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    • survivor84
    • By survivor84 18th May 19, 7:11 AM
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    survivor84
    Credit cards - can you ring them and ask to reduce payments?
    • #1
    • 18th May 19, 7:11 AM
    Credit cards - can you ring them and ask to reduce payments? 18th May 19 at 7:11 AM
    Hello,

    I am very new to the forum but am in need of major advice! I have very recently left my abusive marriage and have been left with lots of debt in my name (26,000) on credit cards. I am really struggling to meet the minimum payments each month and pay for everything else in the home. I work full time, the total debt is slightly lower than what I earn a year. I have four children to support. What do I do? I really need to get a hold of my finances. My mum has said if I ring up the card companies and explain my situation and ask to reduce my payments they might let me, what do you think? Thanks so much xx
Page 1
    • amersall
    • By amersall 18th May 19, 8:59 AM
    • 16,832 Posts
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    amersall
    • #2
    • 18th May 19, 8:59 AM
    • #2
    • 18th May 19, 8:59 AM
    Ring them and ask, have income and expenditure to hand.
    People can get arrangements to pay.

    • Willing2Learn
    • By Willing2Learn 18th May 19, 9:15 AM
    • 3,222 Posts
    • 2,782 Thanks
    Willing2Learn
    • #3
    • 18th May 19, 9:15 AM
    • #3
    • 18th May 19, 9:15 AM
    Hi survivor84 and welcome to the forum

    You really need to be posting on the Debt-Free Wannabe sub-forum. Over there you will receive quality advice, guidance and support to move forward. It would be really helpful if you could post your Statement of Affairs (SOA). With an accurate SOA, MSEers will be able to see your exact circumstances and advise accordingly.

    You need a plan to make things add up again. A Debt Management Plan (DMP) could well be the way forward for you. For free professional advice, you can contact StepChange, CAB, PayPlan and National Debtline.
    Last edited by Willing2Learn; 18-05-2019 at 9:17 AM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • redfox
    • By redfox 18th May 19, 10:18 AM
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    redfox
    • #4
    • 18th May 19, 10:18 AM
    • #4
    • 18th May 19, 10:18 AM
    we move threads if we think they will get more help elsewhere (please read the forum rule) so this post/thread has been moved to the Debt Free Wannabe board. If you have any questions about this policy please email forumteam@moneysavingexpert.com.
    I'm a Board Guide on the Quick Grabbit, Food Shopping & Groceries, Shop but don't drop, Loans and Cutting Tax boards which means I volunteer to help get your forum questions answered and keep the forum running smoothly. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this) Any views are mine and not the official line of MoneySavingExpert.

    • sourcrates
    • By sourcrates 18th May 19, 12:13 PM
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    sourcrates
    • #5
    • 18th May 19, 12:13 PM
    • #5
    • 18th May 19, 12:13 PM
    Hi,


    Credit card companies will only enter into short term payment arrangements with individual customers, usually not longer than 6 months.


    If its long term debt mangement you are seeking, then you must go through one of the free debt charities, as with everything in life, there is a correct process to follow, if you go through one of the recognised debt charities, the creditors have more discretion to agree permanant lower repayments.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    • keepcalmandstayoutofdebt
    • By keepcalmandstayoutofdebt 18th May 19, 2:50 PM
    • 3,596 Posts
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    keepcalmandstayoutofdebt
    • #6
    • 18th May 19, 2:50 PM
    • #6
    • 18th May 19, 2:50 PM
    Yes most financial places now have to provide 'counsel'.

    The credit card company definately offered help when I said after 4 months of paying the recommend (above minimum payments which took the charge to over double the payment) could I revert to min payments as I'd been happily paying this without problem; they were asking if there was anything I could be helped with until I was of the phone. I even got an email confirming back to min payments though the telephone advisor thought that wouldn't happen.

    I recently done a chargeback on an unrecognised e-book direct debit charge through my bank (ironically involving debt advice when I know I wouldn't go near private advice on consolidation loans as I simply don't have the credit rating so lol and the only place I'd tried was National debtline who make it clear they don't deal with all types of lease that I was seeking particular help with) and they (the bank) offered free help too, there and then. Years ago I imagine they wouldn't have.

    You aren't going to get anywhere by not asking.
    "If you are caught in a rainstorm, once you accept that you'll receive a soaking, the only thing left to do is enjoy the walk"
    • survivor84
    • By survivor84 18th May 19, 6:19 PM
    • 25 Posts
    • 5 Thanks
    survivor84
    • #7
    • 18th May 19, 6:19 PM
    • #7
    • 18th May 19, 6:19 PM
    Thanks so much for the replies. Please find my SOA below:

    Household Information
    Number of adults in household........... 1
    Number of children in household......... 4
    Number of cars owned.................... 0

    Monthly Income Details
    Monthly income after tax................ 1901.35
    Partners monthly income after tax....... 0
    Benefits................................ 1216
    Other income............................ 0
    Total monthly income.................... 3117.35


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 925
    Management charge (leasehold property).. 0
    Council tax............................. 158
    Electricity............................. 62.1
    Gas..................................... 53.06
    Oil..................................... 0
    Water rates............................. 41
    Telephone (land line)................... 0
    Mobile phone............................ 106.54
    TV Licence.............................. 12.13
    Satellite/Cable TV...................... 32
    Internet Services....................... 33
    Groceries etc. ......................... 500
    Clothing................................ 100
    Petrol/diesel........................... 140
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 20
    Car parking............................. 20
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 200
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 12.02
    Life assurance ......................... 7.47
    Other insurance......................... 21
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 50
    Entertainment........................... 50
    Holiday................................. 30
    Emergency fund.......................... 30
    Total monthly expenses.................. 2643.32



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    credit card....................9990......234.......0
    credit card....................9811......224.......0
    credit card....................2750......115.......0
    overdraft......................3000......0........ .0
    credit line....................1300......53........0
    store card.....................1800......60........0
    credit card....................3100......173.......0
    Total unsecured debts..........31751.....859.......-



    Monthly Budget Summary

    Total monthly income.................... 3,117.35
    Expenses (including HP & secured debts). 2,643.32
    Available for debt repayments........... 474.03
    Monthly UNsecured debt repayments....... 859
    Amount short for making debt repayments. -384.97


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -31,751
    Net Assets.............................. -31,751


    Any help or advice you can offer is much appreciated. I am finding that making the minimum repayments on all the cards is crippling me. I'm then having to borrow money to make ends meet and it's such a vicious cycle. Thank you so much. xxx
    • Willing2Learn
    • By Willing2Learn 18th May 19, 6:27 PM
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    Willing2Learn
    • #8
    • 18th May 19, 6:27 PM
    • #8
    • 18th May 19, 6:27 PM
    My initial thoughts:
    • Are you getting a single person discount for council tax?
    • Are you receiving child maintenance from your ex-husband to help pay with the day-to-day care of your four children?
    • How come your mobile 'phone cost is so high?
    • Is there any way you can reduce your groceries by shopping at Lidl or Aldi? Do you batch cook?
    • Why are there 180/month costs related to a car when you do not own a car?
    • What exactly is the 200 other child related expenses for?
    • Are all your unsecured debts really at 0% APR?
    Last edited by Willing2Learn; 18-05-2019 at 6:30 PM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • survivor84
    • By survivor84 18th May 19, 8:37 PM
    • 25 Posts
    • 5 Thanks
    survivor84
    • #9
    • 18th May 19, 8:37 PM
    • #9
    • 18th May 19, 8:37 PM
    I have applied for council tax discount, yet to hear.
    No child maintenance from ex husband.
    Mobile phone cost os for 4 mobile phones, mine and 3 childrens.
    I already shop at lidl/aldi and batch cook. My boys are big eaters.
    My grandad lets me borrow his car.
    200 other child expenses are sports clubs for four children which also double as after school clubs.
    No they're not at 0% but I din't know what % they are, definitely high!

    Thanks
    • enthusiasticsaver
    • By enthusiasticsaver 18th May 19, 10:00 PM
    • 8,508 Posts
    • 19,772 Thanks
    enthusiasticsaver
    I think you will need some sort of debt solution but in the interim period I suggest you phone and ask for some breathing space while you sort your finances out. It will affect your credit record but to be honest borrowing more either on cards or loans is the worst thing you could do anyway. Depending on the interest rates your debts are charging you a DMP may be a good option or even bankruptcy.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • survivor84
    • By survivor84 19th May 19, 6:27 AM
    • 25 Posts
    • 5 Thanks
    survivor84
    Thank you. I have thought about bankruptcy but it scares me. x
    • survivor84
    • By survivor84 19th May 19, 6:29 AM
    • 25 Posts
    • 5 Thanks
    survivor84
    So with what you're saying about breathing space, should I phone the card companies and explain? Would they let me reduce my payments? Or is it better to go through someone like step change or citizens advice, Thank you so much x
    • Willing2Learn
    • By Willing2Learn 19th May 19, 6:58 AM
    • 3,222 Posts
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    Willing2Learn
    Yes, of course your creditors would allow reduced payments. That would, in effect, be a DMP (Debt Management Plan). A DMP is an informal agreement between the borrower and their creditors that allows payments to be made at a lower level than stipulated in the original credit agreements. The accounts will often be defaulted (as the borrower has defaulted on the original agreement). This is good, because as soon as the accounts are defaulted, the interest and charges are frozen.

    It would be good for you to speak to one of the quality free debt counsellors. It may help you decide which plan you want to move forward with. This advise could be from CAB, StepChange, National Debtline or PayPlan.

    The first thing you need to do, whether you take the DMP route or bankruptcy, is to open a new current bank account with a different banking group (not with any bank to whom you money). This will ring-fence your income as your overdraft could be withdrawn without notice.

    Have a look at the DWP Child Maintenance Options website. Your ex-husband should be making his financial contribution toward the day-to-day care of your children.

    Your outgoings should reduce once you get single persons' discount on your council tax.

    If you decide to embark on a DMP journey, then I recommend writing to all your creditors stating that you DMP will commence in November and that you will be unable to make any payments prior to this date. This will allow you six months breathing space, which is plenty of time to build a sizeable pot of money for your Emergency Fund (EF). An EF is a vital component of any successful monthly budget as it covers you against any unknow expenses that will crop up from time to time.

    The other advantage of delaying the start of a DMP and withholding payments for six months is that your creditors are much more likely to default you early, thus freezing interest and charges. Early defaults will mean your credit file will repair itself quicker too.
    Last edited by Willing2Learn; 19-05-2019 at 7:06 AM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • survivor84
    • By survivor84 19th May 19, 7:20 AM
    • 25 Posts
    • 5 Thanks
    survivor84
    Thank you so so much for all of this advice, I really appreciate it. Unfortunately due to the abuse we are zero contact with my husband, he doesn't work and has stated categorically that he will not pay for the children, which is fine by me, I just want him out of our lives. Can you tell me with a debt management plan does this stay on your credit history? I'm in no position now but keep working my way up the ladder at my job and would like to think that someday I can buy my own home and worry about the effect a bankruptcy etc would have on this in the distant future. Would I have to contact one of the advice services before writing to the creditors and explaining? Thank you so much for the idea about accruing the money in the next 6 months, such a good idea. I guess I need to know more about a debt management plan.

    Also re the new bank account would I need to have my wages and direct debits etc transferred there, or do I wait until I'm in the DMP? Thanks again, you've been so helpful. xx
    • survivor84
    • By survivor84 19th May 19, 7:26 AM
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    • 5 Thanks
    survivor84
    Also can you tell me who decides how much you pay back each month in the DMP? The more I read about it the more I like the idea of the DMP. Thank you.
    • Willing2Learn
    • By Willing2Learn 19th May 19, 7:58 AM
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    Willing2Learn
    When an account defaults, this is marked on your credit files. The mark remains on your file for six years from the date of default. That is why it is good to have the accounts defaulted nice and early. Some MSEers have successfully applied for a mortgage with defaults on their file, having used the services of a good mortgage broker. Others wait the six years and then apply for a mortgage direct with a high street bank once the defaults have automatically been removed from their file.

    Most people arrange a DMP via an agency such as StepChange, who will manage the DMP on their behalf. Others decide to self-manage their own DMP. You do not have to contact an advice service before writing to your creditors. But I recommend you speak to one of the advice services tomorrow morning or whenever is convenient for you.

    Your new current account needs to be set up asap. You can transfer all your DDs across and notify your employer so that your salary can be paid into it. You could even claim a switch incentive of up to 175 if you switch banks using the new banks switching team. Just make sure the new account is not with any of the banking groups to whom you owe money

    You decide the repayment amount for each creditor, based on your income and expenses. Obviously, if your DMP is being managed by an advice agency such as StepChange, then you will decide together the exact amounts. The most important thing is to ensure the repayment amounts are realistic and affordable. (ie Your SOA would balance if you were to enter in your DMP payments).
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • survivor84
    • By survivor84 19th May 19, 8:38 AM
    • 25 Posts
    • 5 Thanks
    survivor84
    Thank you!
    • survivor84
    • By survivor84 19th May 19, 8:42 AM
    • 25 Posts
    • 5 Thanks
    survivor84
    Can I just check am I opening a new bank account, not switching? Thanks
    • Willing2Learn
    • By Willing2Learn 19th May 19, 9:32 AM
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    • 2,782 Thanks
    Willing2Learn
    Either. If you use a bank switching service then the DDs will be transferred for you automatically. Just make sure it is with a different banking group and remember to decline any offer of an overdraft
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • enthusiasticsaver
    • By enthusiasticsaver 19th May 19, 11:56 AM
    • 8,508 Posts
    • 19,772 Thanks
    enthusiasticsaver
    Great advice there from Willing2learn and it does sound like a DMP would be the best option for you. It will stay on your file for 6 years but that will give you a chance to get your finances sorted and save up a deposit if buying a house is your ultimate gain.

    I agree opening a basic clean bank account with a bank you have no borrowings with at the moment is the first thing you need to do along with informing your creditors you are sorting out your finances and need 6 months breathing space which most will give you. Defaulting is good because it freezes interest and use that 6 months to save up a decent emergency savings account as you will have no access to credit after taking a DMP on.

    What you can afford to pay depends on the soa agreed with stepchange, national debtline, cab or indeed direct with your creditors if you decide to go self managed. Don't skimp on the soa. There are guidelines online on what you can put on it and allow as much as they will agree to on the soa to keep the DMP payment low. You can always save up and offer F and Fs further down the line to get rid of the debt earlier. Check out the DMP mutual support thread on here.


    Good luck. Maybe start a diary on here to document your journey.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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