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

curlu

It doesn’t seem that you will be advised to default first before starting a DMP by any of the services, it was only by joining this forum that I learned about the significance of defaulting. It comes down to the length of time it can take to recover a credit file that is significant here.
 Am I right in thinking that it’s only at the point of default that fees and interest are stopped? in which case that’s a good enough reason to try and accelerate default too.

 Does your wife understand how the debt recovery process works? I guess like me she probably thinks that bailiffs will turn up at the door as that’s what we are led to believe but I didn’t realise that there is a difference between the different types of debt. Currently I’ve only missed 1 payment and creditors are very politely reaching out to me to ask me to contact them to discuss options. I’ve had no calls or letters yet, just emails and texts. I know it will escalate but I will hold the line that I cannot pay and be saving what I can for emergency fund.  I guess once she realises that you have a plan and nothing catastrophic will happen before you are in a position to start paying, she may feel reassured?

RhiBi

Yes, I was also told to apply for breathing space, which I did as I hadn’t sought advice from here at the time.  My head was in a mess and I blindly followed the advice.  However, they’ve also managed to help me write off one debt for over 12k so they have their good points too.

theville32

I called Barclays Business card this afternoon and asked them to send me the original Terms and Conditions I agreed to in Feb 2004. They said this will take 10 workings days.

Should I also send them a CCA request letter, or should I just trust the guy I spoke to on the phone? Thanks.

ManyWays

Trust the guy on the phone, They have zero reason to lie about this.

theville32

I've just done my own SOA, which is pretty grim reading. My wife is struggling to pay the rent & bills as it is, so she is unable to help me out. The recent reduction in payment from UC since my wife started work again is also not helping, as I am now getting -500 p/mth. This amount reduced in January, which is why I now need to take urgent action. These figures represent my own outgoings, which explains a lot really!

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 1420
Other income............................ 0[b]
Total monthly income.................... 1420[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 50
Gas..................................... 55
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 45
Car parking............................. 10
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 35
Presents (birthday, christmas etc)...... 15
Haircuts................................ 8
Entertainment........................... 10
Holiday................................. 10
Emergency fund.......................... 0
Misc work Expenses p/mth................ 400
Work Utilities.......................... 70
Work rent............................... 890[b]
Total monthly expenses.................. 1898[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 0[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
MBNA Credit Card ..............11960.....0.........0
Halfax Credit card.............3500......111.......25
Lloyds Credit Card.............920.......28........28
Barclay BBL Loan...............6410......132.......2.5
Work Barclaycard Comm..........2940......80........21
Universal Credit Loan..........1416......94........0
Pers bank overdraft............900.......10........35
Pers barclaycard...............2940......23........16
Nationwide Credit Car..........1650......45........10[b]
Total unsecured debts..........32636.....523.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,420
Expenses (including HP & secured debts). 1,898
Available for debt repayments........... -478
Monthly UNsecured debt repayments....... 523[b]
Amount short for making debt repayments. -1,001[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -32,636[b]
Net Assets.............................. -32,636[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using Firefox browser.[/i][/font]

theville32

theville32 said:

Hi ManyWays, thanks for your comments which are so helpful and clarified a lot of points for me. 

9. "but probably better to pay business debts rather more". With regards to this comment, if paying personal cards say £1.00 p/w, how much would you suggest paying the business CC and bounce back loan p/w?

10. "at that point use the reply Form attached to ask for the CCA". I could not find the attachment, Could you resend/reattach please?

Update: So I have setup new personal and business bank accounts, that are not part of any of the banking groups I have debt with.

It so happens that the first payments due this month are to Barclays :-( 

Barclays Business Card (bbc) on 13/01 and Bounce Back Loan (bbl) & Personal CC on 14/01. Total = around £260.00.

The issue I have is that I have been living in my Barclays Personal Overdraft, which is £1250.00. I have to pay £1068 Studio rent today/tomorrow and this will mean that I will then have to go into the OD. This will make it difficult to close my personal Barclays account - while it is still Overdrawn. 

The only thing I can think of is to pay all the Barclays payments due on the 13th and 14th and try my hardest to get out of the OD over the next month. 

Unless you/other members think I could cancel the 2 business payments (bbc/bbl) as it may take a while for them to communicate with my personal Barclays account? The risk is that Barclays Personal then may use my 'cleared' overdraft to try and get money back for the missed Business payments...or refuse to allow me to close the personal account before the 2 missed payments are paid.

Revision: I just remembered that someone previously recommended changing Banks immediately after my next Universal Credit payment, which is 19th January. If I change/close banks on the 20th-21st January that would be the best plan to ensure UC has time to get my new bank account registered before next months payment.

That just leaves the dilema of what to do with the 3 upcoming Barclays debt payments!

Any thoughts on how to navigate all of this are welcome!

Thanks again for all your help, it is appreciated greatly.

Hi ManyWays and other contributors, thanks for all your comments and help! It has been truly amazing and is assisting greatly with my plans to get out of this awful debt situation. I apologise for all the messages. It is truly a very stressful time with a lot going on as I am trying to sort out all my debt as well as closing my current business.

I wondered if it would be possible to get help with the above? My apologies for pushing for an answer as I know everyone is busy and are not just helping me on this forum. 

The most important point I need answered is whether I should pay my upcoming Barclays payments, due tomorrow and Wednesday? It may actually be too late to cancel tomorrow's payment, but Wednesday is £132 which is quite a lot in my current situation. 

I just need some advice on whether the Forum thinks I should try and cancel those DD payments, and if so whether I would still then be able to close my Barclays personal & business accounts on 19th/20th January as planned (immediately after I receive my next UC payment)? I am worried that if I owe money to Barclays with these missed payments, that they won't allow me to close these 2 accounts.

As always any help greatly appreciated! Thanks again for all your recent supprt and help :-)

sourcrates

Apologies if I have missed anything here, but you won`t be able to close accounts if you owe money to them.

As these payments you mention are made by direct debt, you can claim under the direct debt guarantee, and get them refunded should you be too late to cancel the DD`s.

There is no need to close accounts straight away, just don`t use them again, and they become just another unsecured, non priority debt to service.

Try and keep things simple.

theville32

sourcrates said:

Apologies if I have missed anything here, but you won`t be able to close accounts if you owe money to them.

As these payments you mention are made by direct debt, you can claim under the direct debt guarantee, and get them refunded should you be too late to cancel the DD`s.

There is no need to close accounts straight away, just don`t use them again, and they become just another unsecured, non priority debt to service.

Try and keep things simple.

Hi sourcrates, thanks so much fro your comment. I think the worry for the Barclays Personal account was the £1250 Overdraft. If I manage to clear this and get it back to zero, the fear was that if I then didn't pay the Barclays Business CC and Bounce Back Loan - that Barclays might try and add these payments to the 'cleared' Overdraft. What were your thoughts on this?

theville32

"Apologies if I have missed anything here, but you won`t be able to close accounts if you owe money to them".
Hi sourcrates, I just wanted to clarify what you said above. Are you saying that I will not be able to close any Barclays bank accounts, if I still have Credit Cards and the Bounce Back Loan with them? From my understanding, I thought this was an important step to not have bank accounts with companies you owed money too. Please correct me if I am wrong. Thanks

RAS

It is important to get your income and essential DDs and SOs paid into and from an account which has no relationship with any of your creditors.

You should cancel all the other DDs and SOs. Any outstanding overdraft on a previous current account is just another debt, except CCA aren't appropriate.

There's always a risk banks will play silly burgers by paying money owed to their credit card from the overdrawn account. Remind them of the DD guarantee and that you'd cancelled them.