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

SpireCaptain

RAS said:

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. 

May I ask a quick question on this thread whilst this point is being discussed as following  intently. Are banks likely to reduce the OD limit as soon as money is received?

I'll be in theville32 situation soon of cancelling unsecured debt DDs. If it take a while for 400 customers to use my new bank details for paying invoices- will the bank swallow that money before I can transfer it out to safe account?

 I'm living in my business overdraft, as long as there's enough to cover fees and interest is there less risk they'll take overdrawn money/lower overdraft limit whilst my credit file tanks?

Apologies for the hijack theville32. It's just this point is exactly what you're worried about and a concern for me due to being overdrawn and income being paid into business account before transfer to pay mortgage etc.

sourcrates

theville32 said:

"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

To clarify, you can close a bank account with a zero balance on it yes, wasn`t certain if it had a cleared overdraft on the account or not, it makes no difference at all if you have other credit products with that same lender.

sourcrates

SpireCaptain said:

May I ask a quick question on this thread whilst this point is being discussed as following  intently. Are banks likely to reduce the OD limit as soon as money is received?

I'll be in theville32 situation soon of cancelling unsecured debt DDs. If it take a while for 400 customers to use my new bank details for paying invoices- will the bank swallow that money before I can transfer it out to safe account?

 I'm living in my business overdraft, as long as there's enough to cover fees and interest is there less risk they'll take overdrawn money/lower overdraft limit whilst my credit file tanks?

Apologies for the hijack theville32. It's just this point is exactly what you're worried about and a concern for me due to being overdrawn and income being paid into business account before transfer to pay mortgage etc.

There is simply no way to predict what actions a bank may take, you should always keep foremost in your mind that an overdraft is always repayable "on demand" and that they can demand repayment at any time, you should never rely on the money in an arranged overdraft to be available to you.

This is why overdrafts are no good as a long term borrowing choice, the bank can withdraw them any time it wants too.

If you`re in financial difficulties, it makes sense to stop using it, and get a new basic account, and transfer all your payments etc to that new account, and manage without the need for credit, then treat the old one as just another non priority debt to service.

Sometimes you have to be pro-active to avoid been left high and dry by the actions of your lender.

theville32

Is there anyway I can try and continue paying off 1-2 credit cards, so I can have access to some credit if required for work/jobs etc? Or would the borrowing/credit facility on this card/s be cancelled once I start defaulting on all my other cards? 

Just a bit daunting to not have access to credit for 6+ years and wondering if there might be a way to keep 1-2 cards. Although I would need to use my 'Emergency Fund' to try and pay these off in the next 1-2 years. Thanks.

sourcrates

After 30 plus years in debt to various banks, and financial institutions, one IVA, and a DRO, as well as time spent in debt management, I became debt free some 12 years or so ago.

I have not used credit in the vast majority of those 12 years, my modest income is my credit, and when its gone its gone, I never intend to be a slave to a bank ever again, so can I ask you, why do you want to stay one?

SpireCaptain

sourcrates said:

After 30 plus years in debt to various banks, and financial institutions, one IVA, and a DRO, as well as time spent in debt management, I became debt free some 12 years or so ago.

I have not used credit in the vast majority of those 12 years, my modest income is my credit, and when its gone its gone, I never intend to be a slave to a bank ever again, so can I ask you, why do you want to stay one?

Chapeau sourcrates. In 2 paragraphs you've saved me trawling through your tens of thousands upon thousands of posts to dissect your backstory!

No wonder you are one of the true oracles on here. I've spent the last hour reading various threads from 2007 though to the present from pred credit crunch to post covid, dri, IVA DMP etc.

To know you have first hand knowledge of all 3 of the debt solutions I've been weighing up is phenomenal. I can finally  feel positive in undertaking this journey alone as I know the support/constructive critique  of my decisions on these boards is ready and willing to be given.

To hear you've come out the other side and can help others so passionately but also so matter of fact is incredible. Thank you. 

theville32

sourcrates said:

After 30 plus years in debt to various banks, and financial institutions, one IVA, and a DRO, as well as time spent in debt management, I became debt free some 12 years or so ago.

I have not used credit in the vast majority of those 12 years, my modest income is my credit, and when its gone its gone, I never intend to be a slave to a bank ever again, so can I ask you, why do you want to stay one?

Hi sourcrates, thanks for your comments. Congratulations on becoming debt-free too!

Well, before Covid struck I had an impeccable credit rating and managed my finances really well. I used Credit Cards as they should be and paid the Balance at the end of the month. The Credit Cards allowed me to pay for business expenses, which were sometimes in the thousands for certain jobs. I guess the hope is if I manage to get back to getting these kind of jobs and are debt-free - then it would be nice to have the credit available to do this. 

ManyWays

I guess the hope is if I manage to get back to getting these kind of jobs and are debt-free - then it would be nice to have the credit available to do this.
That is a daydream at the moment. You need to default on all the cards to stop interest being added

theville32

ManyWays said:

I guess the hope is if I manage to get back to getting these kind of jobs and are debt-free - then it would be nice to have the credit available to do this.
That is a daydream at the moment. You need to default on all the cards to stop interest being added

I agree, its just hard to make this final decision to stop paying all Credit Cards, as it feels a bit like stepping off a cliff. For some reason it feels wrong to stop paying the minimum payments, even though I clearly can't afford too! I appreciate your frankness though! Guess I need to do something and this looks like the best option. Thanks

theville32

SpireCaptain said:

sourcrates said:

After 30 plus years in debt to various banks, and financial institutions, one IVA, and a DRO, as well as time spent in debt management, I became debt free some 12 years or so ago.

I have not used credit in the vast majority of those 12 years, my modest income is my credit, and when its gone its gone, I never intend to be a slave to a bank ever again, so can I ask you, why do you want to stay one?

Chapeau sourcrates. In 2 paragraphs you've saved me trawling through your tens of thousands upon thousands of posts to dissect your backstory!

No wonder you are one of the true oracles on here. I've spent the last hour reading various threads from 2007 though to the present from pred credit crunch to post covid, dri, IVA DMP etc.

To know you have first hand knowledge of all 3 of the debt solutions I've been weighing up is phenomenal. I can finally  feel positive in undertaking this journey alone as I know the support/constructive critique  of my decisions on these boards is ready and willing to be given.

To hear you've come out the other side and can help others so passionately but also so matter of fact is incredible. Thank you. 

Hi SpireCaptain, I just wanted to say thanks for posting here and thanking sourcrates for sharing his story and offering such frank advice. It is easy to get consumed with our own problems and having had a quick look at your thread I have realised there are a lot of other people on this forum in similar or more complex financial situations. I fully understand and appreciate how stressful it can be as well as how isolated one feels. This Forum has been incredibly supportive and a breath of fresh air that I wasn't expecting. When contacting debt help in the past, I always seemed to fall through the cracks as my debt was too large and I wasn't making enough money for DMP's. So a big thanks to all of you who are replying to our desperate and sometimes inarticulate posts each day/week. We would all be completely lost without you! 

If I can help in anyway, please let me know. I will be calling Business Debtline again tomorrow about the Barclays Commercial CC and Bounce Back Loan, to try and confirm what the last guy said about defaulting on these accounts. I will update this thread with the info, for people like yourself who also have these types of unsecured debts. All the best and thank you again for sharing your story and journey.