www.iva.co.uk

I can't afford the minimum payment on one of my credit cards due to the company putting up my rate to 34.5%. They refuse to lower the rate and are insisting on me going on a payment plan with all my creditors, even though I'm able to pay them. They've accused me of not treating them fairly as I pay my other creditors and not them but they are the ones who increased my rate and minimum payments to an amount I can't afford. What are my options?

Hi Viki and welcome to the forum

That is indeed a very high interest rate to be managing. Take some advice from a reputable debt management company who can show a track record in working for consumers rather than creditors and can demonstrate their ability to stop interest and charges whilst you pay affordable payments to all of your credidtors on an even footing.

Welcome from me as well.

Melanie is giving you good advice. Visit www.iva.com for a list of reputable companies and reviews. Give one or two a ring and you will receive free and impartial advice as to all the options to you.

Can I ask if this is Virgin/ MBNA? A couple of us on here were put up to loan shark rates by them. Google a document called The Lending Code. It is a set of ethical guidelines most lenders have signed up to and it does now stipulate that interest rates shouldn't be raised in response to repayment difficulties. If that is what's happened to you, you could bargain with this nugget of info. FYI: I only know this exists because I worked in a bank. They are happy to sign up to these guidelines and continue to make "mistakes" as they don't publicise their commitments.

Hi Viki,

The creditor cannot force you into a payment plan but they are within their rights to want to have something done as you cannot afford the payment they require from you. If you have got to the stage where the money you have available does not cover all your monthly contractual payments, after your livings costs have been accounted for then you need to get something in place to sort all of your creditors out. To pay some in full and one not (even though they have made things worse for you) is not a fair way of dealing with your debts, this is not your fault but it is time to look at your debts as a whole as other creditors could follow suit.

As the others suggest, talk your situation through with 2 or 3 companies to understand your options and what the implications are. you will then get help to know what to do next for the best.

Regards,

You beat me to it BOL i was gonna ask if it was MBNA too.

Thanks for your comments - been helpful. Yes it is indeed MBNA, seems they have a reputation for doing this kind of thing! Have had a chat with two companies yesterday and looks like I will be going down the IVA route - a bit scary but it will draw a line under it and I'll be debt free in 5 years. It's just frustrating because it is only one creditor that has forced me to this (MBNA) [:(]

Viki, we're here for you with any questions and support you may need. It is scary but a huge weight will be lifted from your shoulders once you are accepted.

Hi, this sounds like a sensible route for you and congratulations on getting to grips with your situation so quickly. You'll feel a lot better once the IVA gets going! X

If you are having problems with MBNA which you feel are unfair, I'd be happy to try and intervene for you as I know their insolvency team very well. But they key is to ensuring that you continue to communicate with them at all times and keep them informed of the decisions you make along the way.

Viki, that's a great offer from Mel and I would certainly contact her to see if she can assist you.

Viki it was mbna that was the final straw for us too. I hadn't realised just how big the payment was going to be once the transfer balance period had ended. We managed to two months using a little bit we'd saved for our car taxes which of course meant no money to pay car tax...decided after talking to my sister that this was the route to go....and as I picked up the phone to make the first call, she got her certificate of completion proving it can be done.

good luck with your journey hun

Again thanks for your comments and especially your kind offer Melanie! Have had a lot to think about over the last few days but have decided on an IVA. I've been trying to get out of the debt cycle for nearly 10 years now and just going round in circles. I just want to draw a line under it all and make an effort to become debt free. Feels a bit scary but I know it will be worth it in the end!

You'll feel so much better when things are underway and you are back in control.

Best of luck with the process and keep us informed of how you get on along the way!

Regards,