need your help please

[theflandereses]

hi,

please can any of you who have been in simular circumstances to me or have good knowledge on the following please give me advice on how best to tackle my problem.

 

7 years ago i purchased a house with my partner on a joint mortgage splitting all bills etc down the middle. Unfortunatly the relationship ended 2 years later so my partner moved out and i paid her the £20,000 she put down as an original deposit on the house which i also originally put down. my plan was to sell within a year and downsize.

 

As soon as i put the house on the market the property market fell and could not sell the house. original buying price was £184,000 went up to value of £210,000 but Now i am living in a house which is worth around £160,000. my mortgage is still £124,000 and have put down £40,000 in deposits.

 

Luckily i am now in a tracker mortgage so my payments have gone down from £960 per month to £630 with the low interest rates but with all other bills on top where this house was set up for 2 paying adults it has finally come to a head where my outgoing (£2100 per month) are the same or a bit more than what i earn (£1700-£2000 per month).

 

i have managed over the last 5 years getting by through a small inheritance but also by credit cards and now have £27,300 on three seperate cards. i have £14,000 on one card, £10,000 on another and £3300 on the third. These payments are cripling me. I have kept going over my overdraft with lloyds but have agreed with them to keep within my overdraft and they have frozen interest for 5 months for me.

 

 

i need advice please on what i can do or how i approach my 3 credit card companies to lower repayments to stop me spiralling into more debt and would my mortgage company be able to help or what should i ask them to do? my friend said ask for a "pay holiday" from them to give me time to catch up? or ask to freeze interst and set up an agreed lower amount. I also have my son who is 8 half of every week so have to take him into consideration giving him a stable home etc

i am very worried about all this and at present even struggle to have money for food etc

 

 

reading it back it sounds like i have managed it all terribly but the plan of only staying a year backfired.

 

please help

 

thanks

Edited December 18, 2012 by citizenB
formatting

[citizenB]

Hi,

 

I have moved you to the Debt forums where you will receive more attention.

 

I think first of all you need to sit down and make yourself a proper budget so you can see exactly what is what.

 

You can deal with your creditors yourself on a DIY Debt Management Plan or you can contact one of the Debt Counselling Charities.

 

I would suggest National Debtline - sadly CAB are overworked and understaffed and you could wait ages for an appointment.

 

Once you have your budget plan, look at your debts.

 

Mortgage and other priority debts cannot be left you must pay your Mortgage / council tax/television licence/utilities and food

 

Unsecured / low priority debts such as credit cards you need to look at.

 

Are there any charges or PPI (Payment Protection Insurance) on any of these credit cards ? If so, you can reclaim the charges and perhaps look at the PPI to see if it is mis sold.

 

If not, then you just need to write to all of these low priority creditors. There are letter templates in the CAG Library you can use.

 

Simply explain that you have reached a point where you are no longer able to maintain your contractual obligations. That for a period of at least 6 months would they please accept £X amount (however much your budget will sustain) and freeze interest and charges in order to allow you to get back on top of things again.

 

Advise that you are not seeking to avoid your liabilities, you simply require some breathing space.

 

Can you let us know who the credit cards are with ?

 

If you have any of the payments for these credit cards on Direct Debit - I suggest you cancel the DD immediately you can set up standing orders or make online payments once you establish how much you can afford to repay them.

[citizenB]

Who is your mortgage with ?

 

A lot of the providers have signed up to the Government Mortgage Protection Scheme whereby they should have in place some help/advice for those who fall into temporary financial hiccups..

 

They might be able to extend the term of the mortgage and lower repayments (although long term I think that would cost more in interest) - Perhaps a payment holiday for 3/ 6 months.

[citizenB]

Forgot.. here is the budget sheet..

 

Ellens Budget Sheet.xls

[theflandereses]

really appreciate your advice, there are some great things for me to go forward with. my mortgage is with alliance & leicster/santander

[theflandereses]

sorry, also credit cards are with barclaycard mastercard £10,000, mbna visa £14,000 and santander mastercard £3300. no ppi's unfortunatley! if i cancel my dd for credit cards should i phone them and notify straight away? they are due to come out over the next week and don't have enough funds to cover them

 

regards

[citizenB]

Have a look at your overall budget first - see how much you can save by sorting out the credit cards.

 

You might not have to approach the bank if you can get the CC off your back for a while.

 

I have flagged your thread for others on the site team .. who might be able to offer more advice re the mortgage..

[Ell-enn]

Hi, it's certainly worth asking the mortgage company for a payment holiday, but what would you use the mortgage money for during that time?

 

Would it be possible for you to take in a lodger to help with the outgoings ? a work colleague or friend ?

[citizenB]

sorry, also credit cards are with barclaycard mastercard £10,000, mbna visa £14,000 and santander mastercard £3300. no ppi's unfortunatley! if i cancel my dd for credit cards should i phone them and notify straight away? they are due to come out over the next week and don't have enough funds to cover them

 

regards

 

If you dont want the monies coming out and leaving you in overdraft situation then you should definitely cancel these immediately.

 

If you get your letters off as soon as you can as well with your proposals.

 

Are any of your credit cards/mortgage with your bank ?

[theflandereses]

Ok thanks for advice, no none of my credit cards or mortgage are linked to my bank.

[citizenB]

Ok thanks for advice, no none of my credit cards or mortgage are linked to my bank.

 

Excellent, in which case you can stop your Direct Debits.. - get those letters off.. you can use the draft templates from the CAG library, simply advising you are suffering a financial hiccup, you are unable to maintain the contractual payments - you are not attempting to avoid liability, you are simply requesting some help/ breathing space.

 

You can afford £x amount, which you would hope they can see their way to accepting for a period of 6 months, when you would be able to review the situation. That the first reduced payment can be made on DATE..

 

HTH.

[citizenB]

I dont know if you do online banking.. if you do, I think you can cancel online.

 

If not, then either telephone the bank or hand deliver a letter cancelling the DDs.

 

Keep an eye on your account - if the bank does pay the DD, then you can get it reversed under the DD guarantee and if any charges are incurred, then they too, are reversed.

[angryoldgit]

I used the free Consumer Credit Council and found them brilliant. They were on my side and made sure I had enough to live on, while agreeing a debt management program with

my bank.