Newbie looking for debt advice

Kaz1407 · 19 November 2014 at 1:15PM

Hi
I have approximately £25000 of debt across 7 credit cards. My head has been parked firmly in the sand but I'm now trying to do something about it.
Step change have calculated I can afford at most £20 monthly to each card. However my parents are now trying to help out and have offered me £10000. I'm really looking for advice on the best way to use this. Step change have told me to come back to them with new figures after I have cleared any debt.
I have some full and final settlement figures. The least is 75 per cent of the balance while some will settle on nothing other than the full amount.
All of the credit cards I have spoken to have suspended interest and are happy to have me enter a payment plan which I can afford.
I have read various threads on here which have left me confused. Some about defaulting and paying nothing until the companies take out CCJs. Others about getting credit card agreements before I do anything.
One problem is that I need to keep one credit card active for work purposes. I travel a lot with work and hotels always need a credit card to book. I have an Aqua card with a balance of around £1000 which has a credit limit of £1400. I know the par is high on that,but my cards with low par have much higher balances.
I have 2 Barclaycards with balances of £6500 and £4000. If I defaulted or arranged a payment plan on the higher one, would the lower one be automatically cancelled?
Just looking for any advice anyone can offer a newbie. Want to make my parent's £10000 go as far as possible. Should I be defaulting or entering a payment plan, letting them keep their money for now, and tiring to get lower figures in 6 months or so when they realise my finances are not going to improve?
Sorry if this is a long ramble! X

bargainbetty · 19 November 2014 at 1:26PM

If you need to travel a lot for work, can you not ask your company to provide a card for you? You shouldn't be put of pocket on their behalf.

If your parents do not the money repaid in short order, than you could consider clearing the highest interest debts in full, and applying any remaining to the next debt.

If you haven't already defaulted, then doing so will affect your rating for 6 years. This will apply to settlements, as they will remain on your record. If you don't already have them there. clearing big chunks of debt might get you into a position where you could apply for low-life of balance cards or 0% cards to refinance the debts and make them more affordable.

If you've already defaulted, then your rating is stuffed and you should take any deals you can get, as it makes no difference now! Go onto a DMP and let your parents keep the money completely, as you may find that you can get all the interest frozen and stop the sums increasing as you pay off the capital.

Good luck

sourcrates · 19 November 2014 at 6:30PM

From what you have said, it appears all the accounts are still open, and with the original creditor, is that correct ?.
If so, they may not be that open to offers, as it doesn't look as though you have defaulted on any of them yet either.

Full and final offers are usually made on accounts that have long been defaulted, and sold on to one or more DCA`s.
They are more open to an offer, as they would of paid less for your debt in the first place.

Your choices are :

(1) take the 10 grand and pay off the debts with the highest interest, that should then free up some capital for you, to tackle the rest of the debt.

(2) default all accounts, allow them to be sold on, then make offers on them, possibly pay off more this way, downside, credit file will be trashed for 6 years.

On either option, if any account was opened b4 April 2007, you should CCA them first as failure to produce the correct paperwork, "can", make the debt unenforceable.

Newbie looking for debt advice

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