about the incoming lump sum, then two options:

The first option is a long shot and will not work for most people, but check your credit records in detail from all three credit reference agencies and see if any of your debts do not appear on any of the three. This is most likely for very old credit card or catalogue accounts, opened before the lender started reporting them to the CRAs. If you have one of those AND IT IS OLD, consider defaulting on that as its unlikely to affect your credit record,(nothing in credit reporting is ever 100% certain.)

Second option is to consider which lenders you are likely to win an affordability complaint about, as you have obviously been lent more than was reasonable. If you can post a list separated into cards and loans with the lender, rough balance and monthly payment, some people here could suggest the most likely.

Then you could default on those most likely ones only, if you win the complaint the negative mark should be removed from your credit record either immediately or when the debt is cleared, so October.

It would probably be a good idea to complain about most of them as this guessing is obviously very crude and even a 1/3 chance of winning a complaint is well worth taking, as it will give you more money later for buying extra equity. But by continuing to pay the less likely ones, you reduce the possible harm to your credit record from defaults on a debt where a complaint doesn't succeed.

LoveVictor79

Thanks @manyways that’s great advice. I shall get my credit records from all three agencies and go through them thoroughly.  I think one of my credit cards is fairly old whilst the others are more recent.

I did not realise you could make an affordability claim so will look into doing that too.