I have serious debt problems from overspending on credit cards, what happens if I speak to the creditors?

Question

do they freeze the debt, if not, what can they do?

Answer 1

If you meet the problem head on and talk to tjhem they will ask you to arrange a statement of account which details you spending and income. Most of them will allow you to have your interest suspended and the account suspended whilst youa rrange a repayment scheme - people like the CCCS and Payplan are brilliant but you can do it yourself too. Have a laook at www.moneysavingexpert.com where there is loads of advice on debt. I wish you well as i have been here - what ever you do, please dont go to a debt management company who will charge tyou for this servie - it can be done for nothing by companies who teh banks are happy to work with.

I did it the wrong way and didnt face up to it but now know that the banks are helpful and courteous.
Remember they cannot demand what you dont have.
Good luck

Answer 2

Some do freeze, some get really nasty.

But the trick is to play them at their own game. Cancel the direct debits and send each of them a written letter, keeping a copy for yourself. Your letter should list your income and outgoings leaving a sum for paying your debts, then list all your debts and the total you owe to each (scary I know but worth it) and assign a comfortable payment for each debt, even if it's below the minimum payment. Send this to each of the people you owe money to, but put at the end that you are withholding money until you get an agreement in writing from them on the payment scale you've worked out.

Hold out even if the letters come from a collection agency, just keep sending the original letter detailing your budget to these agencies until it goes high enough in the credit card company to someone who can make that decision, this may take many months. Just remember to keep writing saying you want to pay them but at a reduced rate and an understanding on interest until things improve.

I used this method over 12 months after I lost a high paid job and had to take a lower paid job and had to live to a restricted income. Nearly all played ball in the end and my stress levels have all gone leaving me free to concentrate on working abck to my previous pay status. I'm not out of the woods by a long chalk but at least I'm on an even keel.

Remember if it comes down to it, threaten to wait until it gets to a county court judgement as the magistrate will see your paperwork and budget and will make a ruling to set the payment at your rate and no further interest. Yes you will get some CCJ's following this route but if you credit card debt is that bad it won't matter about your credit rating being bad for the next 6 years as it will probably take that long to pay off.

Stay strong and fight back - once you've set your budget, stick to it and don't feel obliged to pay back more than you can afford otherwise you'll end up spending your food money and starve. Remember you're willing to pay but on your terms not theirs.

Answer 3

I echo "bevflower" on this one, avoid "debt management companies" like the plague. CCCs were fantastic with me and I was £37000 in debt. I found my creditors were actually more understanding with me because i went through the CCCS rather than friends who have been with debt management companies or had LVA's Good luck

Answer 4

Some creditors make arrangements with you, for example they may freeze your debt and no longer add any interest. They may ask you what amount you are able to afford to pay every month and you will pay this same amount till it's all paid off. However if you don't stick to those terms they may refer your account to the debt collectors.

Answer 5

I would recommend CCCS: phone [phone]. They will help. They help you to help yourself, and give you confidence to speak to your creditors. When you have a client number, speak to the creditors and the interest should freeze. Good luck.

Answer 6

The best thing to do is go and see the citizens advice bureau,they will do everything for you.They will speak to the creditors on your behalf,and will come to an agreement which you stick to,they are really good,they do everything to help.Good luck.

Answer 7

I would advice that you should reduce monthly expenses. Adjust the temperature in your house when you leave for the day to save on electric/gas. Carpool. Clip coupons. Sell items you don't use on craigslist. Remove extras from home phone and cable services.

Answer 8

I think the sooner you speak to them the better. They will try to come to some arrangement with you, perhaps easier monthly repayments etc.

Try to get them to agree to forgive you part of the loan. Tactfully point out that if they drive you to bankruptcy, they will get nothing.

Answer 9

There is help for you. The government understand this is a serious problem so have provided help for those who need it. Go to www.thedebtpeople.co.uk. They will advise you. Good luck.

Answer 10

if your behind in your payments & need help go to the salvos money care or life line they can speak to the creditors & help you with a payment plan with them it helps you if your worried to speak with your self cause some places can be very nasty to you!! do feel ashamed or embarrassed to ask them for help its a free service & they really can help you!!