Looking for tips re personal debt

Discussion in 'Insolvency' started by JAR85, Dec 12, 2019.

  1. JAR85

    JAR85 UKBF Contributor Free Member

    31 1
    Dear all

    This isn’t strictly business related, but it’s business-caused (plus my own stupidity which I’ll leave aside for the purposes of this post)

    I had to close our business. I used our credit cards prior to closure to finance operations. It has left me with card debt I won’t get back.

    I’m struggling now to meet minimum payments. I’ve been paying what I can as often as I can.

    I’m aware my credit score is falling with each missed payment.

    Is it best to contact companies in this situation. I did speak to one who said they’d now hold further action. I made an offer of repayment.

    - On the whole is it better to do this - contact them and more or less break the contract and admit being unable to pay
    - or is it best to try to keep making payments and keep the account ‘live’ as it were?

    I did think to try to at least pay one card in full and on time? Maybe that would help?

    Thanks in advance, very much.
     
    Posted: Dec 12, 2019 By: JAR85 Member since: Mar 23, 2018
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    22,762 2,737
    Have a look at a charity called Stepchange. You don't have to use them, they do have some useful info though.
    They can help you work out a budget and you can then offer each card company a payment based on what is affordable.
    Your priority debts come first - mortgage, council tax etc.
    Non priority debts like credit cards - if what you can afford is £5 per month each then so be it. Or whatever amount.
    Credit rating doesn't mean anything unless you decide to go for more credit. Pay this lot off first. So it takes longer than expected - you can also get them to freeze interest and penalties. Saving you a fortune in the long run.
     
    Posted: Dec 12, 2019 By: Mr D Member since: Feb 12, 2017
    #2
  3. JAR85

    JAR85 UKBF Contributor Free Member

    31 1
    Thanks - I really appreciate that. So, really, ignore the score at this point.

    I suppose I was looking for the best way forward to least affect it. It seems like just contacting them is probably best.
     
    Posted: Dec 12, 2019 By: JAR85 Member since: Mar 23, 2018
    #3
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,515 445
    Stepchange is a good recommendation

    https://www.stepchange.org/

    You need to explore personal insolvency options to include:
    • negotiate direct and try to freeze the interest and pay minimum payments to the creditors whilst you get a plan in place
    • See if you can settle any of the debts with a full and final offer
    • enter a debt management plan
    • consider a debt relief order
    • consider bankruptcy
    • consider an Individual Voluntary Arrangement
     
    Posted: Dec 13, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #4
  5. ethical PR

    ethical PR UKBF Legend Free Member

    7,241 1,584
    The other area to look at is reviewing your outgoings and get rid if non essentials such as holidays, gym membership, expensive cars.

    And get a second job.

    This will help uou both reduce upur outgoings and the job will enable you to increase your payments
     
    Posted: Dec 13, 2019 By: ethical PR Member since: Apr 19, 2009
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    22,762 2,737
    One thing people often appear to miss cutting is their mobile phone.

    Can a couple cope with a single mobile between them and without all the whistles of the latest phone? Basic phone on pay monthly contract - £10 to £15 a month?


    Another aspect is insurance - ramping up the excess can reduce the payments. Not as if going to claim on small issues anyway.
     
    Posted: Dec 13, 2019 By: Mr D Member since: Feb 12, 2017
    #6
  7. Scott-Copywriter

    Scott-Copywriter UKBF Legend Full Member - Verified Business

    9,761 2,681
    Try the Money Saving Expert forums. Plenty of people on there seek and give advice regarding personal debts.

    As for your situation specifically, what's best for you depends on the amount of debt and other factors at play. An IVA, for example, could be suitable or could be overkill depending on the amount owed. Debt consolidation may also be worth considering, but that depends on the amount owed and the interest rates you're currently paying.

    StepChange might be the best place to start. This is exactly what they're there for.
     
    Posted: Dec 13, 2019 By: Scott-Copywriter Member since: May 10, 2006
    #7
  8. MBE2017

    MBE2017 UKBF Ace Free Member

    1,787 611
    Regarding credit card debts, they are treated differently legally in court depending on when you took out the cards. Old accounts you can ask for a copy of the original agreement etc, often this cannot be provided. This might allow you to argue yourself out of the debt.

    With newer cards the companies can generate an agreement from computer records, so that generally suffices any court regarding proof of debt. Don’t expect Stepchange to advise you on these matters, but there are some decent forums with good, and some awful advice.

    Assuming you do not dispute the amount, charges etc, then the advice to try someone like Stepchange, or negotiating yourself is a good start. What I would not advise is to simply ignore the problem, do everything in snail mail recorded delivery and always refer to any debt as the alleged debt until you are happy the amounts are correct, often they are not. Do not make telephone calls if at all possible, demand everything is in writing.

    I have helped several people out regarding credit card debts, some companies make anything up.
     
    Posted: Dec 13, 2019 By: MBE2017 Member since: Feb 16, 2017
    #8