In a mess - please help/advise

[LevelHeaded]

Hi all,

 

Another sinking person with a plea for help!

 

 

And can I just say - I hope this is in the right section, if not then please feel free to move it. Unfortunately my broadband is pathetic and it's taking me ages to move around on the forum - I know it's a busy place - but everything is slow on this pc - or perhaps it's me that's slow If I should post some of the things separately then just say and I'll move them, I just figured I'd keep it all together so you can see just how far down I've sunk

 

I’ll fill in more information later if needed, the basic info is: I’m a self-employed, single parent. I bought a house when things were good – and spent a lot of money making it liveable; it all got out of control during the recession when I found myself earning next to nothing and having to buy basics on credit cards; I will hold my hands up to having had my head in the sand; my health has suffered severely from the stress and I had a nervous breakdown at the end of last year; I still suffer from panic attacks when I deal with paperwork – and I’ve been diagnosed with CFS/ME, I can now only manage 3 or 4 hours of activity (of any kind) in a day; I have written to all my creditors (roughly every 2 months) since this time last year – advising them that I was having problems and asking for help. I’ve sent Income/Expenditure sheets and details of the extent of my debts. Most have responded with standard letters and now there are loads of debt collection companies after me too.

 

Assets:

· House : worth around £145k, maybe less now

· Car : worth around £1,500

· Motorbike : worth scrap value as not running (about £200)

Debts:

· Mortgage : £140k plus arrears of around £10k

· Secured Loan : around £20k

· CCJ : around £900 left to pay at £50 per month

· Bank Loan : around £5k

· Overdraft : around £2,500

· Cards: just under £30k (spread across 9 credit cards, 1 store card and 1 online store account)

· Council Tax: £100 – asked for advice on vacant property – no response and now they say I’m in arrears

· Water (metered): £7k(!) – what a nightmare, see below!

 

To complicate things : when things were out of control last year I put the house on the market – got an offer of £155k. I found a rental property and a few weeks before exchange I moved (October 2009). That was when I finally got a copy of the HIPS pack (after asking for weeks) and I discovered that the large loan I had taken out was in fact a mortgage (when I signed it I was under tremendous stress – it was all done very quickly). I realised that there would be a shortfall and pulled out of the sale and took the house off the market. That was when I had the nervous breakdown.

 

In November 2009 I stopped paying everyone.

 

Currently : living in the rented house, no-one knows where I am. I’ve set up a new (basic) bank account (I said I’d lived here over 3 years because I didn’t want them to link me on the credit ref agency search – wrong I know but that’s what I did). I receive child benefit, tax credits, child maintenance (sometimes) and a small income from my business. I draw cash each week to live on and there’s never anything left at the end of the month. At the moment the old house has a heap of stuff in that I need to box up and either take to the tip, sell on ebay or squeeze into our new home. It also serves as a buffer between me and the credit card companies because I haven’t given ANYONE our new address. I can’t BEAR the thought of the letters arriving here, I have a panic attack when I collect post from the old house and I couldn’t cope with that every day when the post arrives. I also can’t deal face-to-face with people – or by telephone – both trigger panic attacks. (I had problems with a nasty stalker last year too – police were ineffectual).

 

My last letter to everyone asked for copies of the original signed agreement with them (at the time I hadn’t found this place, but I thought it sounded like a way to delay things and I was sure I’d read somewhere that if there’s no signature then there’s no agreement). On reading through the site I saw something about them having to provide the info – but then I lost the thread that was on and haven’t been able to find it again. I also said that as the situation is so dire I’ll make a nominal monthly payment of £1 to each of them.

 

OK – I’m in a mess and I KNOW I’m in a mess. The CCJ paperwork from MBNA has been a wake-up call and I need advice on lots of different things. My most urgent problems:

 

MBNA(Virgin) Court Claim

· Optima Legal Services, working for MBNA, have just issued a claim against me (an online one). I’ve filed an Acknowledgement of Service to give me time to figure out what to do. However – and this is where I think you lovely people can help – the agreement for the card was done purely online, I didn’t sign any bits of paper.

· The Particulars of Claim read as follows:

o The Claimant’s claim is in respect of a credit agreement regulated by the Consumer Credit Act 1974, made between the Claimant and the Defendant, whereby the Claimant provided the Defendant with a credit card and in return the Defendant agreed to pay at least the minimum monthly payment requested in each statement.

o The Defendant failed to make the minimum payments, as required, and is therefore in breach of the said agreement.

o A default notice was served on the Defendant, which expired on 25/06/2010 and the Defendant has failed to comply with the terms there. A further demand for payment has been made, however the sum due remains outstanding. The Claimant’s claim is therefore the principal sum inclusive of accrued interest which as at stands at £5,***.**, plus costs.

o The Claimant has complied with Sections III and IV of the Practice Direction on Pre-Action Conduct.

· Issue Date is 19th July – I filed the AoS yesterday.

 

Welcome Finance – Secured Loan

· Taken out in 2008 by telephone through Bright Finance

· Paperwork posted out to me

· I’d just been offered a well-paid PAYE role with one of my customers which gave me sufficient income – the customer’s business promptly fell apart leaving me back to being self-employed

· Initial loan was for c£20k with a broker’s fee of 10% to be taken from the loan (that bit was said over the telephone and implied from the paperwork – I’ll find the wording)

· Loan was for a term of 180months – again I’ll dig out the wording

· First statement arrived:

o Broker’s fee was ADDED to the loan

o Shows a minimum term of 180 months

o Working out the figures it would take 19 years to pay off

· I wrote to Welcome asking for answers and got – no reply at all.

· I wrote again – no reply

· Then - I thought I was an intelligent person but I somehow missed the fact it was a mortgage until I got the HIPS copy

· November 2009 I stopped payments to them

· I’ve written again – but the only letters now coming are “pay up or we’ll take you to court”

 

Mortgage

On this I’ve been relatively sensible – I didn’t ignore the letters, I wrote explaining the problems I was having and asking for time. Eventually they threatened court action to repossess and I asked if I could do it voluntarily. They wrote back saying I had to send them the keys and a letter agreeing to whatever they wanted within 10 days. I wrote back asking for more time (10 days is a bit unreasonable I think) and they haven’t chased me since (aside from a standard letter saying – you’re in arrears). I’m hoping to get the house cleared this month. They’ve said that they would expect to be paid first from any sale so the debt owing to them shouldn’t be too bad.

 

Water Company

I wrote in October to ask for advice on how to turn water off at meter (I don’t know which thing in the street is mine and have no idea how to turn it on/off – I can’t kneel down either so impossible to do on my own). I also advised property was vacant. Didn’t get a reply but figured it was all OK until the neighbour rang me to say the garden was “soggy”. Went to the house and nothing was running in the house – found bill on the doormat for £2k saying “unusual usage, check for leaks”. Unusual is right – it’s usually £30 a month!!! I rang them and on checking the meter the water company found it was spinning out of control and turned it off. Bill just received for over £7k WTF?!!!!! It’s half water, half sewerage but as nothing was running in the house the extra water has obviously been leaking underground.

 

Halifax Credit Card (Intelligent Finance)

Nearly forgot this. I wrote in June 2009 advising of problems – they INCREASED my credit limit by 000’s (£4k I think)!! The only real issue I have with them is that they have contacted my EX-husband who lives 300 miles away to ask for my contact details He and I had a joint Halifax bank account before our divorce (8 years ago and as far as I know that account was closed), that was our only financial tie. We have contact relating to our child but that’s it. He told me that they contacted him (about 8 weeks ago I think it was) asking for information on me and telling him that I owed a lot of money on a credit card. I saw him shortly after and he was very aggressive and wanting to know exactly what it was about (which I didn’t tell him). He said that he hadn’t given them my new address though.

 

OK – that’s where I am today. I’ve had a good read through the site and aside from getting confused with the terminology (lots of initials like PPI and CAG – those I understand but others leave me ), I’m sure there are people out there who can give me some advice based on their knowledge/experiences:

 

So my questions are:

1) How do I deal with the MBNA court claim?

2) How do I deal with the “secured” loan dispute?

3) How do I deal with the water company

4) Do I report Halifax for telling my ex I’m in debt?

5) Do I need to ask for the signed credit agreements in a more formal way?

6) Am I right to go down the “voluntary repossession” route?

7) How long can I hide my new address?

8 ) Biggie – should I consider bankruptcy

a. Do I wait for someone to do it as part of a CCJ or whatever?

b. Do I do it before or after the repossession?

c. Will the O/R make allowance for my health issues (I’m petrified of courts/officials and I just know I’ll have a panic attack/meltdown)?

d. What happens to the bank/savings accounts I have as trustee for my young child?

e. What happens with regards to my self-employment? I have two long-term customers who will want me to continue working for them.

f. Will I lose my car and/or bike? (I live in a rural area with little public transport)

g. What would happen about my personal pension – it’s only small but I’ve been paying £40 a month for years.

h. What would happen to the joint life insurance I have with my ex-husband – it has no value unless one of us dies and then the monies are put in trust for our child (he’s never paid a penny towards it though).

 

I think that’s enough for now!!!!! I apologise for this being such an epic post I'm having a "good" day today and can deal with things - I can't tell you how hard it is trying to deal with this on my own :cry:

[rebel11]

Hi Level

 

Welcome to CAG

 

You've come to the right place, the guys here are non-judgemental.

Someone with a bit more knowledge then I have will be along shortly.

 

If you want to deal with these matters, at some point, they have to know where you live.

 

On your credit cards have you had penalty charges applied or have you been miss-sold PPI on any of your debt?

You can claim these all back with interest. You can claim back 6 years plus.

[FlyboyAgain]

At a glance, LH, the way things stand with you I persoanlly wouldn't bother with mis-sold PPI on anything or valid CCAs on credit cards for I'd be looking at bankruptcy as a way out of all this grief. It sounds as though your at your wits' end with it all and I'd speak to the National Debt Helpline or Citzens' Advice Bureau right away. You've got to put a stop to this now or your health will suffer all the more and it ain't worth it, LH. No way!

 

And as to the water board: leave that till the end. It sound slike a prioblem with their equipment and no way can anyone run up that kind of bill with normal usage in such a relatively short time. They're just like the rest of Britain, these days: they'd take the shirt off your back!

 

As to your pension/insurance, I'm not sure on those but you may lose them, too. One of the site team will come along shortly who will offer a more detailed appraoch than I but I'd end all this now, before it ends you.

 

It's just not worth it.

[South Yorks]

Hi LevelHeaded

 

sorry i am not very good on advice - but keep your chin up and listen to what these people say and it will get better Deal with things one at a time and they will be resolved.

 

 

Good luck

[debbbbsy]

Hi,

I would agree with Flyboy. Bankruptcy is a possibility, and you should seriously look into this,consider the advantages & disadvantages,then when you have exhausted all other options, make a decision.

 

The first step is to contact each of your creditors. Send the letter from the forum which asks them to freeze the accounts & accept a token payment. If they are prepared to help you (Which unfortunately is rare), then you may be able to resolve matters.

 

As for the mortgage, if you are nolonger at the property, your not making payments. Resolve this directly with your lender. Becareful, if they repossess the property, & sell it at auction, there could be a substancial defecit, which you will still be liable for.

 

Good luck

 

Debs

 

As for trying to hide from these people. This option will only cause you more stress, you'll dread the daily post, that consant worry that its a demand, with further interest & charges applied.

[Docman]

Hi LH

 

well, you do have a few issues but they can all be dealt with. Remember, worry and stress never paid a penny off anyone's debt. I agree that bankruptcy may be an option but before you do take that step, I think you need to focus on what you need.

 

First, you need somewhere to live. The rented property seems to fit that need for the moment but remember, you could be renting for several years.

Second, you need an income. Benefits are OK but don't provide much of a life. You need to keep the self employed income. That should be possible even if you are bankrupt provided you are not actually trading. Make sure you have a simple bank account.

Third, I think you should talk to a debt counsellor or CAB to help you with the various steps you need to take. If you do talk to someone, come back and perhaps we can advise/help as well.

[LevelHeaded]

Thanks so much for the replies - I really appreciate them.

 

"Talking" here is probably the first step for me as I struggle to talk to people face-to-face or by phone.

 

Bankruptcy is seeming like the best option really, but I'm just so scared of having to actually go to court/meetings. I know that sounds pathetic, but I just can't cope with things nowadays.

 

As for the future - I'll re-build some kind of business which will make enough to live on and renting long-term is my plan now anyway - I wish I'd never bought the damn house, certainly won't be buying another in this lifetime! Where we are is great and it's a long-term arrangement - suits me fine.

[Ganymede]

If you want to deal with these matters, at some point, they have to know where you live.

 

 

 

The creditors will already know where the OP lives, it's very easy to trace a debtor.

[Docman]

Hi LH,

I've had a more detailed read at your first post. It looks to me that you have negative equity of around £10,000 in the house plus the amount owed on the secured charge. If there is negative equity as regards the first lender, the remaining debts are effectively unsecured.

With that negative equity, it looks like you owe over £75,000 with not much chance of repaying it all in the near future. You exceed the limits for the new arrangements such Debt Relief Orders and don't have any real assets to make an IVA worthwhile. I think you are left with going bankrupt. Downside is that it will cost you £600 to do it yourself and it will be recorded on your credit file for 6 years. Upside is that you will be discharged from bankruptcy within 12 months (possibly less) and be free of debts.

You asked a number of specific questions and I have repeated these below with my answers/advice.

1) How do I deal with the MBNA court claim? Give it a few more days to sort yourself out first.

2) How do I deal with the “secured” loan dispute? You could fight it but what is the point?

3) How do I deal with the water company? You have bigger problems than their over inflated bill. Worst they can do is to cut off the supply to the old house and sue you for the £7000, which doesn’t matter if you went bankrupt. A small tip is to make sure you don’t owe small amounts for gas & electricity at the old house. They do count as debts and whilst they shouldn’t do it, some power companies may restrict supplies at your rented house. Water could be the same but with a bill of £7,000 it may be easier to get the bill at the rented house put in your landlord’s name and the cost included in the rent, if it isn’t already.

4) Do I report Halifax for telling my ex I’m in debt? You could do if you want to hassle the Halifax. How nasty have they been to you?

5) Do I need to ask for the signed credit agreements in a more formal way? You could but following recent legal cases, you are likely to receive ‘reconstructed’ agreements, which are not much use to you.

6) Am I right to go down the “voluntary repossession” route? IMO it is a matter of pride in the state of the house you leave behind. You should remove all your stuff from the old house and deal with as you suggested and then hand the keys back to the mortgage company. They will sell it at auction for a fraction of the true cost (certainly below £100k) and then pile on their costs and interest. You could end up owing a further £100k AFTER the auction! On the other hand, you could try and sell the house yourself to keep the price up and the costs down but if you intend to go bankrupt, there isn’t much point as any ‘loss’ by the mortgage company will become a debt in the bankruptcy.

7) How long can I hide my new address? About a month after you registered to vote, sign up for electricity or gas services or just about anything else that needs a credit check. Even if you don’t sign up for anything, most debt collectors could find you within a few hours of searching.

8 ) Biggie – should I consider bankruptcy

a. Do I wait for someone to do it as part of a CCJ or whatever?

You can file for your own bankruptcy. The forms can be downloaded from the Insolvency Service website at www.insolvency.gov.uk. You have to register first but that isn’t a problem. The website also publishes guides on what happens when you go bankrupt, how the Official Receiver deals with you etc. You should read these documents as well so you understand what will happen. Bankruptcy will normally end after 12 months and thereafter you will (largely) no longer have any debts – student loans, fines and a couple of other debt type liabilities may still exist but I doubt will be an issue for you. THE BIGGEST ISSUE IS THE COST. You will need to find £600 to file for your own bankruptcy.

b. Do I do it before or after the repossession? Doesn’t make much difference from the bankruptcy point of view.

c. Will the O/R make allowance for my health issues (I’m petrified of courts/officials and I just know I’ll have a panic attack/meltdown)? .One thing that may help is that you will probably be interviewed on the telephone at an agreed time, rather than in person.

d. What happens to the bank/savings accounts I have as trustee for my young child? You need to discuss with the Official Receiver. These should be excluded from your assets but the OR will need to check to make sure you are not hiding your assets there – it does happen!

e. What happens with regards to my self-employment? I have two long-term customers who will want me to continue working for them. You can be self employed but you can’t ‘trade’ i.e. get goods on credit for resale.

f. Will I lose my car and/or bike? (I live in a rural area with little public transport) Probably not but you will need to declare it as an asset. Make sure you point out the need to have a car locally.

g. What would happen about my personal pension – it’s only small but I’ve been paying £40 a month for years. Should be excluded from the bankruptcy but see the guide for more detail.

h. What would happen to the joint Life Insurance I have with my ex-husband – it has no value unless one of us dies and then the monies are put in trust for our child (he’s never paid a penny towards it though). Should not be touched as it is not an asset. Life ASSURANCE (like an endowment) on the other hand is an asset.

Doc

[debbbbsy]

Bankruptcy is seeming like the best option really, but I'm just so scared of having to actually go to court/meetings. I know that sounds pathetic, but I just can't cope with things nowadays.

 

The best way to approach this is to fully understand what will happen in court & the consequences of being a Bankcrupt. If you understand and accept the court procedures, there'll be no surprises. What frightens you most is uncertainty, remove this from the equation....and allow the court process to run.

 

Use the forums to find others who have gone through this process. There stories will help you through this.

 

Good Luck

 

Debs x

[LevelHeaded]

Thank you soooo much Docman, that's really helped.

 

I hadn't thought about how much they'd actually get for the house - looking back I should've gone through with the sale I'd got, but hey ho too late now.

 

Surprisingly enough, although I'm on the electoral role and registered for electric/water/etc no-one's found me (but then I'm living quite a long way away).

 

Ref the Halifax - that bit really made me angry - I'm sure it's breaking data protection law and it was made more humiliating because my ex told me in a loud voice in front of a bunch of a people (some of whom I knew). My ex is nasty on a good day! I think it's something I'll take further.

 

I've had a look at the Insolvency Service and court paperwork for bankruptcy and I think I'm on the right kind of benefits at the moment to get the court fees reduced (or maybe even waived).

 

Child Savings accounts only have about £150 in - I don't think they'll be too suspicious of that (plus one shows clearly that the money is transfers from grandparents).

 

I'm going camping for the weekend so I'll print off all the paperwork and do some reading.

 

Oh - another question if I get to the filling in paperwork stage - do you think I can do it using my "other" address (rather than the place I'm living now). I know I don't actually sleep there, but it has my stuff there and I do still own it I can't bear the thought of going back to having the curtains drawn and not answering the door/phone.

 

Once upon a time I was a very strong, confident, capable person and I would've been able to handle this - I feel so useless the way I fall apart nowadays!