Opinions on best way forward...

[stek2007]

Hello folks, thank you so much for everything on this forum it's proving an amazing help just reading it - so much so it's inspired me to try and sort out my financial mess.

Basically, I've been trapped by credit (again!). I had problems many years ago in 2000 when my business failed and I ended up declaring bankrupt - 3 years later, discharged and repayment free I was in a great financial situation - no credit, living on what I was earning and managing quite well.

Unfortunately then HSBC who had given me a basic bank account gradually increased the options available to me and I was stupidly tempted - so roll on overdraft, credit card etc etc.

Few years later and I ran up scary credit card bills when First Direct (who I switched to) gave me a £6400 credit limit at exactly the same time my partner fell ill and was off work requiring me to cover her usual expenses.

First Direct then offered to convert it to a loan (not a managed loan fortunately) and I suddenly had a £200 loan payment each month. Not too bad, except circumstances and stupidity led to me refilling the credit card and ending up taking out a second loan with Intelligent Finance to cover that.

All was ok for a bit despit £400 monthly payments just on loans - then my car started to fall apart and credit cards came to the rescue...

Skipping to now my situation is that I'm in the best part of £21k of debt - and I'm struggling to meet my minimum payments as well as have any money to live, get to work etc. Quality of life has long since gone away.

After really ignoring the problem for a few months I finally sat down last week and worked out a budget. If I was to meet just the minimum repayments on my credit cards, plus my loan, rent and council tax I'm left with an amount of money that is not possible to live on. Take into account things like car tax, petrol, contact lenses and gym membership and I'm left with less than £100 each month for food etc.

After thinking that bankruptcy could be an idea, and after realising I can't magically earn more money I came accross information on IVA's...

Can anyone out there tell me what the actual experience/benefits are? Will it affect my credit rating for life (one day I would like to get a mortgage etc)..?

I have so far not missed any payments so no defaults etc - but given I've been written to by Barclaycard this week saying they've reduced my limit to exactly what I already owe (over £1200 reduction) because of the info on my credit statement I suspect that even the banks can see I'm living day to day using visa and mastercard because my current account balance gets eaten by payments...

Hope this wasn't too much of a rant, and would really appreciate any advice out there...

Ste

[stormo]

Hello stek2007 welcome to CAG,wow i suppose reading your circumstances £21K is a lot of money to be in debt by,sorry for stating the obvious.

I know how the debts can suddenly mount up,and to be honest i would be worried about it especially if as you say the quality of life is affected.

I am glad you have faced up to the fact that this situation cant go on as this is the hardest part to admit to,people often bury their head in the sand a la ostrich.

I`m no expert and maybe someone can come along to advise you better but could you give up the gym membership for instance saving you a bit i know it can be awkward with contracts etc.

Also how about contacting CCCS or CAB someone who doesnt make money out of your misfortune.

Good luck Regards S

[payingonlyencouragesthem]

Don't be frightened by big numbers - some of us here have several times the amount of debt you have and couldn't care less. IVA's carry exactly the same credit stigma as bankruptcy, take 5 as opposed to 1 year to clear and cost you a lot more money. Your best way forward is just to pay your creditors what you can afford (could be as little as £1 a month) and see what they do. Then report back here for advice. Paying even a little on a regular basis will keep your nose clean if anything gets to court (as you are not a homeowner it almost certainly won't). Don't be suckered into an IVA - they just make a fortune for the spivs who push them.

[tomterm8]

I am no longer welcome on CAG

[stek2007]

Hello,

Been a few months since I've been on here - but thanks to advice from this group I've had some great help from CCCS and am now on a debt management plan arranged through them which has really helped me get on track.

My creditors have all agreed to the payments CCCS proposed which is great, but I'm finding that most are not doing me any favours in terms of interest or charges.

To my surprise (given they're normally given bad press) Capital One are the only ones who've suspended interest/charges.

First Direct who own the bulk of my debt are wanting to charge interest at 6% above the base rate. Anyone think it's worth arguing with them? They're also charging £30 a month on 3 accounts for non-payment/unauthorised overdraft fees - but obviously I'll get these back...

Any help appreciated,

Cheers

Steve

[powelll]

CCCS are very good but in terms of creditors who carry on refusing to freeze interest / charges etc they are a bit more limited. Essentially you need to weigh up whether there is an incentive for you to carry on paying these ie how much they're charging compared to what they get from CCCS each month.

You could go the route of CCA to them to see if they can produce your agreements & challenge enforceability & stop paying on this basis - lots of people on here will do this but it really is up to you. Have CCS asked them to reconsider their position?