My credit rating gets worse every month due to the ridiculous ammounts they want repaying
It isn't repayments that make credit ratings worse, each on time repayment normally produces an improvement. Are you making all payments on time every month? Are you doing new borrowing, perhaps rolling over some payday loans?
There are a wide range of possible solutions available and a starting point is to get:
1. Your income and day to day spending. the real income and spending you're doing, not an imaginary one. A couple of pints needs to be included so all of the real money in and out is known, else plans will be unrealistic and won't work.
2. A list of all of your debts and their interest rates and remaining terms until they are due to end. If a lump sum is due at the end, as for a payday loan, that needs to be part of the description as well because it has to be budgeted for.
Parts 1 and 2 are commonly called a statement of affairs.
3. A description of your credit report, showing every account and the payment history for each of the accounts, so it is possible to know the actual on time, late or missed payment or even default history for each of them. This will help to see what borrowing options might be available. also give details of any CCJs and whether you're on the electoral roll (a vital thing to be on to get decent credit).
It's not really possible to say anything specific without knowing that sort of information but depending on your situation revealed in those things there are a range of options that can be considered:
A. Maybe borrowing at cheaper rates. For example.
lenderscompared.org is a place that often has much lower interest rates than payday lenders charge and the lenders there expect people with bad or no credit. It is the site that doorstep lenders re required by law to particiapte in but others also list there. Expect APRs to be in the 200% a year plus range, much cheaper than typical payday lending.
B. Credit cards for those with impaired credit can sometimes offer either short term interest fre or balance transfer deals or just interest rates that are below those you may be paying now. If so, you'd spend o the card and use that money to reduce the balance on something else, normally the existing borrowing with the highest interest rate.
C. Payment arrangements. These are informal binding agreements with creditors to extend the term and change the interest rates on existing borrowing. The statement of affairs is a key tool that can show lenders that your current situation is not sustainable and that they need to come to some arrangement that is affordable. Where it is clearly completely unaffordable people have negotiated zero interest rates and extended terms but just extended terms at reduced rates or temporary suspensions of interest are more likely. for example, you might ask for a suspension of interest or payment holiday from the cheaper borrowers to allow you to use that money to pay of the mot expensive ones more rapidly, making your debt with the cheaper ones more affordable. that helps you and also them by reducing the risk that you will need an IVA. In the peer to peer world I know that Zopa has been willing to do things like cutting or suspending payments for a while to help clear more costly debt.
D. Insolvency:
Debt Relief Orders,
Individual Voluntary Arrangements and
bankruptcy.
Be sure that you understand
the potential for security clearances if you consider one of the three insolvency options, but any financial trouble including the others is an issue because it can make a person vulnerable to financial payments for information. Be 100% honest with any clearance-related questions and be sure that you are in touch with all of your creditors and looking to keep things on track - a stable and workable plan is what is needed to show that you are not vulnerable. even that may result in a temporary decline but only temporary if you have been honest, since the problems won't last forever but having lied does.
E. Free debt relief charities like
Stepchange . There is no need to pay anything for excellent and friendly help. Don't pay. Use the free charities like this one. Don't do any of the insolvency option without having talked with them and they can also be useful for getting help with arrangements. In addition there are lending industry standards that require lenders to stop chasing debts for at least a month when they are informed that someone is getting advice from them. This is to allow a plan to be sorted out and it can provide immediate relief of a sort from the stress of constant debt chasing calls.
If you want a good short term plan it's get together the information in items 1, 2 and 3 then give Stepchange a call. You can expect friendly good advice and help sorting things out from them. No need to be reluctant, their people have often been in major debt trouble themselves, so they know what it's like. If calls chasing debt are a problem, tell the callers that you're using Stepchange and ask them to suspend collection efforts while you sort out a plan, as they must.
Alternatively you can try posting the details of 1, 2 and 3 here and we can perhaps try to help, or there's the excellent
debt-free wannabe section over at MoneySavingExpert forum where you'll get loads of help, though the posters there will normally not consider cheaper borrowing solutions, even where they are a good move, so be aware of that limitation.
The best route depends on the details we don't have from items 1, 2 and 3 so we can't really say anything more specific at present. If things are in good shape cheaper borrowing might do the job, the harder the situation the more likely the route will be payment arrangements or DRO. For many of the possible plans a critical initial step is cutting out all non-essential spending for a few months to allow getting rid of the highest interest rate debts and get some breathing space. That can make a world of difference to your day to day finances.
Up to you which way to proceed but if you do choose to post more details here I'll be happy to take a look and see what options I think might do the job for you. Stepchange or one of the other charities is likely to be a good move but no harm at all in asking for help and support here over over in debt-free wannabe first or while doing it.
Main thing to know is that there's always a way out, it's just a case of picking the best one to get life on an easier track over time.
