Disability & Unsecured Borrowing

Altior

https://forums.moneysavingexpert.com/discussion/comment/82103284#Comment_82103284

I have considered it. The ideal scenario for me would be to be permitted to pay down my outstanding balances without interest or charges, I could probably do 2% a month and increase that as I progressed, so perhaps three years total to clear. That's the realistic prospect as I can manage the minimums now but not if circa 30% annual interest is added. It would be better for my creditors and myself, which is why I am comfortable with APs.

I realise it goes against the grain of almost all of the advice on these boards, but I'm not fussed about restoring my credit report as quickly as possible. I am considering contacting them regarding my scenario on a one on one basis. There's not much to lose as if they say no, I'll just default.

There's no rush as I should have until March at least, and renewed BT offers are always possible.

RAS

You do understand that the main reason for getting defaults is that then freezes interest and fees?

So there'd be a brief period of rising debt which would then stabilise and everything you pay comes off the balance.

That's why we advise that you stop payments and chase defaults

Altior

https://forums.moneysavingexpert.com/discussion/comment/82103356#Comment_82103356

Definitely. I'm exploring the possibility of avoiding the rising debt and fees bit. For me, if I get a default or an AP it makes no practical difference. I understand that AP's can lead to defaults anyway. I just feel like paying any material interest will be psychologically challenging, since I spent much of my life manipulating the credit card system to avoid it. I have accepted that it might be unavoidable.

sourcrates

I would at least give the "write off" approach a try, lots of people on long term sick have had success obtaining write offs after just one letter in some cases, some companies have a policy of not chasing bad debt if the clients only income is sickness benefits.

As an example, my late Brother suffered a stroke in 2019, left him unable to do simple tasks, brain damage etc, I wrote to his creditors explaining the circumstances, and after some letter tennis, they wrote off all of his debt, three credit cards and two loans if memory serves me.

All within around three months from the first letter, and it was not difficult either, so I would definitely explore this if I were you.

Altior

https://forums.moneysavingexpert.com/discussion/comment/82103837#Comment_82103837

Thanks, I'll need to seriously consider this option. There's nothing to lose really, but it doesn't sit easily with me as I still have full mental faculties etc. But I suppose I need to try and be more pragmatic, and swallow my professional pride.

RAS

How many of your debts are still with the original providers?

Anyone else paid a percentage of the book value. So maybe a 70% discount.

If it's been through a few collectors the most recent may have paid 5-10% of the book value.

They've probably made a decent profit from you already.

Altior

https://forums.moneysavingexpert.com/discussion/comment/82104733#Comment_82104733

I'm at the planning stage, on my numbers the risk of not being able to make contractual payments won't be until April 2027. That's why I'm looking at the options now, as I think I can get it down to two creditors by the time that happens. Broadly they have the same standard rate, any differences are not enough to make a material difference.