💷Debt advice - Do you mind sharing if you have agreed a payment plan before and has it worked for you?

[Moneyworriesneedtogetagrip]

I would really appreciate some advice please. Please no judgement, it’s debt I’ve incurred through a failed business venture and I really want to pay this off as soon as I possibly can.

I have £18000 of debt across 5 credit cards and I have been largely paying off the minimums for some time because that is all I can afford. I’m now finding it is getting much more difficult to manage because before I was usually able to move over to a new 0% cards when an offer ended on one and juggle things that way. But now things have tightened up lending wise (which I fully understand). I can no longer move the balances around and the payments I am making are largely paying off quite high interest rates and not making a dent in the actual debt.

I phoned one of the credit card companies today and they advised they might be able to offer me a payment plan. I need to fill in a form with all my income and outgoings and they advised they can potentially put me on a payment plan for the long term which I understand would then freeze the interest. They said it can effect my credit rating which I assumed would be the case.

I was just wondering if any much wiser MNer’s than me have done this and if they could please share any advice? It sounds like a good option for me but I’m just wondering if it is too good to be true and if I’m missing something important. (Quite possibly knowing me!)

Thank you for taking the time to read my ramblings.

I did one through step change and my credit was bad for 6 years after but it did clear the debt quicker as the interest was frozen.

Thank you for your response sweetnessnfight that’s good to hear you cleared it.

I am currently on a DMP through StepChange. Like yourself, I got to the point where the minimum payments were doing nothing and my credit got to the point where I couldn't get anything new to move it over. It seemed easier to do it through them rather than to contact all the creditors myself. They did it all for me, and they also deal with any ongoing communication/issues.

I started with nearly £18k debt around a year ago and am now at just under £14k. My credit rating has gone down, but I'm paying it off much quicker than I would be if I was doing the minimum payments with interest still being added

Thanks for your reply Avelandra, it sounds like you have made great progress, I really appreciate you sharing your situation with me.

I contacted one of the credit card companies, gave them all my income and outgoing financial information and they offered a hardship plan. But when I fully understood what they were saying they said that minimum payments should be 2.5% and my new agreed monthly payment would be much less than this so I would immediately be classed as being in arrears. (Interest and any charges would be stopped during this time). If after 6 months I am in the same situation with not being able to pay the 2.5% minimum they would transfer my account balance to a debt collection company who would then take it on. This wasn’t what I had hoped for as I had naively thought they would keep my account and the plan would enable me to keep paying what I could afford until it was paid off.
So I’m mulling things over at the moment. I have been looking at the step change website and plan to contact them for some further advice.