Dealing with creditors

[2muchdebt]

First time poster - I am a 39 year old in full time employment and have recently had to confront all of my personal debt which has been built up over a number of years and which I am unable to keep meeting all of the agreed monthly payments on. I am also dealing with the underlying reason for the build up of this debt. Total debt is 70k divided between a number of loans and credit cards. My net income a month is app. 5k and my wife also works but we have a high mortgage and childcare costs.

I have completed an Income Expenditure financial statement and have sent this along with a letter to each of my creditors offering a reduced payment. I have about 1,275 a month after my share of mortgage and household running costs to go towards servicing and paying down personal debt. Have more or less allocated this pro rata between each creditor in terms of calculating an offer of payment per month. This means loans which were close to being paid taking a bigger reduction in terms of monthly payment than ones which were taken out later.

I had a couple of questions which I would appreciate any thoughts on:
- three of the loans were with GE and HFC. Total amount of loans when taken out between 3-5 years ago was about 45k and I had these paid down to about 10k. My monthly payments have been 1125 but I have been falling into arrears recently and can just not afford these payments. I have offered 250 per month to them and have said that I am committed to clearing full debt but will need a longer period. How likely are they to accept this ? I am hoping the fact that I have paid them down a lot from will count in my favour.
- the biggest loan is with BOI for 35k taken out last year as a restructure of other loans and cc debt. Monthly payment was 720 and I have offered 500 per month. Again are they likely to accept ?
Thks

 

[number7]

I dont think they will accept just because you have offered. they will now recognise that they are in competition with other lenders for a slice of the reduced pie and as such the more pressure they put on in negotiations the more they will get from you at the expense of the other lenders.

I would tell each lender who contacts you that the other lenders agreements are already agreed and that the amount you have allocated to them is now the final amount available.

You will need to be tough and face down threats of court action, credit rating black marks etc. but if they do call your bluff and bring you to court they will be unlikely to be awarded much more than you have offered if it is genuinely as much as you can pay and you have dealt with the lenders fairly.

If you are carrying luxury items in your statement of means expect the judge to be hard on you.