Help required with large Persistent Credit Card Debt. Have had a recent first Default.

Rob5342

Those letters are just standard wording. I had the same and have just been making payments to the collectors ever since they defaulted with nothing else happening, that's very much the rule rather than the exception.

It can be difficult to change your mindset when you have spent years pulling every trick you can think of to meet the minimum payment but it really is very straightforward.

theville32

Hello everyone who has kindly commented on my recent posts. Thanks so much for your words of reassurance and support. I am still freaking out a bit which is why I have been slow to reply. Although know in the back of my mind that this is the right thing to do. As well as it been the quickest solution for clearing my credit file. Thanks again everyone!

theville32

Hello, would the general advice be:

• after the Cards/Loans Default, to then respond straight away to the original lender/Debt Collection service when they request to setup a DMP - with a monthly amount I can afford to pay?
• Do you need to provide proof of your income/expenses to justify what you can afford to pay?
• What would be the minimum payment amount I could get away with, as I have no income at present?

Thanks again!

Grumpelstiltskin

Don't rush into paying when you get a default, many creditors will sell the debt on fairy quickly.

No you don't tell any creditor or debt purchaser your income and expenditure details

If you have no income then you don't make any payments.

You need to remember you are in control not your creditors.

theville32

Hi Grumpelstiltskin, thanks for your reply.

With regards to this: "If you have no income then you don't make any payments".

I was under the impression the best approach was to pay something, even if it was £1 a month to prevent the creditor/debt purchaser elevating the case legally with CCJ's etc.

Are you saying that if I don't have any income, then as long as I tell them this then that will avoid any further escalation? I would prefer to lean on the safe side to avoid additional stress and visits to the door.

Its also good to know that I should not provide any income/expenditure details to the creditor/debt purchaser. Thanks for letting me know this.

Thanks again

theville32

https://forums.moneysavingexpert.com/discussion/comment/81992037#Comment_81992037

Thanks Rob for your kind words of reassurance. Its always good to hear from people who have gone through the same experience. I was definitely in the 'pay the minimum payment' camp, even though is was unsustainable and causing issues elsewhere.

Grumpelstiltskin

Don't worry about anyone who may knock on your door. They are not debt collectors, just door knockers, treat them as would unwanted religious door knockers, either ignore or tell them to go away.

Paying a very small amount doesn't help at all if you can't afford to pay then don't.

sourcrates

"Are you saying that if I don't have any income, then as long as I tell them this then that will avoid any further escalation? I would prefer to lean on the safe side to avoid additional stress and visits to the door."

If you don`t have sufficient disposable income to make payments with, then taking legal action won`t suddenly change that scenario will it.

You would fill in the same budget sheet for the court, they would see you have no income with which to make payment with, so won`t force you to pay money you do not have, so it may well result in a zero payment order.

In these circumstances it would be in your interests to inform lenders you have no ability to make payments currently, and back that up with a budget sheet, affordability is everything these days, companies have gone to the wall when faced with a multitude of affordability complaints, its taken very seriously by the regulator, and now the companies themselves too.

theville32

Thanks Grumpelstiltskin and sourcrates for your recent comments. Sorry for my slow response. Thanks for clarifying that I only need to pay something if I can afford it.

After the cards Default and the Card owners/companies who have been sold the debt contact me - would the advice then be to write back to them and say I cannot afford to pay anything/can afford to pay x per month? It sounds like the budget sheet might help them understand my situation and perhaps treat me a little kinder (maybe been too hopeful there).

Thanks again for everyone's guidance during this stressful and difficult time.

RAS

https://forums.moneysavingexpert.com/discussion/comment/81889863#Comment_81889863

I'd suggest waiting until the debts are sold or assigned (the latter will be refer to our client etc).

Simply write telling them your business has failed since Covid and you are looking for work. They'll probably check in after about 6 months.

If you are considering affordability claims, Read up and n them carefully and choose the ones you think most likely, as in accounts with credit limits that increased over time despite only paying minimums.

And please get looking for work ASAP. If only to protect your wife's health. Even part-time supermarket work.