We have so much debt, it seems only hope is selling house!

[Undercover-Elsa]

PS: OFT protection..the Office of Fair Trading lays down guidelines for consumer protection, including debt collection guidelines.

[wilchil64]

Thanks Elsa, that's great and very helpful.

 

I do have most of the original credit agreements for loans etc. Do I need to ask for them?

 

Which template do I need for writing with an offer of reduced monthly payments and requesting they freeze the interest?Or is this not possible?

[landy_alert]

Thanks Elsa. I'm used to screening calls, so will carry on with that. I always write to people if I need to communicate with them.

 

What are the priority payments and what is a CCA? Are there templates on here? Sorry again, if being dim. Will go search now ...

 

I do need to take control, just don' t know where to start!

 

Thanks again.

 

Hi Wilchil:)

 

Priority payments are your mortgage (or rent), council tax and gas/electricity - things you can either lose your home over (mortgage/rent), be taken to prison for non-payment of (council tax) or have your heating supply disconnected (gas/electricity) - these are known as 'priority debts'.

 

I too have been in a similar situation three years ago - my husband buried his head in the sand and also was worried to tell me how bad our situation was. He ended up trying to kill himself - thankfully I found Cag, but not before we sold our family home for a ridiculously low price.

 

We are all here to offer support and advice - don't worry about not understanding what we are waffling on about, just ask away - we've all been there, I remember making a list of all the confusing abbreviations when I first started!

 

Landy x

[Undercover-Elsa]

The important thing is whether THEY still have them. Without them, they can't enforce the debt in court (pre 2007 agreements).

As an example..out of 5 I sent a CCA to, only 1 came up with an agreement (and they messed up on a default notice. Two of them just disappeared into the woodwork. Others send it to different debt collectors..I point out there's no agreement..they disappear then another one tries. If they had solid contracts and dealt fairly, I would of course agree a repayment programme, but having been stung for so many charges and years of interest I feel I've over paid my dues anyway!

[wilchil64]

Thanks, I'm feeling really dim right now! we haven't missed any mortgage payments yet, have been considering going on interest only mortgage for a year to get a grip on things, though. Or taking 3 month mortgage payment holiday? Are either of these a good idea in the scheme of things? I know they make the mortgage last longer and we have a big long mortgage anyway! But in the short term they would help us a lot.

 

Haven't missed council tax or utility payments yet either, one council tax payment bounced but they represented after we called them and all was ok. I'm worried soon we will be missing payments all over the place though.

[wilchil64]

The important thing is whether THEY still have them. Without them, they can't enforce the debt in court (pre 2007 agreements).

As an example..out of 5 I sent a CCA to, only 1 came up with an agreement (and they messed up on a default notice. Two of them just disappeared into the woodwork. Others send it to different debt collectors..I point out there's no agreement..they disappear then another one tries. If they had solid contracts and dealt fairly, I would of course agree a repayment programme, but having been stung for so many charges and years of interest I feel I've over paid my dues anyway!

 

Ahhhhh .... so you're saying, write to them and see if they have a copy of the original credit agreement ... if they don't, they can't re-enforce repayment and I just drop that one, i.e. don't bother paying it off??? Have I understood correctly?

[Rhia]

Undercover Elsa has just given you a really great run down of how to set about it all. It is very confusing to start but you wil get the hang of it - we all have.

 

UE is correct it is well worthwhile asking for the original agreements as they may not have them or they may be missing vital parts which means they can't enforce the debt. It will still exist but they will be unable to go after you for it. So that will be one down.

 

I know from my own dealings that some of them just don't have them in which case it is game over. In your situation I would first have a crack at the loans and credit cards. Don't try and take it all on at one go as you will get muddled (well you might not but I have done and did). I found a good plan is to set up a file for each outstanding debt.

 

As you send out letters keep a copy of everything and put everything in writing. If no-one replies ask again until you have the information you require.

 

With loans and credit cards you need to check if there was anything added such as charges and insurance premiums. (Did I say this already?)

 

And yes if you don't want to borrow any money or get another mortgage who gives a fig about a credit report?It is just another way the creditors and debt collectors try and control people.

[Undercover-Elsa]

Basically, if they wish to enforce an agreement then they must abide by the law. If they fail to do so, it is at their own expense. They will ruthlessly use the law to enforce agreements when they DO get the documentation right. The Consumer protection laws are there to protect us when they don't.

So, not quite that simple or easy, we're not advocating debt avoidance, merely ensuring they have the legal right to collect the debts, and that they are demanding the correct amount.

[Undercover-Elsa]

I personally would not send any offer letters until I'd followed the CCA route and had an account proven enforceable, but at the end of the day it's down to what you feel most comfortable doing.

I think the Citizens Advice website has templates for that, if you decide to go straight in with offers.

Take time to read as much as you can on here and elsewhere..as you know we'll help whatever you decide

[wilchil64]

Undercover Elsa has just given you a really great run down of how to set about it all. It is very confusing to start but you wil get the hang of it - we all have.

UE is correct it is well worthwhile asking for the original agreements as they may not have them or they may be missing vital parts which means they can't enforce the debt. It will still exist but they will be unable to go after you for it. So that will be one down.

I know from my own dealings that some of them just don't have them in which case it is game over. In your situation I would first have a crack at the loans and credit cards. Don't try and take it all on at one go as you will get muddled (well you might not but I have done and did). I found a good plan is to set up a file for each outstanding debt.

As you send out letters keep a copy of everything and put everything in writing. If no-one replies ask again until you have the information you require.

With loans and credit cards you need to check if there was anything added such as charges and insurance premiums. (Did I say this already?)

And yes if you don't want to borrow any money or get another mortgage who gives a fig about a credit report?It is just another way the creditors and debt collectors try and control people.

 

Thanks for the clarification. Then I will start with the credit cards and write first to each company I owe money to and ask for the credit report using the CCA template. Good plan, re keeping a separate file for everything, I feel much calmer if Iknow where everything is and my filing system is so full, it takes me ages to find things!

 

Do I just ask in the CCA letter if there are charges and insurance premiums added? or is that after they have replied to the CCA letter? I never take out insurance premiums on credit cards and loans as my husband works on contracts so his work is never covered. We do have some sort of cover on the TV and DVD in case they break down.

 

I don't think any of my debt is old enough for the companies to have lost the credit agreements

[wilchil64]

I personally would not send any offer letters until I'd followed the CCA route and had an account proven enforceable, but at the end of the day it's down to what you feel most comfortable doing.

I think the Citizens Advice website has templates for that, if you decide to go straight in with offers.

Take time to read as much as you can on here and elsewhere..as you know we'll help whatever you decide

 

Thanks again, you are all great!

 

I will send of the CCA letters to the credit cards we owe to first and see what happens.

[Undercover-Elsa]

No need to ask about charges yet..save that for any that have agreements.

What years are we looking at when they were taken out?

[banker_rhymes_with]

Hello Wilchil64!

 

Firstly, I cannot stress too much that you must not throw away the main asset to feed these creatures.

 

The depths of a recession is not the best time to sell your Home, because you will be throwing away wealth. The value of your Mortgage, relative to the value of your Home, will be at a high point right now. So, if you sell now, then once costs are taken out, and the fact that the price you get will almost certainly be lower than you expect, you'll be left with very little to show for all the payments you have made to fill the Mortgage Company's coffers.

 

The Debt Industry wins, they lent you Number Money that you borrowed into existence, you paid them back bags of Real Money you had to earn first and, if you sell, they get a fat balance in the form of more Real Money from the early and otherwise unscheduled liquidation of your Home.

 

By comparison, fight to keep the Home, and if you manage to do so for a reasonable period, i.e. long enough to see things recover and the value creep up, then not only will the Mortgage Balance be less, but the value of your Home relative to that Balance will be much healthier. If you sell then, you should walk away with a lot more money...because the real value of the Mortgage will have effectively reduced.

 

If nothing else, fighting back might allow you to sell the Home when it suits you, i.e. when you have prepared it for sale, and when you have planned what to do next in more detail. Right now does not sound like the right time for you and the family, and it's almost certainly not the right time given the shape of the economy.

 

Having said that, if you have a place that has a strong market potential, i.e. it's in demand, then selling at the bottom of a Recession does have some advantages, provided you are Captain of your own Destiny!

 

By that, I mean you can put the Capital into good use, and take advantage of other issues. Such as renting, and parking the money safe where the vultures cannot get at it, and/or using the money to make more money.

 

But what does it matter what my credit report is like if I'm not going to borrow any more money?

Quite right. The best advice I can give to anyone, is not to borrow. Stay outside of the clutches of the Debt Industry, and life does go on, and things are, amazingly, quite pleasant. Instead of shopping on a Credit Card, and then spending months to pay off the price of that steak you bought last year, you can instead buy your steak with cash and/or a Debit Card, and pay for it, and eat it, all on the same day, with no Interest to pay. With the savings on Interest, you can afford to pay for another steak, in full, a few months down the line.

 

Once you get the hang of it, you'll start to love Cash, and will start to enjoy managing it, so that none of it ends up in the hands of grasping bankers.

We already lost the decent standard of living and can barely meet the minimum payments now!

Unfortunately, this is what happens. If you live by their rules, then the Debt Industry will get you in the end. Shopping on a Credit Card, or buying your Sofa on HP, or your TV on Interest Free Credit (hint, it's not Free, the Credit is built into the Price), then all that happens is your initial enjoyment is followed by Months of slow pain, as they suck you dry for the momentary pleasure.

 

But if you can nail this now, and stop living by their rules, it can and will get better. When you go to buy that TV, ask them how much for Cash, and you will be amazed at the discounts on offer. You'll be even more amazed at being able to watch your own TV, as opposed to one owned by the Finance Company who provided the Interest Free Credit for 3 Years!

I agree, if we can get through this, we will be stronger and wiser, but can't see how to get through it at the moment.

This is the same as many people, and a comment made by many when they first pitch up here with similar issues. It's no accident. The system is rotten, not the people.

 

It depends on Debt, and depends on people getting into Debt. Daft as this may seem, there is not enough money around to pay for all the Debt. There is only enough to lend the Debt, the Interest on the Debt does not exist. But it has to come from somewhere. So, they need more and more Debt to borrow itself into existence for the whole rotten system to work, otherwise it all comes to a grinding halt.

 

Er...like now!

 

The second the supply of Debt is constrained, the people end up in the poop, because the Interest still has to be paid. But if there is insufficient new Debt borrowing itself into existence, then what happens, what gives?

 

I'll tell you what gives, people lose their Homes, and Businesses go out of Business, as the Debt Industry sinks its claws into Real Assets.

 

This is why the percentage of Real Assets owned by banks and similar Financial Groups has been steadily rising, and that percentage goes up every time there is a Recession. Indeed, it's almost as if the banks want a Recession every now and again!

I don't want the goodies any more, all I really need is maybe a short (4 days) hols for £500 a year, a couple of colas in the pub once a week and maybe a takeaway once a month, plus be able to buy clothes for my children. I don't want much, but I do want to clear the debt for peace of mind.

Don't feel bad, you are not being at all unreasonable.

 

The secret is to realise what has been going on, and what forces have pushed you into this situation. They will tell you that you have brought this upon yourself, and that it was your own poor money management that is to blame.

 

Please take a step back and ask yourself if that was really the case at all?

 

What have you really got to show for all the money that you have paid in Mortgage Interest, HP Interest, Credit Card Interest, Interest Free Interest!

 

I suspect you may be starting to get annoyed.

 

Good.

 

You need to be annoyed, before you can start to take charge of events, and start to fight back and put your family back on track. It won't be easy, because the Debt Industry has control over almost every aspect of our lives, from the way you have to use a bank just to get access to your Pay, to the way everything revolves around banks and the groups that force feed you Debt at any, and every, opportunity.

 

Because they are in control, fighting back is hard work. However, you have found CAG, so the turnaround has started, if you let it.

 

Where do you start?

 

Well, getting organised is the first crucial stage you must strive towards, because you will not stand a chance unless you can clear the decks and get the whole sorry mess lined up, and organised into clearly demarcated areas.

 

A good starting point would be to buy some A4 Lever Arch Folders (£11 for 10 on eBay for example, plus Carriage), buy an A4 Hole-Punch, and start gathering the papers (and the Envelopes, keep all Envelopes!).

 

You are on here, so you must have a PC?

 

So, start using that to get the key issues organised. I find a Spreadsheet is damned handy, use it like a big Calendar, and use coloured boxes and text, to line things up so that you can see the numbers, and can see the time line. When were Agreements made, when are payments due, what is the balance etc.

 

If you can afford it, buy a Home Accounting Package, and start working to a budget. Set up a Cash Flow Spreadsheet to see what Bills you have coming up, and when you need money to pay for them, then tick off the ones you have paid as you work through each month. Keep a firm handle on the true Balances of your bank Account and Petty Cash.

 

Then you can start to fight back, and start to draft letters to each of your Creditors to see where you stand with them.

 

I won't go into detail here, because it's all on CAG, or can be covered in detail in this Thread. But it mainly boils down to sending each a CCA Request, and each a SAR to ensure you get all of the key details.

 

But, as I said right at the start, the Mortgage is key, the rest are far, far less important, although they are the ones that will make you worried and will make you lose sleep.

 

So, they are the ones you must take charge of straight away. You can only pay what you can pay, so you must stop trying to pay what you cannot pay. Moving Balances around from Card to Card, is a sure sign that you are maintaining a payment regime that you cannot afford. Something was bound to fall apart, so there's no point trying to flog a dead horse.

 

Of course these people will say they will come for your Home, but it's not as easy as that, and provided you tackle this sensibly and methodically, you have every chance of planning a way out of this dark hole that you think you are in.

 

It won't be fun, and it won't be easy, but I know that once you start, you will feel a whole lot better.

 

The key is to start, after you make that decision, things should start to improve from there. At the very least, you will be Captain of your own Destiny, and not just another victim of this Recession.

 

I do hope this helps.

 

Cheers,

BRW

[wilchil64]

No need to ask about charges yet..save that for any that have agreements.

What years are we looking at when they were taken out?

 

1 credit card just taken out a few weeks ago, to transfer balance from another where the interest free period had ended and also get rid of some of the overdraft, balance 4600, with low interest of 5.6% for life of the balance transfer.

 

1 credit card has about 400 that are quite recent - last couple of months, but have had card for about 3,4 or 5 years and already transferred balance to another card when interest free period ended - I know we should have cut up the card and closed the account but didn't and then had to use it for petrol for hubbie's journeys to work when the account had no more money in it (I feel so stupid). That has ridiculous interest rate now.

 

Another card have only had a few months - again had to transfer a balance from a card where interest free period had ended and was charging lots of interest. This goes out on direct debit, has about 7K on it.

 

Then loans are 1 from 3 years ago and 1 from 9 months ago (all were t consolidate debts when interest free credit card periods ran out).

 

Car on HP which we took out 2 years ago.

 

Furniture on HP was 2.5 years ago but only has til december and then finished.

 

TV and DVD started on HP last August.

 

Also catalogue debt of about 700, probably gradually built up over last 4 years.

[wilchil64]

Hi BRW,

 

I see your point. Just don't know if I can cope with the worry about how to pay the next bill. I know we only have so much money available in a month, you know that, but the people we owe money to don't care, they want their repayments anyway!

 

But I'm going to do my best. I'll get hold of some cheap files for correspondence. I'm not good at setting up spreadsheets. I have a basic one listing outgoings and income but not sure how to set this up so I have a timeline with when taken out etc. Do you mean: have a column for name, column for start date, column for amount, column for date taken from account each month, column to tick each month etc.?

 

I've found some free personal accounting software I'm downloading right now, will have a go with that, hope I can understand it!

 

Yes, I am angry and aware that the system sucks! big time! I hate the fact that banks have so much control over us, but I also hate us for falling for it, again and again and again! I hate automated phone lines etc.

 

But that's the way it is, isn't it? We have to live in this world. I just don't want this worry and stress anymore. I don't want to live off borrowed money. I want to start at zero again. Can't see a chance of getting there tho.

 

But I will start with the CCA letters and setting up a home account package and spreadsheet, see where we stand.

 

Thank you again.

[Undercover-Elsa]

OK, now we know where we stand. I'm not going to bull sh%t you here..the more recent ones will be more difficult. Basically, the "rules" changed in April 2007. Any agreements prior to that are unenforceable if the fail to supply one, or if certain essential terms are missing (you'll learn more about that as you go along). AFTER April 2007, if the agreements is absent, or missing prescribed terms, a judge can enforce or vary the agreement.

Even so, still send the CCA's (same protection applies for non production after 12 days fron receipt. )Section them into the pre and post April 2007 and we'll deal with the responses as they come.

Wait and see what Banker_Rhymes_with has to say..he's THE MAN!

[Undercover-Elsa]

PS: There's also other ways to skin a cat. They have to get Default Notices right once you stop paying. If they don't, they can shoot themselves in the foot and render themselves only due to the arrears at time of default / termination. So keep anything they send, together with envelopes, and post it up on here. You'll need a scanner or digital camera so we can assess agreements etc

[wilchil64]

Thanks Elsa.

 

When you say pre 2007, do you mean that the account was opened prior to 2007 or that the money was borrowed prior to 2007?

[Undercover-Elsa]

account opened x

[banker_rhymes_with]

Hello Wilchil64!

 

The fact that you are making a start to try and sort this, is brilliant, and no matter which way it all goes, you will be ten times better off than if you are rudderless.

 

An outright battle is not necessarily the way to go, there are many other options, ranging from offering some of them a reduced payment, to investigating what you can get rid of that can help to clear some of them away.

 

Check everything else, and make sure you also dump any other non-essentials, such as Magazine Subscriptions, Sky TV (just use the Free channels and rent the odd DVD), Insurances you do not need etc.

 

Anything that is a drain on your Income, get rid of it (keep the husband however, somebody has to speak up for us)!

 

Cheers,

BRW

[wilchil64]

PS: There's also other ways to skin a cat. They have to get Default Notices right once you stop paying. If they don't, they can shoot themselves in the foot and render themselves only due to the arrears at time of default / termination. So keep anything they send, together with envelopes, and post it up on here. You'll need a scanner or digital camera so we can assess agreements etc

 

Ok we have a scanner, so will do. Thanks for that.

[wilchil64]

Hello Wilchil64!

The fact that you are making a start to try and sort this, is brilliant, and no matter which way it all goes, you will be ten times better off than if you are rudderless.

An outright battle is not necessarily the way to go, there are many other options, ranging from offering some of them a reduced payment, to investigating what you can get rid of that can help to clear some of them away.

Check everything else, and make sure you also dump any other non-essentials, such as Magazine Subscriptions, Sky TV (just use the Free channels and rent the odd DVD), Insurances you do not need etc.

Anything that is a drain on your Income, get rid of it (keep the husband however, somebody has to speak up for us)!

Cheers,

BRW

 

We don't even have Sky TV, just Freeview built into the tv. No magazine subscriptions, we don't rent DVDs. I need to look into insurance, as we have cover on the TV which I am sure we can cancel.

 

I don't want an outright battle, just to make some headway and get the debt cleared. I think if I can get an accounts package working so that I can see how much money we have when, I will be able to keep track of it and hopefully stop us getting in this mess again and get some slowly paid off!

 

Does anyone use Gnucash free accounting software? I've downloaded it but know nothing about accounting so am struggling to understand it at the moment, but will do my best.

[ScarletPimpernel]

You are getting excellent advice, wilchil. I can back up what others say about life without borrowing. You will very quickly realise how liberating it is not to be beholden to banks and credit card companies. You will also find that with help from people here you will be empowered to deal with your creditors. Being in control is a great feeling, and once you have it back you won't want to ive it up again.

[wilchil64]

You are getting excellent advice, wilchil. I can back up what others say about life without borrowing. You will very quickly realise how liberating it is not to be beholden to banks and credit card companies. You will also find that with help from people here you will be empowered to deal with your creditors. Being in control is a great feeling, and once you have it back you won't want to ive it up again.

 

Thanks Scarlet, I look forward to being in that position.

I don't wish to borrow ever again. My husband keeps saying "But what if both cars break down at once and we have no money to pay to repair them? We need a credit card ..." I know we need to be in a position where we can save for things like that. My main problem up to now has been that we have direct debits and payments going out all over the place throughout the month and I couldn't change them to all go out on the first of the month because my husband gets paid weekly. So I could never keep track of how much money we have when ......

 

I hope with some accounting software I can get on top of this, but I'm struggling at the moment. Any suggestions?

[Rhia]

If the accounting software is too complicated why not (to start with) just try getting a sheet of paper and writing down all the things you MUST pay on one side (and I 150% agree with BRW's comments re the house/mortgage). On the other side write down all the debts (cards, loans etc).

Put together an income and expenditure sheet using this information and then you can see what, if anything, is left over and so you will know what is left to allocate to paying these debts down (or not as the case may be if unenforceable)

Yes wait until you have the original agreements back but it does sound like the recent ones may well be watertight compared to the ones pre 2007 (when the new Consumer Credit Act 2006 came into operation).

However, you will also need to follow up the old agreements as these may contain the PPI and charges I referred to earlier. So perhaps start with a Subject Access request on these and request full copies of all statements and original copies of agreements along with correspondence (there is a SAR letter to use).

If you find you do have any charges and PPI then we can help you claim these back and, if there are any, perhaps they can be used to reduce some debt.