Being Made Redundant . Help lots of debt

[SkintBadger]

Hello again,

 

Ironically following on from my first question about work, it looks like we're all going to be laid off! I'm going to bullet point my issue, "just the facts" like they used to say in Dragnet! 

 

I have 2 unsecured loans with TSB (my only bank account provider).

 

Loan 1 taken out in 2020 for £12k

Loan 2 taken out 2021 for 10k.

 

About 20k left as base figure across the two. 

 

My salary is paid weekly and adds up to around £14k a year.

 

Because I sort of lied on the online application that my income was around £18.5k, both loans were approved. 

 

Question 1: as my only source of income is from weekly pay cheque, paid directly into TSB account, surely there is an algorithm that would surely pick up my lie? And even if I WAS on £18.5k pa, surely lending me more than my pre-tax yearly salary is a bit of a wrong 'un?

 

I don't want to go down the route of Irresponsible Lending, because I had and have every intention to pay back my debt, and was grateful they lent me the money to start with!

 

The interest rate on the first loan is 7.9% and 9.9% apr on second. It was kinda too much with a monthly gross income of £1000, to pay back £485 for next 60 months.

 

However I've been doing it, and never missed a payment. But my whole financial life will collapse like a pack of wet cards when I get laid off next month. 

 

This is not my first rodeo unfortunately with DCA's and unmanageable debt.

 

I had a DRO back in 2009 for about £14k which expunged itself in 2015, and almost to the damn day of it ending I started getting phone calls from credit card companies and TSB saying "would you like a loan, would you like a card!". I'm not trying to say they deserve it, I don't believe in debt-avoidance AT ALL, however come on!

 

As it stands today, I have a TSB credit card with a £3500 limit. Current balance £300d

 

American Express Credit Card with £5900 limit. Current balance £0

 

Barclaycard Credit Card with £7900 limit. Current balance £2400.

 

I can cover the credit cards, I could even take a "repayment break" on the two loans for a month, however it's just delaying the inevitable. I can't afford £480 loan repayments anyway.

 

I'm not going to suddenly find a job which pays vastly more than this one I'm about to lose, and even now the repayments are unsustainable.

 

Please understand, I'm an idiot, I didn't sign up to the two loans with an evil laugh, twirling my moustache, and I'm happy to pay back what I owe when/what I can.

 

However, I might need these credit cards to survive the next few months until I find new work. 

 

Question 2: I realise if I were to default the loans then my credit cards would/should be stopped and that will leave me in a hole.

 

But it's probably not a good idea to start servicing my loans with cash withdrawals from credit cards in short term anyway?

 

Would REALLY appreciate any and all constructive responses on what you would do in my position?

 

Any more info needed, please ask away....

 

TIA,

 

S.B.

[dx100uk]

retitlted and moved to our debt self help forum.

 

have a good read of a few threads here 

you'll soon get the idea.

 

open a parachute account on get all your income paid into a bank account that ANY bank within the same group cant offset and snatch your money.

 

i'd go down the pro rata route NOW.

 

send everyone our pro rata letter in the debt collection section of our library.

if you think this situation is going to run for a good few months/years then i'd simply stop payment on all credit now and get every debt you have on your credit file defaulted as soon as possible

then their 6yrs b'day will see them removed and you can start again.

 

 

 

[SkintBadger]

Thank you for response.

I'm not sure I'm mentally prepared to spend another 6 years on a DRO, or bankrupt now surely?

(Last time I was forced to do it in 2009 a DRO had a limit of 15k). Now I'd be at over 20k so must go bankrupt?

 

DX100, you are saying it's better to do it now sooner rather than later?

 

How will this affect my ability to use my three different credit cards after I default on the two TSB loans?

 

Most importantly, I am not a young person. Due to circumstances beyond my control I now live at my parents. They are part of the old generation who said no credit. "If you can't afford it; don't buy it, save up for it".

 

The thought of Bailiffs or even threatening letters turning up at their house where I currently live because I've been an absolute silly  human being.

 

Please don't judge me.

 

Please help me.

[Badtimes123]

Hi Skint, firstly and most importantly, relax friend, there's no rush here. Before you think I don't understand or it's easy for me to say - I've much much more debt than you and almost 1.5 years since I flat out stopped paying a penny across 8ish accounts, to 5+ different lenders. Nothing bad happens, nor will it to you!

 

No one here will judge you, it's not immoral to be in debt!

 

Forget DRO's and Bankruptcy - you will NOT need it. That was before and when you were less informed and likely not on CAG

 

Make a large cup of your favorite drink, sit back and spend the evening having a read through the debt  self help forum threads, as dx suggests, you will soon see what your options are, return here with questions and we will absolutely help you.

 

Once you have a better understanding of your options you will be able to make the best informed decisions and we will help you with those.

 

dx's advice in post #2 is absolutely, 100% THE advice to follow right now, consider it while reading other threads.

 

Stopping paying your loans will not affect your credit cards for many many months, likely until such time you stop paying those as well..

 

BT

 

 

 

 

Edited May 18 by Badtimes123
after thoughts

[SkintBadger]

Thanks Badtimes, a really reassuring reply! OK, I'll take a chillpill, and look around the threads tonight. It's only these two loans, I can comfortably keep paying, maybe even pay-off the credit cards. I was just worried that in my mind the cards act like a buffer/security blanket, and if they were to be cancelled I could literally be bin-hunting for my dinner!

 

I'll have a read around and report back!

 

Thanks again to both of you. 

 

SB

[Bazooka Boo]

And you can definitely get the thought of Bailiffs out of your head, you are a million light years away from that even popping up on the horizon.

 

The worst that will happen is a shed load of deforestation will land on your doormat with begging letters from powerless DCA's who think they're bailiffs, but in truth they nave no more legal powers than next doors goldfish.

 

You just need to relax, and communicate with your creditors now about the change in your circumstances.

[SkintBadger]

Can I ask a purely hypothetical question please?

 

I don't agree with debt avoidance, nor would I ask anyone to advocate it. However, on a purely theoretical level from a desperate man - 

 

Despite about to be jobless, and having covered all this month's debt payments, I still have about £13k in available credit across the 3 credit cards listed above.

 

What would happen if I bought £6k in a 100g gold bar on credit card. Then made repayments for next few months. Then defaulted the card along with the two TSB loans? On the "in for a penny; in for a pound" principle?

 

I could sell that gold when I really needed to in the year to come and survive.

 

Please understand, I realise this is immoral and likely to be seen as fraud. However on a 100% imagination level only. What would happen when I default. They'd want to see what I'd done with the gold. I could show I've sold it for cash, and even provide receipts for what I've spent it on over that year on "cost of living" essential things.

 

Are we allowed to talk "in theory" here, or if not, please feel free to delete post. I've had such horror experiences from banks in the past where they haven't acted with any integrity, there's a small part of me that almost wants to treat them like they treated me.

 

Any theoretical "likely outcome" ideas please....

 

[Badtimes123]

Hey SB, I do know for certain that CAG would always advocate paying your debts and not getting into more debt if possible.

 

I can however comment on my own experience and you will take from that what you will:

I made cash withdrawals on my CC's everyday to the maximum, until I was happy my buffer was sufficient. No one checked/asked or anything about it, because why would they?? all they care about is whether you'll pay or not, not where the money went before you couldn't pay. Then I used the cash to pay the min payment a couple of months.. The reason I chose to do this was, I either default on 50k or 55k.. no brainer, FOR ME that is...

 

Let me come back with another hypothetical scenario

 

Let's imagine you didn't know you were about to have financial issues, you could absolutely use your Credit Cards to buy WHATEVER you want *cough*

 

Fraud - the only people involved in fraud is the financial institutions, in my opinion.

Edited May 19 by Badtimes123
more after thoughts sorry :)

[SkintBadger]

*cough*, since we are talking 100% hypothetically, I really appreciate your response on a theoretical scenario. *cough*.

 

It's not a route I feel particularly honourable going down if I had to. And hopefully I won't. However, if it comes down to my family or the banks - you better believe it ain't gonna be the banks! I was honestly treated so disgustingly by Santander and HSBC back in the mid 2000's that having been a loyal customer since around 1990, the scales fell from my eyes, and a part of me wants to pay them back in spades.

 

However, I try to be a moral person, so my question was only hypothetical. It's just good to hear all the angles from professional people such as you and the others to know what I'm on the hook for. My 100% main concern is to protect my parents who would be devastated and hurt/worried/frightened if DCA letters started arriving. - I'm already the "idiot son" in their mind, and this would be awful. Some things are more important than money! I must protect them from another one of my many mistakes. 

 

Appreciate your time responding. 

 

SB

[Badtimes123]

I'm no professional, just a guy still sweating at the grind stone making other people rich while trying to afford staying alive haha

 

Forget your morals! Banks have lied to us all and keep us ignorant to their scams and how currency really works..

 

Anyway, don't get me started

 

Basically, do whatever you need to do, nothing bad will happen whether you owe 1k or 50k, same processes, same DCA's blah blah blah

 

One thing you will not be able to avoid will be letters though SB - many trees will be harmed during this process

[dx100uk]

letters from anyone, let alone a powerless dca mean nothing.

 

however if you go down the pro rata route, paying everyone a small regular sum, regardless to if they agree to your plan or not.

that will most probably for year(s), delay 99% of letters or any further action. in that time your situation might change for the better.

 

for no other reason than if you were you, i would not be spending any more on credit , purposefully running up more to pay with interest going forward.

 

in the fullness of time if things don't change, eventually each debt will be sold to a debt buyer/DCA, you can again be quite safe to simply file those letters (scan everything as you should with all letters for your records). if you ever get a letter of claim, with a reply pack, you do not ignore that but return here.

 

dx

 

 

 

[SkintBadger]

Thank you both for your helpful and reassuring replies. It's appreciated. 

 

OK, I'll see how the next few months pan out.

 

Fingers crossed! 

 

Ta. SB

 

[Bazooka Boo]

Have you thought about transferring the balances of those cards to interest free cards for the maximum amount of time you are able?

 

Some CC's do interest free for 24 months whilst you will have to maintain payments each month to those cards to keep the zero & interest, you won't be incurring interest at ridiculous % rates.

[SkintBadger]

Thanks BazookaBoo, my cards are all on 0% balance right now. I could probably pay them off in a few months if I stopped my loan payments. 

 

My worry is once I stop my loan payments it'll somehow feedback to my credit report that I've defaulted on my TSB loans and they'll cut off my line of credit.

 

I'm really conflicted on this. 

 

I hate the banks for giving me the money in the first place when they saw how I was with the DRO. Yet I honestly feel a sense of personal responsibility that I should have learned from my mistakes and why am I, once again, about to default and be a shitheel?

I 

Beyond all this, my majoy concern is I could take out £500 a day from all my credit cards, and move to my sisters in Spain, just say "FFF it" -  I live at my folks at 50 right now, it would crush them to walk away and leave them with letters, door knocks, threatening stuff in their 80's. I would be an absolute ******, I can't do that. I WANT TO DO THIS. I can't. Could you?

 

I could probably get about £10k withdrawing money over the next two weeks. I have no issue with that. It's all about my parents. Does this make sense? 

 

SB

Edited May 23 by SkintBadger
honesty

[Badtimes123]

Hey SB

 

Did you make that large drink and have a good read up?

 

Re-read your thread, everything you need is in here already, try not to complicate things just now.

[SkintBadger]

Thanks Badtimes123, yep I've had a good read. I'm still worried about the de-forestation which might be sent to my folks' address. They are so old and fragile it could destroy our relationship.

 

I've got no fear of DCA's but my parents' are old school and do.

 

I've read around the site, there is no answer. I shouldn't have got myself into this position to start with! But I did. I own it.

 

Can you tell me - direct question please - if I change my TSB account to my sister's address in Spain will that stop anything attaching to my parents/my address in UK?

 

Appreciate your answer please.

 

SB

 

 

[Badtimes123]

Post #2 and Post #11 are what you need to do for now, this will prevent DCA's getting involved for many months/years/if ever and will also limit the letters landing on the doorstep.

 

Direct question - Not sure what 'attaching' means, but it doesn't sound good, do not do this and forget that line of thinking all together.

 

"I've read around the site, there is no answer." - I said re-read YOUR thread, everything you need right now is already here

Edited May 23 by Badtimes123

[theoldrouge]

Certainly not advice, just a comment on your "hypothetical " thinking 
if buying gold buy sovereigns not bars, use Amex as they only charge purchase rate on coins not cash rate of interest like most cards do,
plenty of places in Spain to sell sovereigns, with no exchange rate to worry about
selling a small coin brings no attention to yourself , just saying.........

[Bazooka Boo]

They are just letters that their computers spit out at timed intervals, they have absolutely no idea where you are in the debt collection cycle until you contact them (which you won't be doing) and then they tell the computer to start printing another set of lame missives....

 

Unless your parents are opening your letters and reading them, then they won't know your business. You'll just seem popular....

 

In all seriousness, they are only letters from powerless DCA's, with empty threats and words, most of them won't come knocking on the door, and if they did, would be given short shrift as they are on very thin ice turning up unsolicited begging for money.

 

Hiding from debt isn't a solution, so switching bank accounts IMO, won't stop them from travelling down the route they are doing, no.

 

YOU are in control, NOT them, YOU call the shots and they dance to your tune, this isn't the 1980's where DCA's stuck their foot in the door and told you to sell your kidney to pay up.......

 

You have much more legal rights than them.

 

 

 

[SkintBadger]

Thanks for all responses.

 

Been offline for a while thinking about things in general. My innate sense of honour and doing the right thing; is massively conflicted with taking 'em for all they're for and then crying foul. 

 

As I've said before, this isn't my first rodeo with DCAs or getting in trouble with over-extending myself with credit.

 

I can honestly say I've never done it intentionally or fraudulently, however this time I am tempted to rinse every credit card and then just pay them £1 a month until they force me to go bankrupt. I don't say this lightly. 

 

Every person reaches the end of their tether eventually given enough rope.

 

SB.  

[unclebulgaria67]

Use an online benefits calculator such as Entitledto or Turn2us.

 

If you are made redundant, you could claim New Style JSA which pays £77 (25 and over rate) a week for up to 6 months (ends earlier if you find work). This is provided you have paid 6 months NI contributions during last 2 tax years.

 

New Style JSA requires you to be searching for work and to attend Job Centre appointments.

 

The good news is that UK companies are generally short of workers and people are finding work quickly again.   Suggest registering with a couple of local recruitment agencies to see what they have available.

[dx100uk]

But that's not the way to deal with it and I'm not quite sure why you think anyone will make you bk?

 

Heaps of ccj's if the debts get sold on, which they will..

 

Dx

[Badtimes123]

No SB, just no..

 

I'm not sure you ever made that large brew and spent a night reading, if not then make tonight the night, read up on threads here until you fall asleep on your keyboard. There are many reasons why what you just said highlights a lack of fundamental understanding.

 

Posts #2 and #11 remain the only thing you need to do right now, use the rest of your time to learn and stop going inwards, you don't have the knowledge yet to make informed decisions by thinking too much

 

We will still be here when you need more guidance

[SkintBadger]

I've read around the forum enough to know none of you would advocate debt avoidance; however I'm thinking I've got about £15k available across 3 credit cards until the end of the month when I can't make my 2 TSB loan repayments.

 

I am fortunate, (unfortunate?) in that I'm late 40's with no dependents. My life has gone wrong about 3 times now. So, I am tempted to withdraw cash from all cards and buy gold to be delivered before I default on my bank account loans. 

 

Not cool, not nice, but are DCA's or banks any more honourable lending money to people they know based on their salary could never hope to pay it back.

 

Reading around the forum, banks just write it off on their balance sheet as a tax loss anyway, whilst I might be opening up my wrists trying to pay their interest?

 

I might be sounding a bit melodramatic, but if I can't pay back my existing debt today, is there anything wrong with using up ALL my existing credit and starting again in France? (So long as I advice all creditors of my new French address?)

 

Honest thoughts please - (yes I know it's not cool to basically commit "fraud"; however with the banks and DCA's scumbagness what's the reality here?)

 

SB 

[Badtimes123]

You'll know by my previous posts that I have no morals when it comes to financial institutions.

 

The reality is that if you follow the advice provided which is to default them, then pro rata them all to £1PCM, the OC's would eventually sell the debts and the DCA's who purchase them will 9 times out of 10 be unable to provide enforceable paperwork, then 6 years later... poof! all gone.. could be 7 or 8 years away from having the slate wiped clean, regardless of how much debt you have or whether they are 'maxed' or not..

 

Re-read our posts in your thread, we've answered your theoretical questions already, I know oldrouge and I did for sure.