Debt Management Advice

[gregpicard]

I'm currently working abroad teaching English for a year after University. While here, I was also working as a marketing consultant for a UK company back home, and they were paying me around £800 a month. However, last month they cut my salary significantly to just over £300 a month. So i'm in a bit of a pickle now. I have various creditors, including 3 payday loans which were due to be paid at the end of July, and now are overdue with interest accruing daily.

 

I currently have 8 creditors to pay:

 

Payday loans: Quickquid (£450) Wonga (£450) Paydayuk (£450)

Credit Card: Capital One (£250)

Phone Contract: O2 (£150)

Bank Overdraft: Clydesdale Bank (£350 - currently in Default and missed previous payment plan)

Utility: British Gas (£350, currently paying £35 monthly in payment plan)

 

Total owed is around £2500. Normally, this wouldn't really be a huge issue as with my original wage, I could afford to pay them off after a couple of months. However, with my income now at around £400, after deducting rent and expenses I only have about £50 to cover my debts...

 

Due to my missed payment history and the default with Clydesdale, plus the recent non-payment of the payday loans, my credit rating is seriously damaged and I'm unable to secure any sort of loan to help consolidate this debt. Also, my family have their own financial issues at the moment so I cannot borrow from them.

 

What is my best option in these circumstances?

 

Since I already have a Default registered on my credit rating, I'm most likely going to be screwed for getting any decent loan / credit for 6 years anyway. Is it worth trying to have my debt partially written off through some agreement, if my credit rating is already in a dire state?

 

Any help would be great

 

Thanks

[64doogz]

I'm currently working abroad teaching English for a year after University. While here, I was also working as a marketing consultant for a UK company back home, and they were paying me around £800 a month. However, last month they cut my salary significantly to just over £300 a month. So i'm in a bit of a pickle now. I have various creditors, including 3 payday loans which were due to be paid at the end of July, and now are overdue with interest accruing daily.

 

I currently have 8 creditors to pay:

 

Payday loans: Quickquid (£450) Wonga (£450) Paydayuk (£450)

Credit Card: Capital One (£250)

Phone Contract: O2 (£150)

Bank Overdraft: Clydesdale Bank (£350 - currently in Default and missed previous payment plan)

Utility: British Gas (£350, currently paying £35 monthly in payment plan)

 

Total owed is around £2500. Normally, this wouldn't really be a huge issue as with my original wage, I could afford to pay them off after a couple of months. However, with my income now at around £400, after deducting rent and expenses I only have about £50 to cover my debts...

 

Due to my missed payment history and the default with Clydesdale, plus the recent non-payment of the payday loans, my credit rating is seriously damaged and I'm unable to secure any sort of loan to help consolidate this debt. Also, my family have their own financial issues at the moment so I cannot borrow from them.

 

What is my best option in these circumstances?

 

Since I already have a Default registered on my credit rating, I'm most likely going to be screwed for getting any decent loan / credit for 6 years anyway. Is it worth trying to have my debt partially written off through some agreement, if my credit rating is already in a dire state?

 

Any help would be great

 

Thanks

. Go to your local citizen advice beauru they will do an income and expenditure form and deal with your creditors,this is free of charge and they give the best advice,good luck.

[sequenci]

. Go to your local citizen advice beauru they will do an income and expenditure form and deal with your creditors,this is free of charge and they give the best advice,good luck.

 

It's not possible for the OP. In the very first sentence they point out that they are living overseas.

 

One default is very likely to have a big impact on your credit file for sure. You've two potential options, though. The first is to negotiate reduced payments on an informal basis - this is usually achieved by completing a financial statement and making affordable offers of payment.

 

Your second option could potentially be a Debt Relief Order: http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=37_debt_relief_orders

[gregpicard]

. Go to your local citizen advice beauru they will do an income and expenditure form and deal with your creditors,this is free of charge and they give the best advice,good luck.

 

Thanks for the reply 64doogz. The problem with that being: I'm working in South America as a teacher at the moment on a 1 year contract. I won't be able to get any face to face help over here! Just over the phone at best to sort everything out.

[gregpicard]

It's not possible for the OP. In the very first sentence they point out that they are living overseas.

 

One default is very likely to have a big impact on your credit file for sure. You've two potential options, though. The first is to negotiate reduced payments on an informal basis - this is usually achieved by completing a financial statement and making affordable offers of payment.

 

Your second option could potentially be a Debt Relief Order: http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=37_debt_relief_orders

 

Thanks for the response sequenci. I should point out that i'm of Scottish nationality and therefore that wouldn't apply to me? Thanks

[sequenci]

Thanks for the response sequenci. I should point out that i'm of Scottish nationality and therefore that wouldn't apply to me? Thanks

 

It wouldn't sadly. That said in Scotland Bankruptcy is far cheaper than it is down here:

 

http://www.nationaldebtline.co.uk/scotland/factsheet.php?page=01_bankruptcy

 

What's useful is that in Scotland they've done away for the need for you to attend a court hearing too.

 

You could have a go at going through this, it's pretty useful! http://www.mymoneysteps.org

[gregpicard]

Do you think that bankruptcy is really the best option for me sequenci? Or is it more sensible for me to try and see if my creditors will accept token payments of a couple of quid, for a couple of months, until i'm back in the UK and earning a decent amount again? I'd say within 4-5 months i'll be back on a wage of 1k or more a month.

 

I spoke to payplan and they're going to arrange a call to go over my finances etc, and try arrange a plan with my creditors. Like I said before, I can probably set aside £50 a month at most to repay them all. Regarding the payday loans, have to give decent kudos to Wonga as they immediately froze my interest for 30 days to allow me time to give them an income expenditure sheet etc. Quickquid and Paydayexpress, not so kind. I'm also trying to open a couple of basic bank accounts, before my credit report really gets messy.

 

Since my credit is already at its lowest point and with the default, pretty much barred from getting any credit until that is discharged...what should I do?

 

What are the repercussions of my different options:

 

Declaring bankruptcy and wiping all debt

Trying to arrange a partial debt write-off with my creditors

Arranging payment plans to repay all of my debt currently owed

 

If repaying all of my debt currently owed is still going to knacker my credit, then i'd rather come to an agreement with my creditors to write off most of the debt, pay a small amount for a couple of months, and then repay the remaining balance in full...is that possible?

 

Thanks again for your help.

[sequenci]

Given that we're dealing with payday loans you've probably two decent options here.

 

1) Bankruptcy

2) The Debt Arrangement Scheme (http://www.dasscotland.gov.uk/)

 

The latter is very useful as it's an arrangement which is binding on the creditors - which means that interest and charges are guaranteed to be frozen, and that your creditors will not be able to enforce any court orders against you whilst it's in operation. The important thing to do is to consider how long it'll take to become debt free. If you feel that you can clear it within a few years then bankruptcy *may* be quite a harsh mechanism to consider. It does, however, offer a massive amount of peace of mind - and for many of the people I've helped it allows them the ability to make a fresh start quickly. The DAS is great too as it's NOT a formal insolvency measure but it IS binding on the creditors. It's a bit of a win/win as far as paying a monthly payment to the creditors is concerned.

 

If you can raise a lump-sum then making offers of full & final settlement could be a useful route forward also.