dont know what to do :(

[donnaam]

I have got myself in a situation I cannot see any way out of.

 

My income dropped by about 40 about a year ago and since then I have been struggling to maintain my credit commitments.

 

I often have to pay credit with credit but they are all approaching their limits and I don't know what to do.

 

My current amount owing is approx.:

11,000 Barclaycard credit card

4,000 Barclaycard (was egg)

8,000 MBNA

4000 Next

4000 Very

1200 Argos

 

As you can see this problem is extremely serious and I was actually shocked when I sat down and worked out exactly how much I owe.

 

I have recently been getting treatment for anxiety/depression and while this is pre existing my situation is certainly not helping.

 

I cant sleep at night thinking I will loose my home (owned but in negative equity due to house price drop)

 

If I pay my mortgage/ council tax/ fuel bills ect I am left with around £200 per month to pay almost £1000 in minimum payments which is why the credit cards have got so high so quickly.

 

If I contact everyone with an offer are they likely to accept?

 

There is a PPI claim outstanding on the BC (was egg) and this has been with FOS since August 2011

 

I am so grateful for any advice anyone can give

[donnaam]

40% drop

[Martin Willmott]

Simple, IVA, check it out, it would seem to be the best and only way of sorting this without going bankrupt. IVA you will keep your home.

[donnaam]

so are IVA and bankruptcy my only options? That is what I was afraid of. I was hoping it would be possible to negotiate with my creditors a payment plan to pay them direct. Is this not a possibility

[renegadeimp]

Actually, im betting if you obtain full statements of all those accounts, youll find a ton of unlawful charges and/or PPI/insurance. All of which can be reclaimed.

 

Also, if you are going to pay them back normally, then they have to agree by repayments you can afford. Even if they took it to court, a court officer would laugh at their futile attempts to get more money out of you when its clear you cant afford more than youve stated.

 

 

Regarding IVA's http://www.adviceguide.org.uk/england/debt_e/debt_help_with_debt_e/individual_voluntary_arrangements_ivas.htm#when_is_an_iva_a_good_option

[citizenB]

No those are not your only options.

 

You should look to either doing a DMP (Debt Management Plan) with either one of the Free debt counselling charities such as PayPlan or CCCS (they now call themselves something different).

 

You could speak to National Debtline who would help you produce an income and expenditure sheet.

 

Or you could Self manage your own DMP - This coud be quite stressful in the initial stages, but many people have successully done it themselves.

 

First of all you do need to be absolutely ruthless and brutally honest about your spending - complete the attached Budget sheet and see what disposable money you have once all your PRIORITY debts are paid.

 

Mortgage/Rent - Utilities - television licence - Council tax - food - home/life insurance.

 

Anthing else.. credit cards/catalogues unsecured loans would then get a proportional share of what ever is left. The larger the balance o/s the large percentage of your disposable income they will receive.

 

You need to write to all your creditors and advise them that you are struggling financially and would they please accept £x amount for say 12 months whilst you play catch up. You should also ask them if they would freeze interest and not add default charges during this period. There is little point in entering a reduced payment plan only to see the debt continue to rise !!

 

There are draft letters in the CAG library that you can use - suitably amended to your situation.

 

Can you expand a little more on the debts you mention.

 

When was each account opened. Have you already defaulted on payments. Have you had many default charges added to the accounts.

 

Is there any Payment Protection Insurance on any of these accounts ?

[donnaam]

I don't think there will be any charges as I have never missed payments in over 5 years (mainly because I would use credit to pay credit)

 

Do they have to agree to payments?

 

Now that Ive decided to face this I have nothing to hide by going to court as I can prove what I have coming in and priority secured debts I have to pay.

 

What I am terrified of if getting one of the Demands that mean they can make you bankrupt.

 

Is this unlikely if I contact them and prove I am willing to pay as much as I can possibly afford?

[donnaam]

Most accounts have been opened for about 5 years and there are no missed payments on them as yet

but as I have almost reached the limits I am running out of options to repay.

 

There is PPI on the 4000 BC that was egg as it was taken out in 2001 with a pre ticked box

but this was refused and has been with FOS for about 16 months now, still not been assessed.

 

I worked out using a prorate calculator I could afford approx. 68 to the main Barclaycard

and the rest reduced in relation to the amount outstanding.

 

From previous experience is this likely to be accepted.

 

Is there anyway they can make me bankrupt without giving me an option to pay as much as I can possibly afford?

[citizenB]

You are a long way off receiving a demand.

 

yes, you do have to agree with the creditor to enter into a payment arrangement with them. You are going to be asking them to reduce your monthly payment and freeze/halt the interest payment so you are paying only the capital borrowed.

 

They may or may not accept - what should happen if they have any plans to litigate is to wait until you default - then send you a couple of letters demanding you either telephone them or pay up. Do not telephone - especially if you are going to be stressed. Aside from which you are now going to want to keep a paper trail.

 

They are then required to send you a default notice (this is not the same as adding a default marker on your credit files). This is a mandatory notice required by law - they must advise you that you are in arrears (if you are) that you need to repay these by a certain date - 14 clear days with an allowance for them sending you the notice.

 

You woud then need to not pay this - when they would likely send you a termination notice - letter before action and then consider litigation.

 

They could sell your debt on to a 3rd party. The same process remains before they can consider litigation. However DCAs can be pretty unpleasant. They will send you threatening letters or make many telephone calls but they are still required to follow the rules before litigating.

 

If you act swiftly with your budget sheet and firm offer of an amount you can pay then there is every chance that they will accept your reduced offer, freeze the interest and you can relax a bit.

 

Ellens Budget Sheet.xls

[donnaam]

Thank you so much for all the advice so far. It is gratefully appreciated

[citizenB]

You might want to chase up your PPI claim with the FOS - confirm that you are in financial hardship and you are being pressed for payment !

 

The OFT guidelines and the Banks own Lending code say that all offers of repayment should be considered. I cant say whether or not your offer will be acceptable. However, if you make the offer and it is refused then any attempt to litigate will be frowned on by the court.

 

Yes, there are one or two companies who are using the Insolvency rules as a Debt Collection tools, but, you have made an offer, not refusing to pay. It is likely there would be good reason to set aside any such demand.

 

Until you have made your offer and been rejectected, I dont think you should stress yourself speculating on what "might" happen.

[renegadeimp]

I would agree with CitizenB.

 

You need to take a deep breath and sort out your expenditure.

 

Only then can you have a full and frank outlook on your finances.

 

While it may seem you have a lot of debt, it's actually not that much compared to a LOT of people we have seen on here.

 

Once you work out a full budget sheet, you can then sit down, work out what you can afford to pay your creditors,

and we can help you with specific letters to ask them to consider repayment plans.

 

We can also help with Penalty fee's/late payment charges/PPI etc.

[dx100uk]

you are in good hands

 

however, you REALLY need to TAKE CONTROL

 

of you finances not let THEM DO IT.

 

TELL [dont ask] them they are only going to get £xxPCM for xx mts

as a goodwill gesture

and as a reciprocal GOGW they must freeze int & refrain from levying PENALTY charges.

if they wont

drop them to £1PCM for life.

.

as an example>

.

I am currently in financial difficulties and not able to meet my normal monthly repayments.

to show my goodwill, i am going to pay £5 for 6 mts.

 

i will update you in 6mts time or before, should my situation change.

.

could you please as a reciprocal goodwill guesture,

.

refrain from levying any penalty charges & freeze the interest on my account.?

.

Should you fail to assist me during a period of financial difficulty, contrary to all the guidelines and codes

issued by the relevent bodies and authorities that govern you and the way you conduct yourselves.

.

i shall have no alternative but to reduce my offer to £1PCM for the rest of the life of the account,

.

.

as your actions would do nothing to help me.

.

i thank you for your time.

..

.

dx

.

then pay by your internet banking site

.

and get reclaiming

.

TAKE CONTROL

.

or

if you have sent the above and they refuse

then write back........

.

.

i'm sorry, but you have failed to assist me during a period of financial difficulty, against all the guidelines and codes

issued by the relevent bodies and authorities that govern you and the way you conduct yourselves.

i repeat again, the contents of my letter dated dd/mm/yyyy, for want of clarification:

to show my goodwill, i am going to pay £XX for XX mts

could you please as a reciprocal goodwill guesture, refraining from levying any penalty charges & freeze the interest on my account.

i will update you in 6mts time or before, should my situation chance.

should you fail to help by refraining from levying unlawful PENALTY charges & freeze my interest,

i shall have no alternative but to reduce my offer to £1PCM for the rest of the life of the account,

as your actions are doing nothing to help me.

This is contrary to the rules you should operate under.

disgruntled account holder

dx

[Let Them Knock]

I have got myself in a situation I cannot see any way out of.

Many people are where you find yourself. Step back and realise that you have tried a 'solution' that did not work. Put that idea behind you now and follow the advise on here to use a different solution. There IS a way out.

My income dropped by about 40 about a year ago and since then I have been struggling to maintain my credit commitments.

I often have to pay credit with credit but they are all approaching their limits and I don't know what to do. As I said, it has not worked (never does) so time to go forward.

My current amount owing is approx.:

11,000 Barclaycard credit card

4,000 Barclaycard (was egg)

8,000 MBNA

4000 Next

4000 Very

1200 Argos

Sound awful like that, doesn't it? There are many people on here who started of in a worse situation and are now in a much improved one.

As you can see this problem is extremely serious and I was actually shocked when I sat down and worked out exactly how much I owe.

I have recently been getting treatment for anxiety/depression and while this is pre existing my situation is certainly not helping. The legislation is on your side here. There are additional OFT guidelines for people in this medical situation.

I cant sleep at night thinking I will loose my home (owned but in negative equity due to house price drop). Most unlikely if you follow advice here.

If I pay my mortgage/ council tax/ fuel bills ect I am left with around £200 per month to pay almost £1000 in minimum payments which is why the credit cards have got so high so quickly.

If I contact everyone with an offer are they likely to accept?

There is a PPI claim outstanding on the BC (was egg) and this has been with FOS since August 2011 As advised, chase it up and explain you are in a hardship situation.

I am so grateful for any advice anyone can give

 

First and foremost, no debt is worth making yourself ill over. There are many people out there with life threatening illnesses that would gladly swap positions with you.

 

There is light at the end of the tunnel and there is life-after-debt. Keep your chin up, things are already getting better now you have accepted the current situation and come here seeking advice. Remember, you are not alone, many of us are in similar situations.

 

It will come right for you. Good luck.

[donnaam]

Thank you so much for all your help and advice. I feel better knowing there are kind people like yourselves who are willing to help me. Using a pro rata calculator I found online I have worked out if I pay £200 per month to all debt (the maximum I can afford) it would mean I would offer

 

Barclaycard 68

MBNA 54

Egg 25

Next 25

Very 25

Argos 8

 

At least they will hopefully see I am trying to be fair with what I have and hopefully realise that if this is refused by them then hopefully a court would also allow me to pay at this rate

 

Should I therefore cancel my direct debits as I send this letter or do I have to wait until this is accepted before I can do this?

 

Thankyou so much again

[dx100uk]

you dont have to ge them to accept

 

you TELL THEM.

 

IMHO £200 is too much

 

and the cats companies can be dropped to £5 PCM too.

 

dx

[citizenB]

You should indeed cancel your direct debits and set up standing order payments. If you have online banking, that should be reasonably easy to do. When you write to the companies with your offers - you should point out that the DD will be cancelled - if there are different accounts for Standing Orders, will they please let you know.

 

You must tell your Bank to cancel the DDs.

[donnaam]

Good afternoon

 

I am looking for some further advice.

 

I sent a budget sheet to all creditors as advised and offered an amount to them pro rate.

 

I have only received two replies.

 

One from very stating the will freeze interest and accept reduced payment for 3 months and

 

one from MBNA saying thankyou for informing them of my financial difficulties.

 

They have closed the account and I have to cut up card etc.

 

It then says I will need to make sure I maintain minimum payments as interest and charges will still be added

 

so they have obviously totally disregarded my letter and budget planner.

 

What should I send them now?

 

Many thanks again

[renegadeimp]

Ask MBNA if they understand english?

[dx100uk]

i'd start a new thread on this one in the MBNA forum

 

i think we need to dig deeper

 

like SAR them.

 

dx

[Martin Willmott]

Really a lot depends on who you are dealing with, some will just play hard ball and take you to court, some will take a more sensible attitude, none want to to go bankrupt because they wont get paid.

 

You need to approach each one seperately, make an offer to pay only what you can afford, if one refuses and insists on taking legal action this could force you into bankruptcy in which case you include the lot and get them all written off.

 

If you have assets ie a house etc, your best bet is to go for an IVA agreement, you will probably need some legal help, much of the debt can be written off as your creditors would rather get something than nothing, the rest you pay off at a sensible rate, this also freezes any interest, whichever route you take it will affect your credit rating.

 

an IVA is a legally binding agreement, as far as your creditors are concerned it's damage limitation, as far as you're concerned it's light at the end of the tunnel without losing your home, Good luck