Credit card help. Now unable to pay minimum payments.

[IFRS86]

Hello all,

 

After browsing the web and YouTube looking for answers I found this platform and have spent the last couple of days or so getting my head around it. Firstly, a thanks. I was worried sick and it was having an impact on my day to life. I know I have an issue, but through reading lots of posts I feel better and more positive about it all. 
 

So my issue is simply I now can’t afford the minimum payments on my credit cards. I was someone who listened to Martin Lewis a lot and shifted debt around on 0% cards. Ultimately I still spent and the top and bottom of it is all offers have ended and 0% interest seems a long way away. I utilised a COVID bread on some of the cards which painted over the cracks really. 
 

All of the below cards are still with the creditors. There is only 1 as it stands that may be defaulted and this is detailed.

• Tesco credit card. Balance £1438. Letter received on 7/1 stating my account was suspended. A day or 2 before I had sent payment of arrears and payment which I thought would put my account back on track. I rang up when I got the letter panicking asking what the next steps were. The fella said he would send an income and expenditure sheet to work out what I could pay etc and seemed fairly relaxed about it. He then stated to me he would freeze the account for 30 days. I received a letter yesterday dated 13/1 stating they accept my request for breathing space (I didn’t request it, unsure if this matters). On my credit report it actually shows as in arrears but on the banking app it shows that it isn’t, my payment was received and that another statement was produced on 11/1. So unsure what’s what in honesty with that account
• Virgin credit card. Balance £8129 (£405 in arrears) 
• M&S credit card. Balance £4633 (£334 in arrears)
• Halifax credit card. Balance £3989 (£105 in arrears) 
• Barclaycard credit card. Balance £3278 (£188 in arrears)
• HSBC credit card. Balance £1121 and up to date. 

 

My finances haven’t changed, I was spending around £175 a month with the various 0% rates etc. I can still afford that. I only missed a payment from October 2020, until then I had never missed a single payment. All cards are within the last 6 years except the Barclaycard one which was originally opened in 2005. 
 

I was seriously considering looking in to an IVA but having read posts I know it isn’t something you guys recommend. My next thought was looking at the pro rata letters and sending them to creditors. 
 

Any help and feedback would be very much appreciated, and thank you for taking the time to read this long post. 

 

[dx100uk]

all are still with and the people you are or should be paying..is the Original Creditor?

 

[IFRS86]

Hi dx100uk. 
 

Yes all still with original creditor. 
 

I just don’t know which is the best way to deal with the matters. 

 

 

[Peterbard]

Hi IFR

Many people have been in your position so try not to let it play on your mind. It can be sorted in a variety of ways, dependant on the outcome you want.

 

An IVA is seldom in your best interests  especially if you own your own property

 

You 0% cards will eventually come out of their initial period and you will stuck with interest on them also. So now is the time to develop a plan

 

If you want the creditors to stop pestering you immediately you could start a debt management plan, we can help with that There are several downsides to this  and although I used to advise this whole heartedly,   recent developments now make the idea less attractive.

 

Chances are you will end up with a trashed credit rating for six years whatever you do.  Is this a big problem for you?

 

 

 

 

 

 

[IFRS86]

Hello Peterbard.

 

Thanks for the reply mate.

 

My 0% rates have ended on all the cards and that's why I am now unable to pay the minimum payments. I have been careless and irresponsible and it has caught up with me. 

 

I am in no way looking for a way to avoid not paying anything. I am Happy to work with the creditors or whoever it may be and get a positive resolution. 

 

As for the credit rating as it stands I have missed 7 payments since October over the 6 cards. It isn't great as it stands. I am a home owner with a mortgage and that will be up for renewal in a few year so that will be the biggest thing in relation to that. We are on a fixed rate as it stands and would be looking to move on to another fixed. 

 

Mortgage of around 130k and property around 160k. 

 

Thanks again 

[IFRS86]

I think I just need to know what options are out there and how they work with pro's and cons. 

[fkofilee]

Whats the MP for each card?

Lets see what we can do for you.

[dx100uk]

1 hour ago, IFRS86 said:

Hi dx100uk. 
 

Yes all still with original creditor. 
 

I just don’t know which is the best way to deal with the matters. 

 

 

pro rata letters.

 

 

[IFRS86]

Hello Fkofilee 

 

Minimum payments without taking arrears in to account 

 

Tesco £50

Virgin £200

M&S £115

Halifax £53

Barclaycard £100

HSBC £60 

 

As it stands I could probably stretch to £200 in payments. 

 

Pro rata the sensible approach? 

 

 

[fkofilee]

PRP will set you up for defaults if not an agreed amount and the OC doesnt agree to the Repayment Plan. 

Its up to you what you want to do ...

 

1. Let all accounts default as from now on in your Credit File will be screwed for 6 + Years. 

2. PRP to each - On the advisory that they freeze interest and charges etc. 

 

Please tell me you have cut up all the cards?  (Not critical - I forget to mention that part) haha

 

[IFRS86]

Sorry to be thick here but PRP? Is that the term for pro rata? OC original creditor I presume? 

 

My instinct tells me to not let the accounts default, so option 2 would be the best bet. In my position, would you be going down the pro rata route? 

 

Haha  all CC are cut up yes!! 

 

Thanks

[fkofilee]

PRP - Pro Rata Payments.

OC - Original Creditor. 

 

I would go down PRP but doing PRP might default the accounts anyway so its difficult to say.

And Youll get through this! Take every day one step at a time

Being in debit isnt a crime