Credit Crunch - What now?

[dashforcash]

I opened the letters and I have finally added everything up, see below for the specifics. My total unsecured debt is £73k and my net monthly income is £3k. After taking all the priority payments and being really tight on miscellaneous expenses I have £400 pm. Effectively 0.6% for each creditor and the accounts cleared in a little under 14 years. No wonder I cannot sleep at night and what makes it worse is that my wife has no idea. Think she will leave me and take the kids if she finds out. So all seeming quite grim.

 

Is there anything I can do initially to delay the collection process or should I just start by trying to get them to accept reduced payments?

 

Worst of all this is the need to travel with my job and claim the expenses back. Getting overseas with no money and no credit card is major problem as the card I was managing to keep going has, following a payment of £6k, reduced my limit to just a few pounds above the outstanding balance of £175.00. Have seen a pre payment credit card but as always they take a cut on every transaction. If my employer finds out about this situation then I will no doubt get fired!

 

Any guidance from you guys would be so very much appreciated on where to start or the best strategy.

 

Can anyone beat me on this figure because if they can perhaps I will feel a little better! Not sure I will sleep any better tonight but at least I have faced the music. As to how did this happen? Well perhaps a story for another time which involves the death of a child and trying to buy happiness again.

 

Thanks

 

Virgin (MBNA) 4,826

Next 500

Nationwide 3,415

Mint (Royal Bank of Scotland) 2,641

Marbles 977

 

Lloyds TSB Credit Card 13,475

Lloyds TSB Loan 1,577

Lloyds TSB Overdraft 6,006

Lloyds TSB Overdraft 982

Lloyds TSB Overdraft 188

 

John Lewis 422

Halifax 9,725

Egg Money Account 8,842

Egg Loan 3,011

Egg Credit Card 8,486

Cahoot Flexible Loan 7,545

Cahoot Credit Card 539

 

Total £73,157

[nohoper]

Hi

 

I cant beat your 73k but i do know what 44k feels like and I know how much that hurt. I too kept it away from my wife and kids but they found out eventually. Yes there were lots of tears to start but it has made our family closer now than we ever were.

 

I'm working on my debts and now have them down to 28k so still a long way to go.

 

As far as foriegn travel goes etc, could your company not issue you with a company credit card to cover your expenses?

[Misterzeus]

Hi, Mrs Z here, if it makes you feel any better, we are over 90k in debt albeit unsecured.

 

What I will say to you is this ; you should not keep it from your wife.

 

When my DH put me in the "whole" picture as to just how much debt we were in I felt sick as a parrot. TBH, deep down I knew our finances were a mess and that in a matter of time it would become unmanageable, but I had stupidly buried my head in the sand for a good while leading up to the inevitable.

 

As a team, you and your wife can work it out I'm sure. I know how Mr Z felt when we finally had the discussion, he said the relief at us both sitting down and talking about it and our plans for our way forward was unbelievable.

 

As much as it scared me, I came to realise that the financial burden was the both of ours and not just for him to cope with. Our debts built up through trying to maintain living whilst our business was just not working out, certainly not for luxuries.

 

I truly hope that you and your wife can sit down and talk and plan your own way forward and I wish you the best of luck

[dashforcash]

Thanks. Not sure she will stay if I do. Honest!

[AndyOrch]

Oh well if thats the case, a debt halfed (joint) a positive to everything IMHO.A Mrs Z states "I came to realise that the financial burden was the both of ours and not just for him to cope with"

 

 

Regards

 

Andy

[Misterzeus]

The thing is, this is an awful burden for you to have to carry on your own. Are you sure that you won't be able to talk with her? I don't know your personal circumstances of course, but at some point you may find it difficult to hide it from her.

 

I know how awful I felt when DH informed me of the extent of our debt, because secretly I knew it couldn't go on, so in a way it was a relief for me too that it was now in the open so to speak.

 

Please think about it, your wife may be more understanding than you think.

 

Good luck with whatever you decide to do

[ajax95]

Have to agree with Mr/Mrs Z

 

Please try and talk to your other half.

 

I am not saying it will make things better if you own up, but it is much better to do that than worrying about them finding out of their own accord.

 

I've found out the hard way that there is nothing worse than a friendship ruined because of an undisclosed debt.

 

Please try and talk to them about it

 

GOOD LUCK

[esporta-victim]

For everyone with massive debts - you need to talk to someone/partner. You shouldn't try and cope with the stress and burden of this debt alone.

I understand how easy it is to run up debt and feel for you.

 

Not that I have a clue about things but I guess you've all looked a bankruptcy seriously? Failing that start listing all your assets and other possible things you could sell/down grade to raise some cash.

I always laughed at that programme "How to pay off your mortgage in 2yrs" the answer was always set up a successful business and pay yourself loads - if only!

[phat256]

hi dash have you taslked with national debtline on 0808 808 4000 to see what are u options towards your debt?

 

i am bankrupt since 2 month agos myu OH and me we owed about 50 K not counting any interest ... although it is quite extreme but i have no regret of doing it i will be no longer liable to any of our debt in 10 month time .

i was mainly silly i took on a lot of loan and credit card store card etc ... ... because it was easy spending and i had never though of how i will repay them. then the fun began, phone call constantly every day , letter demanding this and that , the threat of bailiff ...

 

to be honest one day i had enough of all this crxp. my wages was only covering the repayment and as such i incure a lot of rental arrear ! i never had enough money to buy food etc... i went to court declared myself BR and now i begin to be much more happier than i was ever .

 

owing money is not a crime ! we all have made mistake at some point.

[AT99]

Hi Dash

 

I was in same boat and was forced into other half finding out when I started new job and missed the postman every day. I am sure many of you what thats like!

 

Anyway, long and short of it is that my wife was surprisingly good about it, disappointed but supportive. It has helped as I can actually deal with things rather than concentrating on hiding things.

 

As for prepaid debit/credit cards; I run a Tuxedo card with a £4.99 monthly payment on, this gives me commission free purchasing here and abroad. It also has great exchange rates if you are abroad so you could tell your employer it saves them money! They could give one to all staff.

 

Can't see your employer firing you for oweing money, unless your job is in the financial sector.

 

Good luck

[Hondaman56]

Hi Dashforcash....

 

I opened the letters and I have finally added everything up, see below for the specifics. My total unsecured debt is £73k and my net monthly income is £3k. After taking all the priority payments and being really tight on miscellaneous expenses I have £400 pm. Effectively 0.6% for each creditor and the accounts cleared in a little under 14 years. No wonder I cannot sleep at night and what makes it worse is that my wife has no idea. Think she will leave me and take the kids if she finds out. So all seeming quite grim.

 

Seems overwhelming, huh? There's a few points right away here - and please don't think I'm being in any way judgmental - just trying to point you to a few things we ALL end up having to consider IRO debts.....

 

First up - it doesn't matter HOW you got the debt you did - but you need to have a SERIOUS look at WHY. Is this all realted to work travelling? Or is it a lifestyle thing? Do you or your partner just spend for the hell of it if you want something, or something else - what's the reason behind all this debt - you need to answer yourself honestly.

 

Second up - one way or another, your partner has some responsibility in this - she's either helped run up the debt, or hasn't helped by being aware of how much you're spending - does she have an income? Expensive habits? Again, be honest with yourself. I find it hard to imagine that a partner who loves you would just quit on you - it isn't an uncommon situation to be in debt.

 

Third up - you're earning around £100k per annum, and presumably your house is bought (mortgaged?) - you need to be taking steps to make sure that's as safe as possible - or perhaps put on the market for a cheaper property......

 

Is there anything I can do initially to delay the collection process or should I just start by trying to get them to accept reduced payments?

 

Delaying dealing with this won't help you. There are letter templates on here which will allow you to make contact with all your creditors, and ask them to consider your cirumstances. Right now, most of them will want to get *something* from you, rather than nothing.

 

Have you requested copies of your credit reference files yet? If not do so right away just to be sure you know exactly what your creditors already do.

 

You need to look at the possibility of claiming back any charges and interest you can from some of these accounts - this may, ultimately reduce some of these debts, and in any case, may put further charges on hold.

 

The other thing you need to do fast, is open a new "parachute" bank account - withOUT an overdraft, and have your salary paid into that, along with direct debits, or SOs for all your essential outgoings - e.g. council tax, mortgage, energy, and whatever it takes to keep the roof over your head.

 

I would SERIOUSLY be looking at closing ALL of these accounts, getting the balances frozen, and then challenged before anything else.

 

Worst of all this is the need to travel with my job and claim the expenses back. Getting overseas with no money and no credit card is major problem as the card I was managing to keep going has, following a payment of £6k, reduced my limit to just a few pounds above the outstanding balance of £175.00. Have seen a pre payment credit card but as always they take a cut on every transaction. If my employer finds out about this situation then I will no doubt get fired!

 

Unless you are in some very specific employment, your employer CANNOT fire you for being in debt - that is discriminatory, and probably against the law, in most cases.

 

Your employer CANNOT force you to meet expenses out of your own pocket and then claim them back as part of your job conditions - your job, unless specifically agreed - is NOT to fund your employer's business, which is what that is.

 

How long are you expected to sit out expenses once you've paid them? Does your employer have an HR rep you can talk to in confidence?

 

Any guidance from you guys would be so very much appreciated on where to start or the best strategy.

 

No expert, but honestly - talk to your partner, then to your employer, and get a stop put on ALL of those accounts right away (and the balances frozen if you can). And put a plan together that reduces as many non essential outgoings as possible....

 

Can anyone beat me on this figure because if they can perhaps I will feel a little better! Not sure I will sleep any better tonight but at least I have faced the music. As to how did this happen? Well perhaps a story for another time which involves the death of a child and trying to buy happiness again.

 

My friend, you will find oodles of help here - if I can chance an honest comment - have you (and your partner) sought any form of counselling for this bit? Sounds like it might help.......for yours and your partner's (and children's) sakes.......

 

You've made a good start - now you need to keep talking (don't feel on your own) and start doing something positive about it.......

 

I'm sure from my own experience so far, that you'll find a LOT of help here.

 

Good Luck....

 

Thanks

 

Virgin (MBNA) 4,826

Next 500

Nationwide 3,415

Mint (Royal Bank of Scotland) 2,641

Marbles 977

 

Lloyds TSB Credit Card 13,475

Lloyds TSB Loan 1,577

Lloyds TSB Overdraft 6,006

Lloyds TSB Overdraft 982

Lloyds TSB Overdraft 188

 

John Lewis 422

Halifax 9,725

Egg Money Account 8,842

Egg Loan 3,011

Egg Credit Card 8,486

Cahoot Flexible Loan 7,545

Cahoot Credit Card 539

 

Total £73,157

[DuffNCustard]

About 20 months ago I got a wake up call - Cahoot jacked up the interest they were charging on their flexible loans - it was the straw that broke this particular camels back. I totted up the total amount of money I owed and reeled - it was £93k. Then I called the CCCS - found their details on the BBC web site. It was perhaps the most productive phone call I have ever made, when I put the receiver down I knew how I was going to get myself out of the mess. The CCCS sent me a pack - including template letters, that I used to contact my creditors and in January 2007 my debt management plan was up and running.

 

My net pay is similar to yours and my total debt is now just under £69k - I'll be clear in about another 3 years. My creditors have all accepted the DMP and with the exception of MBNA have frozen all interest. Egg and Cahoot were the most co-operative, Northern Rock were initially the most challenging but after about 8 months accepted my plan.

 

My other half knew that I owed a lot of money but not the amount, I think that over the years he despaired over my carelessness with money but he certainly enjoyed the life too - I put our 2 boys through private schools and whilst we do not have a flash executive house its a roomy old pre-war semi in a very nice part of town.

 

I would really recommend that you contact Payplan, CCCS or National Debtline - I of course prefer CCCS. Not once have I been judged - which did surprise me, these people deal with facts - they are what they are. They will give you that bit of 'moral' that gets you over the first hurdle. Then you can put a plan together, with a plan in place you'll be taking control again, it feels good.

 

I too travel extensively by the way, sometimes I'm away for 12 weeks at a stretch, I have an Amex Corporate card - its a debit card but I can withdraw as much cash as I need on it. All business expenses are reimbursed through our expense accounting and so long as I keep up to speed with reporting them I am always able to pay the account in full each month