Need help getting out of debt cycle!!!

IWantaFreshStart2025

RAS said:

Technically, yes.

Only after you default
And your fail to pay something towards the defaulted debt,
And they send a letter before action to which you do not respond
And they successfully obtain a CCJ, which requires you to pay an affordable payment (which is why they will not bother if they think your existing payment is affordable).
And you routinely don't pay the affordable payment set in your CCJ (you can challenge the sum).
And .....

Basically possible but highly unlikely.  

Consumer creditor letters rely on mentioning an outcome that affects a tiny percent of 1% of debts, because

the debtor is already paying what they can afford
the cost of claiming more exceeds any benefit to the creditor

Thanks for clarifying. That makes sense. I'll definitley not let it turn into a CCJ. I'll pay token minimum payments once I get letter before action and save as much as I can as an emergency fund.

ManyWays

I'll pay token minimum payments once I get letter before action and save as much as I can as an emergency fund.
When it has got to the LBA p[oint, you usually need to make more significant payments to prevent this going to court.

If you want to make token payments, you should start these after getting defaulted, as that will hopefully prevent most debts from getting near an LBA

tigergambit

IWantaFreshStart2025 said:

I was reading my Tesco Bank personal loan agreement and it says if I keep missing payments they can take payments from my wages. Can they really do that or speak to my employer? Anyone know?

Just wanted to say that in my experience Tesco have been the most difficult creditor to deal with. They don't sell on, don't offer discounts and are quite sloppy on the admin side.

On a more positive note you can get them to accept ridiculously low repayments and they don't hassle you.

ManyWays

if the Tesco loan has only defaulted in the last few years, look at an affordability complaint

RAS

IWantaFreshStart2025 said:

Thanks for clarifying. That makes sense. I'll definitley not let it turn into a CCJ. I'll pay token minimum payments once I get letter before action and save as much as I can as an emergency fund.

Your aspirations are contradictory. As ManyWays comments, if you want to avoid a CCJ, you need to start making small payments once the default is registered.

You should get a letter from the creditor which will address one of their three options

They have sold the debt. Wait for the new creditor to write to you and set up affordable payments.

They've appointed debt collectors, ditto.

Less likely, they are keeping the debt in house, but should provide the reference number and details needed to set up payments.

It'll take 3-18 months for debts to default, so you need a new instant access ISA into which you transfer the full amount you have towards debt payments as soon as you are paid.

As you get more defaults, the amount you can save will reduce, but you need to allocate £30-50 per month after they are all in payment.

Humdinger1

@IWantaFreshStart2025 have read and subscribed.   Congratulations on all the steps you're taking.  This situation is not all of your making; irresponsible lending has played a huge part here.  You're gripping it now so please don't feel bad, just keep going.  There's a lot of non-judgemental expertise on this board and I'd listen to that.  You can do this; please keep posting. Love Humdinger