Advice please, can no longer pay

[chrismk]

Hi all

 

Mine and my wifes financial situation has changed over the last few months, work hours have been cut and we are now in a situation where not everything can be paid.

 

My salary has near enough stayed the same but my wifes, being self employed has taken a dive. So now my salary covers all the household expenses and day to day costs.

 

Unfortunately there isnt enough money left to pay my debts. I have a personal loan with nationwide, a credit card with nationwide and a barclaycard. Also a small overdraft with nationwide. I cant pay any of these this month or for the foreseable future.

 

I bank with nationwide so to protect myself i have started using an account elsewhere, my question though is how to proceed? Should i wait for them to contact me or call and tell them I cant pay. Im preparing myself for the onslaught of endless telephone calls from them.

 

Thank you in advance for any advice

[rennuz]

Had a similar situation myself a few years ago, £70k and am almost now debt free. You can set up a payment plan with them yourself or use somebody like CCCS and they will agree an amount with you based on affordability and issue amounts out to all your creditors. This is all assuming you do not see a light at the end of the tunnel in the near future.

 

I had a cc with Nationwide, CCCS managed to stop the interest charges with them and then within 6mths I got a bit of money together and paid the a partial settlement of 25% of the outstanding balance ( if you can do this get letters confirming anything you do for records). Believe me its the best thing I ever did, fair enough I cant get credit at the moment but then hey ho I save up for things. I had 7 creditors and nationwide and barclaycard were 2 of them, I didnt get a default with either of them so just set up an affordable amount, even £1 a month if thats all you can afford but do something that way you are making an effort. Doing nothing will lead to all the phone calls but then dealing with someone like the CCCS or setting up a payment plan yourself will stop all calls. Barclays were the worst with me and set up a default straight away. Good luck

[chrismk]

Hi thanks for the comment and help, Its nice to know others are in a similar situation and even better to know this site is here to offer support and advice.

 

All of payments are due within the next 5-10 days so I think I will just wait for them to contact me, then I will write explaining the situation and offer what I can afford.

 

Can anyone offer some thoughts as to what is likely to happen?

[silverfox1961]

Hi

In my opinion, it's always better to be up front with your creditors. It shows that you are not ignoring your liabilities.

 

If you want to do this yourself, there are some template letters HERE to help with your negotiations.

You could check out CCCS

http://www.cccs.co.uk/

or payplan

http://www.payplan.com/

to see if they can help

 

It could also be useful to give national debtline a call

 

http://www.nationaldebtline.co.uk/

 

Remember that when you work out your income and expenditure, that you allow yourself spare cash for emergencies and to have a life

[Guest]

chris

and note that under the Lending Code for eg (which all these bankers subscribe to) ......they 'should consider reducing or stopping interest and charges when a customer evidences that they are in financial difficulties. Such reduction/suspension decision should be based upon an income and expenditure statement indicating that they are unable to make repayments sufficient to meet contractual terms. Where a customer is able to make only token payments, their debt should not increase as a result of interest and charges levied. The assessment should reflect the customer’s lack of ability to pay rather than the stage an account has reached in the arrears cycle or whether they are using free sources of debt advice. Where a firm declines to allow concessions, they should be prepared to explain why to the customer or their adviser if requested to do so.'

 

[chrismk]

Hi All

 

Thanks for all the advice and help so far. I have now started to get letters about missed payments etc. The debts I can no longer pay are all now around 1 week overdue. I intend now to write to them all explaining my situation. I dont however no what to put. Should I at this stage just let them know I cant pay and ask there advice or should I make a token payment offer. Any advice on the best way to proceed is very much appreciated, I am getting text messages, phone calls etc inviting me to call them butt would rather do it all in writing.

[Guest]

depends how you want to deal with matters?

when were the accounts taken out?

if you want to check the agreements, then could do a cca request for each account. see what they come back with. then post back. in the meantime make token payments.

or, could also inform them of your financial difficulties. in which case they must under the lending code be 'sympathetic' and act accordingly such as freezing/reducing interest perhaps with a repayment plan.

also request any communication in writing only. they should comply with this under the lending code.

you may be defaulted soon, so bear that in mind. in which case it may go to debt collection agencies. and there may be a default(s) on your credit files.

depending on your circumstances, consider some poss options for dealing with debts. for eg see here http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

also, have a read around cag including the blogs.

imo

Edited October 18, 2011 by Ford
typo

[silverfox1961]

Have a look in the library (top left) to give you some ideas of what to put in your letters.

[chrismk]

Thanks for the replies so far. I think at this stage I will just write back to them explaining that I can no longer afford the repayments and see what they suggest. Is it worth at this stage sending a breakdown of my expenditure, or should I wait untill they ask for it?

 

Im not expecting them to play ball if im honest!! but I just cant pay it so will send a letter and see what they come back with. When they respond should I start a thread in the relevant sections. i.e Nationwide and Barclaycard or just continue this one.

[silverfox1961]

It is better to start a separate thread for each debt thereby getting more tailored help from people who have dealt with the relevant creditor.

 

When you write back, ask them if they will accept reduced payments and to stop all interest and charges.

[Guest]

.....Is it worth at this stage sending a breakdown of my expenditure, or should I wait untill they ask for it?

 

........

 

up to you.

according to their lending code they would require some evidence of financial difficulty for them to consider freezing interest etc. this could be seen from recent payment history on the account. or, notification. such as a template budget sheet from for eg the CAB (available online). or could just do your own. or just do a letter. if they kick up, remind them of the code. note that, according to the code, token payments would justify a freeze of interest. etc

imo