Please help-Need to clear/sort out debt before uni. In September?

Question

Hello all So, I accumulated this debt during a bad time in 2005 and since January 2006, I have been paying off £400 a month, through PayPlan a legit debt managment company that doesnt charge me. I have 6 creditors and used to have a debt of £11k!Thing is Im going to uni. in September to be a Student Child Nurse and the bursary is approx. £584 a month, not including rent, so I will have about £5 a month to spare for each creditor for 3 years! Im sure most of the creditors will not accept this and close my account and demand the full amounts, so is there something else I can do to sort this out. ie; an IVA etcAny help appreciated.Thanks.

Answer 1

First thing to do is to talk to the creditors and explain the situation. They'll probably tell you that you have to pay a set amount regardless of whether you can afford it or not. This is simply not the case, they are quoting company policy NOT the law. Tell them you are willing to draw up a budget plan showing all your monthly incomings and outgoings to prove that you can't afford to continue as things are, and include an offer to pay whatever you can afford each month. Do this and send it to them (keep a copy for yourself). Contact them to make sure they receive it and ask them if it is acceptable. I am quite sure they have to accept by law. Make sure you keep a record of every phone call, the names of the persons you speak to and a copy of all letters you send in case they try and threaten you with court action/repossesion.
I also strongly advise talking to your local citizens advice bureau, they have a lot of very good information on handling debt and are free.
If worst comes to the worst and you find yourself in court, keeping records of everything shows that you are trying your best to repay the debt, which will work strongly in your favour.

Answer 2

Well, you have a couple of options.

One option is to try to consolidate all 6 creditors into one loan with one monthly payment. The interest rate will probably be higher, but paying a little more in interest is better than ruining your credit history by defaulting on debts.

Another option is to pay a hair over the minimum amounts due on all the debts except the one with the lowest balance. Pay as much as you possibly can on the smallest debt. Once you get that one paid off, move the amount you were paying on it to the next smallest amount. Keep doing this until all the debts are paid.

The second way takes more time, so you might be best off with the first one. Or, if one or two of the debts are small enough to get paid off by September then work on those while consolidating the rest.

Best of luck!

Answer 3

Payplan might not charge a fee, but as it is owned and operated by the lenders themselves, they do put more pressure on your to maximise your payments.
Independent debt management companies require a minimum payment of £100 per month, some more.
So it looks like you debt management can't help you.

For an IVA you need to owe about £15,000 and be able to afford £200 minimum towards your debts, so that's no good for you either.

I would call the CCCS for advice specific to your circumstances as your creditors may try to bankrupt you.

Answer 4

It does seem like a small amount and obviously with those sort of figures it would seem to you that the debt is never getting cleared. However, If you contact your creditorsm or get PayPlan to do it for you, and explain the situation and what amounts you will be able to offer them then you'll probably find that they're willing to help - so long as you keep making small regular payments. Some may try and force your hand by trying to get you to agree to pay more but just be firm, yet fair, and state that the amount you're intending to pay is the maximum amount you can afford.
If you also say that you may be seeking part-time work (in which case extra payments may be forwarded to them) then as I say, you'll be surprised how helpful some of these firms can be. The last thing they want - and you for that matter - is to declare yourself bankrupt.

Good luck

Answer 5

Most creditors will accept a minimum of £5 per month, anything less than that and they will likely try and redeem their money through the courts. But, a court can award them as little as £1 a month, as long as you show that's all you can afford, else they will likely bankrupt you.

Have a look at these two sites. CCCS is a debt payment plan company, probably like you are with now, they come highly recommended. And the other gives you loads of tips on saving money on day to day expenses.

http://www.cccs.co.uk/
http://www.moneysavingexpert.com/

Hope this helps you.

Answer 6

400 a month for a debt of 11k is a bit much, u will have to contact your debt company and tell them your plans and ask them to renegotiate on your behalf, or you can approach your creditors yourself and ask, if they are unwilling to help you can file for bankruptcy which will affect your future credit worthiness, but entering into a debt repayment programme does that anyway...dont just stop paying, give them an opportunity to respond to you, keep all letters you send them and also any correspondence they send you, as you will need them to prove to a judge(should you be called to court) that you were willing to pay.. it will stand you in good stead and show your creditors in a bad light

Answer 7

If you speak to your creditors direct, most will accept any form of payment no matter how small. They cant get bailiffs on you or anything as long as you are keeping up regular payments. And if what you are saying is true about your compulsary outgoings every months, then they cant get blood from a stone can they? You can only give them what you have.

I

Answer 8

get in touch with your debt management company and tell them of your change in circumstances and see what they can do for you, if they cant help ask for help at your local c.a.b