Redundacy, benefits and debt

[Surfer01]

My wife and I live in a housing association one bedroom flat on a starter tenancy as we moved in only about 6 months ago. My wife is employed at present but her future is a bit uncertain although she is a long time employee nd unlikely that Bosch wil go insolvent. Her income as a factory worker plus my JS Allowance take us right onto the border line of whether we will get housing or council tax benefits.

On the 03/11/08 I was made redundant due to the company going insolvent. We have about £20K of debt but excluding £1550 o/d made up of about the same amount in charges with no arrears at present. O/d being paid off at £50 per month as court action stayed on recovering charges.

As the job market at present looks a bit bleak especially for one in their very late fifties, I am very concerned about our future and would like to avoid DCAs and bailiffs.

I have been to CAB but the earliest I can get an appointment to see a specialist on debt management is on the 25/11/08. All my payments or DDs are due out on the 1st of December. I will be cancelling a number of DDs to avoid any charges but will leave the council tax & utility DDs in place. Rent is paid in cash every Friday.

If we stay in the flat, we cannot afford to live and pay the bills as we will only have £8 left over each week. If I use my redundancy money when it eventually comes through from the government, it will not pay off very much and will not make difference to what we will be left with each week. If we sell the car, there will still be a deficit of £2000 owing.

We are considering moving into a caravan which we have on HP on a seasonal site and this will allow us to pay all the bills on a regular basis until they are paid up as no utility payments, no council tax and we get to keep the car as my wife needs it for work as ther is no public transport at 4:30 am. Between the utilities and council tax we spend over £250 per month.

An issue here is that we are deliberately making ourselves homeless and may never get another council / housing flat when the economy improves or I reach retirement age. Although we are not gypsies or travellers, we have lived in a caravan previously for 2 1/2 years with no issue.

We have to make a decision this weekend before we get into arrears and more debt. My biggest concern is the two credit card companies which tend to slap you with a £12 charge if you pay late. This also applies to some of the creditors which consist of a car loan (not HP or personal), a personal loan, HP for the caravan, Firstplus loan and another small store card loan. Then of course are two mobile phone contracts. We are in the process of challenging the Firstplus loan at present.

As we are at our wits end and extremely worried, any advice would be appreciated as we have no knowledge of Debt Management companies and what they can and can't do. Besides CAB we have been advised that CCCS is a good company to deal with concerning debt management but what do they actually do?

[creditcardmug]

Hi, surfer, you have my sympathies i have been in a similar position more than once.

 

First dont consider moving out of your home.

 

Ive thought about people in your situation a number of times, and here is what i would do,

 

1 Open a bank account with a bank unconnected with ANY of your creditors. setup DDs for your priority bills/secured creditors ONLY not the unsecured ones. This is to stop something the banks do called "off-setting", get back if you want to know more.

 

2 Contact CCCS, this is a free service, it is funded by the bankers but gives advice based on the banking code of conduct. You can do it online or phone.

 

CCCS will help you do a Income/Expenditure summary to send to each of your creditors, and a pro-rata sum that you will pay them each month.

They will make a telephone appointment with you, and ask questions about your income expenditure, be as truthful as possible but dont leave yourself short.

 

This summary is then sent to all creditors, with a request to stop all interest/charges.

 

3 Once this is all set up and running smoothly, send a CCA request to each creditor to find out if they have an enforceable agreement, get back to us with the replies.

[Surfer01]

I already have two current accounts so no worries on that score. One with A & L and the other with Nationwide. A & L has all the DDs. Nationwide is used for our daily living and to avoid going overdrawn.

I was a bit unsure of CCCS so contacted Payplan online as they are recommended by CAB and at present waiting for a return call which i should get tomorrow when the offices open.

Does each creditor get to see what the other creditors are owed and what payments that creditor is going to receive? Obviously not too happy if one creditor can see all my other accounts.

[sillygirl1]

It may not be a happy situation for creditors to see the information on you but it highlights to them they are not the only ones and therefore they cannot have a larger share of the 'pot' than they want. Some creditors are a real pain to deal with, especially demanding income and expenditure forms every three months.

 

DONT fill these forms in as it gives them 'too much' information and they only report it to Experian to help 'blacken' your name. Unless you go to court you DO NOT have to supply that info on demand - despite what they may tell you.

 

If you move into the caravan you won't get housing benefit and that may be a problem, also as it is on HP and considered a 'second home' by many it could cause further problems. Whilst on the surface it seems a good idea go with Payplan for a few months to see what happens.