Been reading through the forums about how to manage debt and one thing seems to remain constant in that you work out your income and outgoings and then make an offer to each of your creditors telling them what you are prepared to pay each month over xxx amount of time.

That's all well and good but what do you do when you have no income at all or so little income you can just about afford to pay your rent every month let alone anything else. What route do you go down with that one?

A little background:

My wife had a job in the city with a good salary and that plus my income meant we could pay everything on time and all was good.

My wife then became quite ill and could not work and has been like that for the last 6 months.

This left a whopping great £3k per month hole in the finances.

I managed to plug that for a few months but then my own work dried up and now I am struggling just to make the rent and feed us every month.

Right now, as of the time of writing this post we have absolutely zero money at all and huge pile of debts to pay...plus rent of course.

So given that situation,

how do we deal with creditors?

I have a CCJ by the way and have already missed the deadline for last months payment, by a couple of days.

I did write to Lowell to explain the situation but of course it's entirely at their discretion whether they enforce the court order or not.

My wife bank did give her three months reduced payment on her loan so she only had to pay £1 per month for those three months

however they also said they would not load interest on for that time

but they have so her debt has already increased by another £1000 and climbing!

Also that arrangement has come to an end and despite writing to them several times they have not come back to us (RBS).

So what do you do when you have zero finances and need to deal with creditors?

If you have no way to pay a creditor, you reduce it to a max of £1 a month, or ask them for a payment break of 3-6 months to get back on your feet.

Also, a DCA cant add anything to the debt. Also if a DCA owns the debt, then i would question why you are paying them at all without checking the enforceability of the debt.

We have been through the 'payment break' with RBS but that three month period when we were paying £1 per month has expired and now they are not responding.

We asked for an extension etc but all they have done so far was send a form to list outgoings and income.

That was completed and sent back over a month ago.

We have contacted them since then but heard nothing.

They have not tried to debit the normal monthly payment from the account but they are still adding interest at a rate of just over £200 per month!

There are no DCA's involved at the moment but I am sure it will come.

I have been reading the forum and saw there is a thing called a DMP? or something like that.

A Debt Management Plan which you draw up yourself...

I think there is a CAG template?

and in which you state you will pay £1 per month over x amount of months and then send it to your creditors.

Would that be an option for people in my situation who have no funds to pay everything?

yep take control

the letters are in the debt collection section of the library

thread tidied

dx

Thought I would update this thread on where we are at the moment.

Lowell have been pretty good so far although I received a letter from their Solicitors today "Notice Of Intention To Enforce" and whilst I understand they have a right to do this in accordance with the CCJ I don't see how it benefits anyone since we have nothing for them to stick a warrant of control on. I have sold everything we had to pay previous bills. Anyway I have written to them again explaining my current situation so will see where that goes.

My wife's bank, RBS have finally answered. They have frozen her accounts and asked her to find another bank. They have also accepted the token payment of £1 per month. We thought it would be hard for her to get another account but she got one straight away with Nationwide (Flex basic) so she has a no fee account plus debit card and all the usual facilities apart from overdraft, which of course we definitely don't want. So at least that worked out ok. Most of her other creditors have also accepted the £1 token payment arrangement, there is just one proving stubborn at the moment.

So really the main problems are now to do with my own debts. The one to Lowell which is the subject of the CCJ and amounts to £5189 and then we have council tax arrears of £600 and Gas/Electric arrears of £650

My thinking is now that if I can't sort out this Lowell thing that I might have to go for a DRO. Not ideal but I can't see any other way to sort this out. I "might" be able to get the money to pay it all off but that won't be for at least 6 months. I would much rather have a "settled" debt on my credit record than a DRO!

Anyway that's where we are right now.

Are you in communication with the council re the C/tax arrears ?

Same with Gas/Elec ?

Your rent is your priority along with the above...the rest simply have to wait.

Andy

I did explain my situation to the council a few months back but all they did was bundle the arrears into three payments of £300 per month. I manage to pay the January one but that leaves me behind for Feb/March and they have written saying I need t pay it within 10 days or recovery action would commence without further notice.

It's incredibly stressful constantly explaining to these people that I have NO MONEY. What don't they understand here? I'm not faking it or trying to blag my way out of paying what I owe, I simply have zero finances

Gas/Elec want me to either pay what I owe or they want to fit a meter. Only I can't have a meter fitted because this is a private rented apartment and they would need my landlords permission to do so, plus the meters are not inside the flat so that is another concern. The last thing I need is for my landlord to be approached about a pre payment meter being fitted!

I agree though that rent is the number one priority but at the same time I don't want bailiffs knocking on the door over that CCJ

I sometimes can't believe I have ended up in this situation.

Forget the CCJ ...they cant enforce it further...you rent a home you have no assets and I assume your self employed...so further enforcement is zero.

Keep in contact with the council if they farm it out the debt will double and you will never catch up.

If a pre payment meter has to be fitted so be it.......I cant see your Landlord objecting unless its a term of your tenancy agreement?

You cant get blood out of a stone...no matter how hard they pressure.