It’s only been 18 months of me not paying the full amount. I did have a six month spell where I paid just 1% of the balance each month, but even this is a full 1.5% less than the minimum payment should have been, and even then they didn’t freeze interest and charges, they simply charged a reduced figure for interest.

So all this time, they have been pilling on the interest and charges until now, when they have finally taken their heads out of the sand and realised that I can’t afford my debts.

The letter states that they will pass the debt over to their Consumer Debt Recovery service, who will deal with it from now on. I’m guessing that within three months or so the consumer debt recovery dept will accept a full and final settlement on the debt, so I will keep this updated with what level of discount I get on the FFS.

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• Help With Credit Card Debt

If you have credit card debt that you can no longer afford, don’t panic, there are literally thousands of others in your situation. The worst thing you can do is to stick you head in the sand and hope that the problem will go away – it won’t!

Think about it rationally, the only way the problem will go away if you stick your head in the sand is if you suddenly come into a windfall and are able to pay off the debt in one go, or perhaps you may suddenly get a huge payrise at work? If both of these scenario’s sound a bit far fetched, that’s ok, they were supposed to! The reason being, to make YOU realise that YOU and only YOU can do something about your debt problems.

The first step is to take responsibility, they are your debts, so you need to do something about them if they are no longer affordable.

But what can you do about them?

If you can no longer afford to pay the minimum monthly payments on your debts, then you need to contact your creditors (lenders) and inform them of this situation. To do so, write each creditor a letter explaining why the debt is no longer affordable. Include with this letter a run-down of your household budget, showing that the total minimum payments on all of your debts exceeds the amount of disposable income you have left after all your other necessary monthly payments.

You should be able to come to an agreement with your creditors for at least six months, during which time they will freeze interest and charges, and accept a much reduced payment from you. This should give you time to figure out how you can reduce monthly costs or increase your income, such that you can start repaying your debts at the normal rate.

If after six months of paying a reduced amount each month you are still not able to revert to the normal minimum payment, then it would be advisable to speak to a professional debt management company about a longer term debt solution. This could be a long term debt management plan, with some form of plan to settle the debts at a later date, either through a full and final settlement or IVA.

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• Lloyds TSB Finally Accept My Financial Situation And Agree To Freeze Interest And Charges