Finally a default!

Kittymumof4

Hi, we stopped paying credit cards in June as our debt reached 75k and was out of control. 

We have been waiting for accounts to default while managing our budget and building some emergency fund, albeit not as much as planned due to essential repairs. 

We had a text message today from Wescot saying they've taken over my husbands M&S account. They've asked him to call them to discuss this. 

Should he call? Do we wait for a letter? 

We have several other creditors and a relatively small amount of money available to service debts each month. After posting our SOA here it was apparent that we have £300 per month max to repay debt. 

Do we have to agree to pay a certain amount each month? Can we set the amount we can pay and they have to agree to it? Do I send proof of why we can only afford a low monthly payment? 

I'm glad we have at least one account that's defaulted but now I'm not sure what to do next. 

RAS

Take it slowly.

How much have you saved, as a percentage of your monthly essential spends?

What was your total minimum monthly repayments before you stopped paying?

And looking at those essential repairs, were they something vaguely predictable? If so you need to build more into your budgeting fund for annual and irregular costs, reducing your £300 appropriately.

fatbelly

There's no rush. Let Wescot run through their letters

Ignore texts, emails and phone calls.

When you are ready, tell your creditors what you will be paying

tigergambit

Kittymumof4 said:

Do we have to agree to pay a certain amount each month? NO

Can we set the amount we can pay and they have to agree to it? YES

Do I send proof of why we can only afford a low monthly payment? NO

I'm glad we have at least one account that's defaulted but now I'm not sure what to do next. 

Answers above. I would suggest you revisit your SOA as well. You need to adjust it for inflation, increases in utilities and make sure you have plenty of wiggle room with Xmas coming. Without looking at it I would think you have no more than £120 spare maximum, probably less.😉

Kittymumof4

Thank you all. I think I panicked when I saw the text. So nothing bad will happen if we don't call them straight away? We won't get bailiffs knocking at the door or anything? 

Okay so we've saved £1100 emergency fund so far, but have the windows and doors and a damp issue to sort out, both of which need doing ASAP but I wanted to build some emergency fund so have held off getting these done. We had booked a UK summer holiday before we realised the mess we are in so this was paid out of the emergency fund money in the first couple of months after we stopped cc payments. 

We allow £540 for groceries (3 adults 1 teen food, toiletries, household etc) and we're struggling to keep within this but I'm not sure if it's reasonable to increase this when we owe so much money.

Looking at our SOA again, I think with everything going up so much we probably have £150 realistically to service debts with giving ourselves a little breathing space each month rather than being down to the wire. But we have 10 creditors and that's not much to split between them all. And it will take us about 20 years to pay it all off! 

We've already cut spending as much as possible and our income is taking into account PIP as I am disabled. 

Can anyone force us to go down the IVA route or bankruptcy? It doesn't seem like we have much money available to pay off such a large amount of debt. 

ManyWays

£540 for groceries (3 adults 1 teen food, toiletries, household etc)
That sounds very tight, I would expect a lot more than that. A debt adviser wouldn't blink at £900.

Could we see a revised SOA without all your self-employment expenses and any other changes? 

I would normally suggest addorability complaints at this early stage of a self managed DMP, but I think you need to be realistic and consider an IVA if stepchange could get one approved. 

tigergambit

We allow £540 for groceries (3 adults 1 teen food, toiletries, household etc) and we're struggling to keep within this but I'm not sure if it's reasonable to increase this when we owe so much money.

No, this is not a reasonable amount. Should be £800 - £900 at the very least. Your SOA has to be realistic, otherwise you will not be able to stick to it. If you can't afford to pay at the moment the SOA should reflect that.