Redundancy looming = not able to pay bills

[jotheblondeone]

Hi, My hubby has just found out he is being made redundant in about 5 or 6 weeks after 19 years with the company (his department is closing and his job will be done in India).

He will do all he can to get another job, but he works in newspaper industry and the operating system he uses is not used elsewhere, so he is not qualified for anything else.

 

We have some serious debts including £12,000 credit card (originally northern rock now co-operative) - they just kept upping credit limit over last 10 years and it got harder to pay anything but minimum payment.

We also have two unsecured loans with N rock of about £9000 and £2000, a black horse loan of £9000 and next directory of about £700 as well as two overdrafts with barclays in each of our names.

Our Mortgage is with N rock £63000 - £24000 interest only, £10000 repayment - the rest is 3 secured loans we got at diff. times. I also have 3 smaller catalogue debts of around £80 a month in total.

The payments for the debts (excluding mortgage) are around £770 a month. Mortgage is £470 ish

 

So after next months wage, if he has not found another job we will be living on my incapacity benefit + tax credits + dla carer which are about £800 per month + any JSA he is entitled to.

 

So my question is how do I prepare for the possibility of him not having a job and only getting JSA and being unable to pay these debts. We will have about £9000 redundancy money and I am concerned that if I go down any sort of debt route that the debtors will be able to take it.

 

Is there somebody I should be contacting now with regards these debts?

Could we pay redundancy off Mortgage but leave 6 months worth of mortgage payments in case we get into anymore difficulties?

If we have to go down a debt management route which is a real probability - what is the best way to go - could we do a debt management plan and avoid court - risking home etc?

 

BTW - No payments have ever been late or missed on any of these debts (although we have struggled to pay them at times) - We both have really good credit ratings - which I know will be shot if we can't afford to pay after next month.

 

This is really worrying both of us (like many others in similar situations at the moment), and I have CFS/ME which makes me really fatigued especially when stressed and I am worried about phone call from debtors etc as I really don't know anything about legal issues/ rights etc.

 

Any help or advice would be greatly appreciated.

 

Thanks

Jo

[badboybill]

Jo,

You are doing the best thing by doing something and whilst you still have time you need to question whether these debts are legitimate.

Simply strategy is play for time and don't let the creditors know your impending situation. There will be people along shortly with template letters for you to send to your creditors.

There is plenty of help here all you need to do is ask.

[cerberusalert]

The most important payments are the mortgage & secured loans. Do they have any form of insurance covering redundancy/unemployment?

 

As for all the others excluding overdrafts you can send CCA requests http://www.consumerforums.com/resources/templates-library/86-debt-collectors/581-cca-request-letter as you get them back if you start a new thread for each, scan them & post them up after removing identifying details, we'll be able to determine whether they are enforceable or not & advise you accordingly.

 

For the overdrafts with Barclays send a SAR http://www.consumerforums.com/resources/templates-library/86-debt-collectors/576-subject-access-request-debt-a-dca with the information you get back you'll be able to determine what unfair charges have been added which you can reclaim thus reducing the debt.

 

It would be wise to open a parachute account with a seperate banking group in which you can deposit your redundancy money safely away from the Barclays sticky fingers because they are allowed to offset between a/cs.

[cerberusalert]

There is no need to get stressed out with all of this as there is a light at the end of the tunnel, albeit it may seem a long way off to you just now.

 

All these debts can be managed either through a debt management program using someone like Payplan, CCCS or Citizens advice. But for the moment it is better to determine which of these debts are indeed enforceable & given the age of some of them there is a likelihood that some of them won't be. That's why I've advised as above.

[jotheblondeone]

Thanks for the replies. As far as I know, only one loan has insurance and that is the unsecured loan with N Rock for £9000. I will have to dig out relevant info to be sure tho.

As far as the CCA's - are they what you sign and keep a copy of? If so, I am sure I have them for all loans, but I don't seem to have one for the original NRock credit card (we have had it 10 years or so) and now it is run by Co-operative - but we have preferential interst rate because we still have mortgage with NRock. do they charge for requesting them?

Re. the overdrafts we have not had any charges in the last couple of years, and even before that it was only a few - would we have to do something about them - I get all my benefits paid into mine.

I have a seperate cahoot current acccount with a small overdraft and a savings account (both online) which I could put redundancy money into.

[cerberusalert]

It's good that you have your copies they could come in useful to compare with what they send you, but you still must request the CCAs from them to ensure that they still have them.

but I don't seem to have one for the original NRock credit card (we have had it 10 years or so) and now it is run by Co-operative

That's good because not only is there a chance that it will be unenforceable but also they will probably be unable to provide a CCA.

do they charge for requesting them?

A CCA request costs £1 each.

 

If there are no charges to speak of with the o/ds it's not worth sending the SAR. But you must open another a/c with an unrelated banking group to who you have debts with, in that way you are in control of your money. Cahoot should be fine that belongs to Abbey which in turn is now owned by Santander.

[cerberusalert]

I get all my benefits paid into mine.

Transfer them to another a/c, only pay into the Barclay a/c what you can afford for them to swallow up. Cancel any standing orders & direct debits you have & transfer them to the new a/c, but preferably set everything up as a standing order not a direct debit.

[jotheblondeone]

Ok thanks for that

I will request CCAs from relevant companies.

Just had a quick look at the form and sorry for being thick, but where it says print your name - do you only do that and not sign it aswell/ - so they do not have a copy of your signature!

Also one loan was taken out very recently so that will be enforcable, but can payment still be reduced?

[cerberusalert]

I've just done a rough calculation about the redundancy issue, obviously it depends on your husbands age, but I take it they are only offering statutary redundancy pay? There is an online calculator Redundancy Payments: Ready Reckoner - BERR

[cerberusalert]

We advise that you print your name and not sign it as it's been alleged that there have been circumstances in which creditors/DCAs have been creative with Photoshop and created agreements where non existed.

[cerberusalert]

Also one loan was taken out very recently so that will be enforcable, but can payment still be reduced?

Once it has been determined which debts are enforceable, when a debt management plan is created all the creditors are taken into consideration and a pro-rata payment is offered from your disposable income,

[jotheblondeone]

Yes he is only getting statutary redundancy which comes to just under £6000 for 19 years (he is 43), and around £3500 severance pay (think they called it that) which is 1 week for every year of service up to maximum of 12 weeks. (this is taxable and will be in final wage).

The redundancy payment has recently changed in April, as before this time the company policy was two weeks for every year. The last redundancies (Voluntary and compulsory) in the company department were in oct/nov (those jobs also went to India) and my hubbies dept were given opportunity to go for 5 remaining jobs with new job titles and a pay rise. He got one of the jobs but still thought that these too would eventually go to India (although not 6 months down the line.)

[cerberusalert]

It's a sign of the times I'm afraid.

[jotheblondeone]

Too true!

[jotheblondeone]

Hi been on all morning with cccs, who can offer a DMP of £177 to be distributed to my creditors with regards to above debts. This would leave us with around £400 for food/clothing/travel etc. This is assuming he goes onto JSA in 5 or 6 weeks time. I put down both barclays bank account overdrafts - but in the debt remedy they sent me, it states that Barclays will continue letting you bank with them but trade in your connect card for electron - do you have to include your overdrafts in these plans? I never mentioned the cahoot current accounts with small overdrafts that we have (one in each of mine and hubbys name). Do I have to? They suggested opening another bank account for payments.

I need to have use of a card, as I am on incapacity and do not get out much so need to use internet to shop and pay for goods etc.

Also if we go down the DMP route, what happens if hubby gets a job, do they automatically take the extra you may earn? They have said it will take 19 years to pay off at this rate, and its a very depressing thought if we have to live on minimum living amounts for that length of time. I know the debts are my fault, but I would feel awful for kids not being able to have holidays etc.

Help

[jotheblondeone]

Also Re. above post - We have payment protection for redundancy fro one of the loans, so does this still need to be included in a DMP?

 

Any advice appreciated

[cerberusalert]

Whilst the the PPI is in force for the loan I doubt whether it would be included in a management plan as technically it is being paid, but the debt manager would explain all the 'ins & outs' anyway.

[cerberusalert]

I was thinking about your mortagage isn't there an insurance with that too? Normally lenders insist on it along with building insurance.

[jotheblondeone]

We have critical illness cover for original £33,000 which is with our endowment policy.

Do you have any advice regarding overdrafts mentioned below:

 

Hi been on all morning with cccs, who can offer a DMP of £177 to be distributed to my creditors with regards to above debts. This would leave us with around £400 for food/clothing/travel etc. This is assuming he goes onto JSA in 5 or 6 weeks time. I put down both barclays bank account overdrafts - but in the debt remedy they sent me, it states that Barclays will continue letting you bank with them but trade in your connect card for electron - do you have to include your overdrafts in these plans? I never mentioned the cahoot current accounts with small overdrafts that we have (one in each of mine and hubbys name). Do I have to? They suggested opening another bank account for payments.

I need to have use of a card, as I am on incapacity and do not get out much so need to use internet to shop and pay for goods etc.

Also if we go down the DMP route, what happens if hubby gets a job, do they automatically take the extra you may earn? They have said it will take 19 years to pay off at this rate, and its a very depressing thought if we have to live on minimum living amounts for that length of time. I know the debts are my fault, but I would feel awful for kids not being able to have holidays etc.

Help

[cerberusalert]

I would contact Citizens Advice & Payplan as well, although CCCS will manage the a/c & they are a 'registered charity' they are in fact financed by the credit industry so tend to 'side' with creditors rather than their client.

 

Barclays will continue letting you bank with them but trade in your connect card for electron - do you have to include your overdrafts in these plans?

I would totally alienate your monies from any a/c which is in the red, as I said banks have the right to offset between a/cs & you need to be fully in control of your income. All you debts should be included really.

I need to have use of a card, as I am on incapacity and do not get out much so need to use internet to shop and pay for goods etc.

You don't need a credit card to do this, a debit card such as Electron/Maestro does the same, or you could pay through Paypal.

Also if we go down the DMP route, what happens if hubby gets a job, do they automatically take the extra you may earn?

Your circumstances are evaluated every year & when your husband begins work again there are certain other expenses which you can include in your income/expenditure form.

I know the debts are my fault, but I would feel awful for kids not being able to have holidays etc.

These can be budgeted for in your income & expenditure forms along with other things such as presents etc.

[cerberusalert]

Don't forget, the repayment timeframe mentioned by CCCS is on the assumption that all your debts are enforceable, some may well not be which will reduce the overall totals. Plus there is the period in which your PPIs will be paying too.

[jotheblondeone]

Hi and thanks for that cerberusalert

I has a long web chat with one of the advisors and she said it would be fine to keep the two cahoot current accounts going which have debit cards (we are going to pay the small overdrafts off with redundancy) -will also transfer all of benefits, hubbys future salary payments to those accounts. I see what you mean regarding the review of DMP and being able to adjust outgoings. Obviously if he got another job we could afford to pay a bit more to the DMP, but still have more disposable income.

But I had to keep adjusting the living expenses to be able to bring the plan under 20 years - this is just using figures if hubby was getting JSA. If he got a job we could pay more which would bring down the length of time.

 

After looking at all the paperwork we have, it seems that we only have PPI for the last secured loan we got a few years ago (in with mortgage payment) of around £78 a month - and we are covered for redundancy.

 

I can see the CAB on thursday afternoon - they have a clinic near me - do you think it is worth speaking to them before deciding anything. Can they do the same sort of thing as CCCS.

 

Thanks

Jo

[cerberusalert]

I can see the CAB on thursday afternoon - they have a clinic near me - do you think it is worth speaking to them before deciding anything. Can they do the same sort of thing as CCCS.

Yes speak to CAB first, they can do exactly the same thing.

[cerberusalert]

CAB will be able to advise better, but don't forget whilst you are on benefits after a certain period the DWP pays a certain amount towards your mortgage. I'm not certain but I think it's the interest payments only. Also some mortgages allow payment holidays, but as I said CAB will advise you to your entitlements.

[ltc1607]

cca the co-op if it was a northern rock card chances are they wont have it or if they do it will not be enforceable