Where do I start

john_kent · 5 October 2005 at 2:36PM

Hi

I have debt

Lots of it. The last 6 months , i have been trying to find better work , and paying the debt bills off with my savings. These savings will run out in October.

I have read all the guides on here and on the CAB site and am now getting ready to take the plunge.

I have a job interview Thursday which if I get will make things a little better , but i will still be juggling debt for several years.

I am now planning to write to my creditors , asking for balances of what is owing and a freeze on charges and interest payments.

How successfull are the direct approaches. I have six creditors with a total debt of 48k all unsecured.

I am back living with my parents to help cut costs and pay a meagre £50 a week for my bills and food.

There is literally nothing I can do to cut my expenditure anymore. I walk as often as I can. I have a car , but reluctant to sell , as I feel I may be restricting my work opportunities if I cannot undertake weekend or evening work. Public Transport is bad where I am.

I just feel at this point that when I get a new job , I will only be making things a little better for the short term.

My monthly outgoings on debt are £1300. My proposed take home pay from this new job is £1450. So as you can see , all the monthly bills will be paid , but once i have paid parents and car and living expenses like clothes for work , I am into yet more debt. I estimate , I will be paying £1350 for most of my life if I dont address these issues soon.

If one creditor accepts a payment prposal , would the others likely follow suit?
If several agree , and one fails to agree , can I start paying the agreed ones , and then start paying what I proposed to those who did not agree?

Can they make me bankrupt if I have made an offer to pay?

If I do reach an agreement , and i sometimes find I have more money (going through all my junk for ebay at the moment and hopefully get a bit off overtime) can I make additional payments , and will these have to be pro rata to all creditors or could I make one extra token payment to one creditor.

I really am in the poopoo so to speak and even consider bankruptcy , but i see this as the cowards way out.

I guess my biggest fear is if they all say NO to any offer. The last thing I want is for my parents to have a baliff knocking at the door.

Has anyone else on here been in a similar situation with there level of debt and income and manged to get out of it?

I guess these questions have been asked millions of times before , but i an getting so confused by it all after reading for 4 hours plus today/

Thanks in advance for everyones help

John

JAMIEDODGER · 5 October 2005 at 2:59PM

hi john, well done you for taking the first step! it takes a lot of guts to admit you have a debt problem and start to tackle it.

if you could post a list of current income and expenditure with all creditors APR's and min payments etc that would be really helpful, there are great people on this site who from experience will give you some great advice!

good luck to you!

Karnam · 5 October 2005 at 3:03PM

I'm no expert as I'm quite new too, but would your parents be willing to accept a 'can't pay won't pay' rent lifestyle for a few months? I live rent free with my partner's family and it's agreed that we will do so until we have paid off high priority debts like credit cards and overdrafts.

rprinter · 6 October 2005 at 1:02PM

"I really am in the poopoo so to speak and even consider bankruptcy , but i see this as the cowards way out."

All I would say is it works for some people, you learn your lesson and absolutely cannot get credit whilst bankrupt.

The damage to your credit rating for the future is similar to a voluntary arrangement.

Whilst I agree that wherever possible one should honor one's debt, in this situation with no assets (ie house) and that level of debt which would take a very long time to clear, I'd consider it.

rprinter · 6 October 2005 at 1:10PM

I would add quickly that whilst considering your options you should talk with one of the FREE debt counselling services endorsed by lots of MSEers; CCCS (link at top of page) or payplan at https://www.payplan.co.uk

mattp_3 · 7 October 2005 at 11:38AM

Yeah - you can work out how much money you would save with a "free" debt management plan here:

http://www.payplan.com/how-much-could-i-save.php

ceegee · 8 October 2005 at 11:26AM

Definitely, definitely go to CCCS or Payplan. It is too much to try and do it on your own when there is barely enough money coming in to cover your debts. They will go through it with you and work out a repayment plan based on what you can afford. I believe that they can also get the interest on your debts frozen and can even deal with the correspondence side of things for you.

Please do get some help.....you will feel so much better and financially things won't be quite so grim.

System · 8 October 2005 at 1:57PM

John, I made the initial contact to my creditors and the CCCS a couple of weeks ago.

I was also coming on here, reading other people's stories for inspiration and help, but getting fairly confused as to what was the best course of action for me to take.

My advice - call the CCCS. They'll send you a self-help Practical Guide to Dealing with Personal Debt Problems. This pack has really been invaluable to me. It contains loads of relevant info and standard forms and letters to send to your creditors. I've called the CCCS Helpline several times since to get more tailored advice since preparing offers for my creditors.

This pack also contains info on what the consequences are of not paying your creditors. If your debt is all unsecured (all Credit Cards/Unsecured loans?), you don't need to worry about bailiffs at this stage.

As I now understand it, with unsecured debt, you should first try to make arrangements with your creditors. If that fails (and no matter what happens, keep on trying to come to some arrangement with them) then they may seek to recover your debt thru a County Court. The County Court judge would take into account your income and expenses and decide on what you should repay each month. If this was too much, you could then apply to the Court for a reduced payment. If you fail to make payments under a CCJ the Creditor can then apply for a Warrant of Execution to enable County Court Bailiffs to visit your home. Even when they call, you may still be able to negotiate terms for repayment.

Haven't posted that to bamboozle you - just to point out that they probably won't be knocking the door just yet!

Call the CCCS mate, and best wishes with getting something sorted out.

lush_walrus · 8 October 2005 at 2:08PM

There are some very good people on this site to be able to advise on budgets and how you can deal with your situation, so hang on in there and they will all come popping out of the woodwork at some stage

Debt_Free_Chick · 8 October 2005 at 4:29PM

When you go to CCCS or Payplan, they will "walk you through" a budget. To save time, you can get this together yourself.

Follow THIS Self Help Pack so you have all the information ready to hand. That self-help pack also has very useful information about negotiating with your creditors. You can do this yourself, or let CCCS, Payplan or National Debtline do it for you.

Where do I start

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