Stopping living off credit... what to do?

[Jacky202]

Hi I'm a new member of the forum but have read through a number of posts over the past year or so which have really helped guide me to the point I'm at now. So thank you, first, to everyone who's helped me without knowing it! Even though I'm in a mess at this point, I'm at least now in a more informed mess!

 

I've honestly been living partly off credit for years - I'm only in my early thirties too. I've had months when I've been doing fine and able to earn enough to cover my debts but then things take a turn for the worse and I end up living off credit again. I'm self-employed, and sometimes work dries up. Currently though I'm in diastraits because I'm changing my career from one self-employed profession to another self-employed profession. And in the meantime my old work is drying up, and I'm not able to get my new work off the ground quick enough. I was also ill at the beginning of the year and couldn't work for a month, and then my two pets were seriously ill and that's cost hundreds in vet bills...

 

So my 1st question is:

 

1) Is my self-employed status going to work against me in my coming communication with the banks? Because won't they see that it's up to me to get enough work in to pay my bills? And the career change is my decision too (though this is hopefully a move to earn more money eventually!) It's not like I've been made redundant from my job as an employee or something though... So where do I stand?

 

OK, moving on to specifics...

 

I have just sent out letters to all of my (five) credit card companies requesting a copy of my credit agreement and statement of account. So I'm waiting to hear back on these. However, in the meantime I have no money to pay my minimum payments! I have done a personal budget - so looked at all my incoming and outgoing. On a good month I might break even, or just be £50 down... On a very bad month I can be as much as £700 down! I have defaulted on payments and am getting lots of phonecalls, texts and letters saying so. No one is *yet* threatening to take further action, just saying they will if I don't pay soon. My accumulated debt is about £7,000.

 

I have not replied to any of this contact from the credit card companies, I have only sent out the credit agreement requests. I'm too scared to phone them, and half the time I can't remember my passwords so just get frustrated and end up hanging up! I would prefer to contact them by letter, and then there's a paper trail all the way too.

 

My 2nd question is:

 

2) Should I contact each of these credit card companies and say that my circumstances have changed and that I cannot afford to meet the minimum payments. I've read letter templates for doing this, where you either offer a token £1/month or say I can't afford anything. I've also read letter templates asking them to put the account on hold and freeze all interest. Part of me thinks I should do this, but I'm worried that if I send a flurry of letters out like this it will cause confusion with the credit card companies because I've just sent out the credit agreement requests. Is this true? Or is it OK to have these two threads of communication going along with them simultaneously? I read that if the credit companies haven't replied to my credit agreement request within 14 days then I don't have to meet their payments anyway - is this really true though? Or is it irresponsible of me to just wait until those 14 days are up and see who responds to my letter of request?

 

Next issue: I have a business account and business credit card (separate to the above mentioned credit cards). The credit card has a £500 limit on it, and every month the balance is taken out of my business account. Over the past months I've got into a cycle where this £500 would cover my rent at home. Some months ago I started to not have enough money in my business account to cover this £500 when it would be taken out for my card payments. This was an unauthorised overdraft, but they let me just do this with barely any interest - they'd let me know it was unauthorised, but not force action. Over each month I'd scrabble my way back to zero on my business account, then be hit with the credit card balance and start over again. As months went on I'd end up with £200-£300 that I couldn't cover from the credit card balance. So I'd have up to £800 unauthorised debt, then scrabble to pay back some of it in time for next month.

 

Currently I have £466 unauthorised debt and I knew this couldn't continue and that I'd have to stop using the credit card somehow. But now the business bank has taken action for me. They've sent me a letter telling me they've cancelled my credit card and I need to send it back to them immediately or they'll come and fetch it! Very wise too - I thought! So I will send this back on Monday and hopefully that will keep them happy for now. They do want to know how I intend to pay off the unauthorised overdraft though - and right now I can't.

 

So question 3...

3) Should I send a letter to this business account manager with the return of my business credit card saying that my circumstances have changed and I am having financial difficulty. Could they please hold the overdraft at this point and freeze interest while I improve my financial situation. Then I will contact them re when I can start to repay it? Is this OK to do, or is it different because it's a business account? It's only £466 debt, but I know they will continue to ask for it if I just ignore them! Because it's a bank account is there risk of bankruptcy, or is this ridiculous because it's only hundreds, not thousands?

 

I also don't have any money to live off at the moment - at all I have just paid my rent for this month (on time) and am worried how I will afford next month's rent. I am starting to save what small earnings I have to pay for next month's rent but I can see me just meeting it but not having anything left to pay for food, vet bills (my two pets have been very ill recently), car expenses, or mobile phone bill across the next month. The car and the phone I need for work. My boyfriend (who I live with) thankfully pays the house bills (as I pay rent).

 

This is highly stressful but I'm *really* trying to keep it together. My boyfriend is very concerned about my financial situation and I'm extremely embarassed about it. If it becomes too stressful for me to cope with then he gets extremely stressed and we spiral into relationship issues. I've spent years and years in financial debt but I'm finally trying to do something about it. But I'm really up against the wall here, so any help will be so very much appreciated!

 

Thank you! (And sorry for the very long post!)

[deathbycrayons]

I think communication is the key in your situation. I'm no expert. But if I were in your shoes, I would stop paying all card bills - you need to have money to eat and pay your bills, and to buy food.

 

I think you should await the CCA's from your creditors, and with regards to the overdraft and the bank, you need to claim back any charges they've applied. This way they can't persue you for the debt if the account is in dispute and you're really struggling to pay.

 

Do write to the bank explaining your financial situation and enclose an income and expenditure statement.

 

Do you have pet insurance?

[Jacky202]

Hi deathbycrayons (great name!)

 

Thank you for replying so quickly

 

I think communication is the key in your situation.

That's what my gut feeling is, but just don't know if I should confuse issues with the personal credit card companies by communicating with them about not having money to pay card bills when I'm awaiting the CCAs? What do you reckon?

 

I'm no expert. But if I were in your shoes, I would stop paying all card bills - you need to have money to eat and pay your bills, and to buy food.

This was my plan after reading info online. The only trouble is, I don't have money for food etc because I need to find money for rent for in a month's time. And now my fallback business credit card has been cancelled - which needed to happen, I know - I'm £500 extra screwed... My old work that I'm still dragging along is invoice based only - so I do the work then have to wait up to 6 weeks for payment. So working myself silly with this right now (if there were work around) helps in the future but not immediately. I'm not on any benefits and don't think I'm eligible for any - I've looked. The only one that I might be eligible for is something because I struggle to work a full day like a 'normal' person. I generally can only manage part-time hours in my old/current work without ending up ill (partly the reason for my career change in case this helps). This might be something along the lines of Chronic Fatigue or something - which I was diagnosed with in the past. But I wouldn't class myself in this category now because I've changed my life to manage. But I couldn't work a 9-5, so maybe I am eligible?? Trouble is my local GPs are *useless* so I generally don't bother talking to them. Sorry - that's a tangent...

 

I think you should await the CCA's from your creditors

So don't contact them re not being able to meet payments right now? Just wait and see if they respond to my CCA request? Or do both.

 

and with regards to the overdraft and the bank, you need to claim back any charges they've applied. This way they can't persue you for the debt if the account is in dispute and you're really struggling to pay.

Yes I get this. The only thing is that I've only had two charges from them, and they were last month (I think for £25 each). They've been *very* good to be honest! They were for bounced payments, but until last month they'd just let direct debits go through even though my overdraft was unauthorised. So can I still write to them and ask for money back on these charges? They might agree as it'd be such a small amount, and in that case it wouldn't hold them off for long.

 

Do write to the bank explaining your financial situation and enclose an income and expenditure statement.

Will do thanks!

 

Do you have pet insurance?

No, but good point to mention Unfortunately with one animal it wasn't worth putting her on pet insurance because she had problems at a young age which would rule out insurance on any further similar conditions (the cause of her current illness). The other pet I could have put on insurance before, but didn't want to deal with a monthly direct debit going out of my account (as I've been having trouble for years). If I had had him on insurance all this time then what I'd paid over the years would have just covered his recent surgery, but now he's in the same boat as my other pet - with a longterm issue that the insurance won't cover in future. So I don't think I can pursue this at the moment.

 

Thank you so much for your suggestions. Your help's much appreciated!

[deathbycrayons]

I have M.E. (chronic fatigue syndrome) and can no longer work at all. I too was self employed.

[deathbycrayons]

Hi deathbycrayons (great name!)

 

Thank you for replying so quickly

 

 

That's what my gut feeling is, but just don't know if I should confuse issues with the personal credit card companies by communicating with them about not having money to pay card bills when I'm awaiting the CCAs? What do you reckon?

 

 

This was my plan after reading info online. The only trouble is, I don't have money for food etc because I need to find money for rent for in a month's time. And now my fallback business credit card has been cancelled - which needed to happen, I know - I'm £500 extra screwed... My old work that I'm still dragging along is invoice based only - so I do the work then have to wait up to 6 weeks for payment. So working myself silly with this right now (if there were work around) helps in the future but not immediately. I'm not on any benefits and don't think I'm eligible for any - I've looked. The only one that I might be eligible for is something because I struggle to work a full day like a 'normal' person. I generally can only manage part-time hours in my old/current work without ending up ill (partly the reason for my career change in case this helps). This might be something along the lines of Chronic Fatigue or something - which I was diagnosed with in the past. But I wouldn't class myself in this category now because I've changed my life to manage. But I couldn't work a 9-5, so maybe I am eligible?? Trouble is my local GPs are *useless* so I generally don't bother talking to them. Sorry - that's a tangent...

 

 

So don't contact them re not being able to meet payments right now? Just wait and see if they respond to my CCA request? Or do both.

 

 

Yes I get this. The only thing is that I've only had two charges from them, and they were last month (I think for £25 each). They've been *very* good to be honest! They were for bounced payments, but until last month they'd just let direct debits go through even though my overdraft was unauthorised. So can I still write to them and ask for money back on these charges? They might agree as it'd be such a small amount, and in that case it wouldn't hold them off for long.

 

 

Will do thanks!

 

 

No, but good point to mention Unfortunately with one animal it wasn't worth putting her on pet insurance because she had problems at a young age which would rule out insurance on any further similar conditions (the cause of her current illness). The other pet I could have put on insurance before, but didn't want to deal with a monthly direct debit going out of my account (as I've been having trouble for years). If I had had him on insurance all this time then what I'd paid over the years would have just covered his recent surgery, but now he's in the same boat as my other pet - with a longterm issue that the insurance won't cover in future. So I don't think I can pursue this at the moment.

 

Thank you so much for your suggestions. Your help's much appreciated!

 

OK, I think with regards to your credit cards, sit back and await a CCA. If you hear nothing within the prescribed timeframe (14 days) then you need do nothing.

 

Write to the bank and explain your situation, enclose an inc&exp and offer of payment. Even if it's only £1 a month.

 

You can claim back any charges, your claim will probably be put on hold untill the test case is over though.

[deathbycrayons]

I tend to go off on tangents too.... You MAY be able to claim DLA if you consider yourself to have a dibilitating illness. CFS most definately is in my case. It might be worth contacting your local CAB and asking them to help you make a claim, as the forms are really complicated. It would help to get your GP on side too as they will be asked to provide a report about your health.

[Jacky202]

OK, I think with regards to your credit cards, sit back and await a CCA. If you hear nothing within the prescribed timeframe (14 days) then you need do nothing.

 

Write to the bank and explain your situation, enclose an inc&exp and offer of payment. Even if it's only £1 a month.

 

You can claim back any charges, your claim will probably be put on hold untill the test case is over though.

 

Thank you so much for this advice. I will follow it to the letter (literally lol)!

 

Sorry to hear about your ME! I'm pretty sure this is what my mother has too, and she can't work at the moment - can barely function, up to her ears in debt But I won't go on about that coz that's most definitely a tangent!

[Jacky202]

I tend to go off on tangents too.... You MAY be able to claim DLA if you consider yourself to have a dibilitating illness. CFS most definately is in my case. It might be worth contacting your local CAB and asking them to help you make a claim, as the forms are really complicated. It would help to get your GP on side too as they will be asked to provide a report about your health.

 

Thank you for this advice too! Do the CAB charge for helping with claims advice and form filling? I've not approached them before.

 

Lol... where would I start with getting a GP on side :-| Really, I've tried everyone at the practice over recent years and not one is understanding - it's all because I refuse to take anti-depressants. I'm not depressed and I don't believe pills are the answer in my case. So then they don't want to know because I'm not taking their advice. So I don't know whether I could get anyone's support to help me with a claim.

 

Hope this isn't too off-topic - it is related to my financial situation...

[AA99]

When you've read up on here the procedure to follow with each creditor/bank, open your own thread within each one and you will get sound advice, step by step! Don't speak to anybody about your woes on the phone unless they're recorded, put everything in writing and insist they do too. Don't be bullied or threatened in any way if you've pleaded poverty and offered a reduced payment plan/no interest no charges/ CCA request. If it's not received back in time, they can't enforce it in court;)

[Jacky202]

Hi AA99,

 

Thank you for your advice too! It is reassuring to hear I'm along the right tracks.

 

When you've read up on here the procedure to follow with each creditor/bank

Sorry if this is a dumb question, but where do I find the procedure to follow or do you just mean general reading on here? I've read a fair bit on here and on National Debtline – Free, Confidential Debt Advice – Call 0808 808 4000 about what to do re contacting them about requesting credit agreements, doing a personal budget, contacting creditors about holding debts, freezing interest, and know how to reclaim bank charges (as did this and won with Lloyds a year ago - woohoo!). Have I missed anything? Or is this what you meant? Thank you

 

open your own thread within each one and you will get sound advice, step by step!

Would I open a thread on each bank/creditor in this part of the forum? Sorry as a newbie I'm still finding my way around the structure of the forum. Should I wait until I hear something back from one of these creditors re the credit agreement before I start these threads?

Thanks for this advice too though. It's a relief to have support.

 

Don't speak to anybody about your woes on the phone unless they're recorded, put everything in writing and insist they do too. Don't be bullied or threatened in any way if you've pleaded poverty and offered a reduced payment plan/no interest no charges/ CCA request. If it's not received back in time, they can't enforce it in court;)

 

Thanks again! This makes me feel so much better

[gill5blue]

Hi

I would suggest

1)Write to the credit card companies and request the 'Consumer Credit Agreement'-look at the templates available on this site-and do not be embarrassed, start a new thread here for each credit card, ask questions.

 

2)The credit card companies pre 2006 agreements(possibly you need to check this date), thay are mostly 'unenforceable' and they only have 14days to respond. So after 14 days you are legally allowed not to pay them, you need to again write to them-use the templates provided and tell them the account is in 'dispute'.

 

3) Then deal with the rest of your life, keep updating your threads, always respond to creditors letters, read a lot more threads on this site-we are mostly ordinary people who got sucked in by credit card Co's chucking money and encouraging debt at us. Have a read of some of my threads if you like

good luck

Gill5blue

[deathbycrayons]

The CAB do not charge, they're a free service for local citizens and you'll find them in your phone book. It might take a while to get an appointment as I think they can be quite busy.

 

There is a forum on this site specifically for benefits so you may be able to get help from there too.

 

With regards to your GP I'm afraid some are just stuck in their ways and with things like M.E. and won't listen. You may need to change practices. Have you had a look online for information on M.E/CFS? There are some great organisations and support groups out there and maybe if you contact them they might be able to advise you further.

 

Also, I've had M.E. for 7 years, I am told now that I will never recover, and I have seen many specialists and many doctors, but it took years to finally get a firm diagnosis. I'm getting the right help now, and the right benefits. If you need any advice or support, send me a private message

[Jacky202]

Many thanks Gill5blue! It's encouraging seeing your cases listed in your signature where you've won

 

1)Write to the credit card companies and request the 'Consumer Credit Agreement'-look at the templates available on this site-and do not be embarrassed, start a new thread here for each credit card, ask questions.

Thanks I've already sent off the credit agreement requests, just a few days ago. I used the template here too - so thank you to CAG for that! I'm finding it easier to talk about my financial problems than at home because everyone's been there - and I don't have to worry about worrying you all like I do with my boyfriend or friends/family! I'm still embarrassed, but it's easier knowing that it's not *totally* my fault I'm in this mess - i.e. really I shouldn't have been given so much credit and so easily. And people just don't teach you about how to manage your finances - or the perils of getting into debt.

I will start new threads here then for my credit cards and post updates when I have them.

 

2)The credit card companies pre 2006 agreements(possibly you need to check this date), thay are mostly 'unenforceable' and they only have 14days to respond. So after 14 days you are legally allowed not to pay them, you need to again write to them-use the templates provided and tell them the account is in 'dispute'.

I need to check this date - thank you.

I read that you can't do the credit agreement request for post-2007? Is that true?

Also, I read somewhere that this credit agreement validation thing doesn't count if I've agreed to the credit card online? Is that true? This could affect me, if so.

Thanks for the advice re what to do if they don't respond in 14 days

 

Have a read of some of my threads if you like

Thank you! Will do

[Jacky202]

Thank you so much deathbycrayons! That's very kind of you - I might take you up on the PM offer

 

I'll have a look at the benefits forum too - didn't know that existed Will look at CAB and also more about ME/CFS. I've not looked into it much because I've focused on changing my life to suit my circumstances and just getting on with things. I looked into other health issues I had which might be a symptom of CFS and sorted those out, but I still can't seem to manage as much as 'normal' people so I think this is worth checking out.

 

Thanks!

[blueda]

Hi Jacky202, to add to the advice you have been given, you could reduce your outgoings by changing utility companies such as Gas, electricity, phone etc to the cheapest suppliers, you can get the list of companys and there charges on sites, such as the one ran by Martin Lewis, or confused.com. The time the creditors are allowed to get back to you regarding CCA request is 12+2 working days Excluding bank holidays and weekends.

[Jacky202]

Hi Jacky202, to add to the advice you have been given, you could reduce your outgoings by changing utility companies such as Gas, electricity, phone etc to the cheapest suppliers, you can get the list of companys and there charges on sites, such as the one ran by Martin Lewis, or confused.com. The time the creditors are allowed to get back to you regarding CCA request is 12+2 working days Excluding bank holidays and weekends.

Thank you so much Blueda Actually I'm lucky here in that my boyfriend pays for all the utilities! I pay the rent, he pays the rest But thank you because this is excellent advice.

 

Thanks for the confirmation re CCA requests - I had forgotten about bank hols and weekends!

[blueda]

You can save money on the comparison sites on home insurence, car insurence. As for the pets you may be able to join the peoples dispensery for sick animals( PDSA ).

[Jacky202]

You can save money on the comparison sites on home insurence, car insurence. As for the pets you may be able to join the peoples dispensery for sick animals( PDSA ).

Thank you More great ideas!

[tendogs]

Hi Jacky, we meet again.

 

I have, somewhere, a crib sheet for filling in a DLA claim form for anxiety, depression and other psychological presentations. I'll try and dig it out and post it up for you in the next day or two then you can edit, copy and paste and fill in a form on line. They will contact your GP so it's worth going to see them but if you lose and have to go to appeal we can sort that for you as well. Never lost one

Edited April 25, 2009 by tendogs
not enough ppppppppppppps

[tendogs]

now I am off to bed

[Jacky202]

Hi Jacky, we meet again.

 

I have, somewhere, a crib sheet for filling in a DLA claim form for anxiety, depression and other psychological presentations. I'll try and dig it out and post it up for you in the next day or two then you can edit, copy and paste and fill in a form on line. They will contact your GP so it's worth going to see them but if you lose and have to go to appeal we can sort that for you as well. Never lost one

Oh wow that's fab, tendogs! Thank you so much I didn't know that anxiety could be something that could lead me to being able to claim benefit! I mean, I know how much it affects my life, but didn't realise it was that recognised!

I'll be very interested to see the crib sheet you have, thanks!

[Jacky202]

now I am off to bed

LOL sleep well and thank you for your advice.

[Jacky202]

Hi all. Just thought I'd update you.

 

I have today made progress with my business account and credit card, following advice received here. I returned the credit card (cut into two! They didn't ask for this but I felt it was necessary!) and a letter, using a template from National Debtline – Free, Confidential Debt Advice – Call 0808 808 4000, requesting that they hold my overdraft and freeze interest and fines on the account for six months. I have offered to pay £1 a month in the meantime towards my overdraft. I explained my circumstances and enclosed a personal budget sheet in two parts. The first shows my past month's incomings and outgoings and the second was a recent average month's incomings and outgoings. I split this into two because this month I had to pay £500 in vet bills and only earnt £280 So felt I needed to show an average month by example (where I was still down £300!). So, progress I hope they accept this.

 

Re my other credit cards, we're on day 4 (not inc weekend) of the 14 days allowed for a reply about the credit agreements. Still early days!

 

Also, I have got a spare bank account up and running now where I am putting my incomings. This is a safe place as there are no direct debits and I don't have a credit card with this bank It's a relief to have this so I can take back control.

 

I will start new threads on my other credit cards once I have something to report.

 

Thank you all for your advice so far. It helps my state of mind to know there are other people here.

[Jacky202]

Sorry, I wasn't expecting that link to come up like that! Looks like an ad now! Here's the link without ad look: www. nationaldebtline. co. uk (just remove spaces).

[deathbycrayons]

Excellent. I bet you feel so releived. Did you send the letters all recorded?