Help!! 45k debt mountain!

[DebtFreeMO]

Hey everyone,

 

I would be very grateful for some advice on how best to tackle my debt problem.

 

I've spent several hours reading previous threads in this community and i feel reassured that it's something i can manage myself, rather than go down the route of an IVA or DMP.  I will be managing the process for my debt as well as my wifes. We both have unsecured credit card and overdraft debt.

 

I have tried in vain to avoid going down the path of defaulting but it has got to the point where i have no other option. My intention was to borrow more on our mortgage and consolidate our credit cards in to one monthly payment. The existing mortgage is £150k and we planned to borrow an extra £50k. The monthly payments would have been manageable but the recent interest rate increases have killed this idea and we are now faced with an extra £350 per month to find for the mortgage, after fixing for 5 years. 

 

This along with the cost of living crisis means we have an extra several hundred pounds per month to find just to pay the bills and to keep our heads above water. I have tried my absolute best to get us out of this hole, including working an extra job, trying side hustles, applying for a secured loan etc and i need to accept defeat for the sake of my mental health. I've neglected every area of my life in trying to pull us out of this miserable debt hell and I've reached breaking point. I guess, being a decent guy and wanting to do what i deem to be the right thing to do has prevented me from going down this road.

 

We were in a very comfortable situation for a number of years, but still always carried a manageable amount of credit card debt. This was always on interest free promotional rates and i would do a balance transfer whenever the interest free period ended. The last two years have been really difficult with bereavements in the family, a horror house move where we lost a lot of money and now the cost of living crisis. Things have really escalated at a rapid rate and this is the unenviable position we now find ourselves. 

 

My main concern is the effect this could have on our family home. We have three young children and i want to protect our home as best i can. The debts are in sole names and the house is jointly owned. From what i have read does this mean that it would be unlikely that a creditor can force us to sell? 

 

I would really appreciate some advice on what to do short term over the coming months. Should i contact each creditor and offer a token payment? Or miss payments and wait for each card to be issued with a default notice? My main current account is with Lloyds and i have requested a 30 day freeze on daily o/d charges but this has been declined. Would you advise switching bank accounts?

 

My debts consist of:-

 

Halifax CC £7000

Halifax CC £4500

MBNA CC £7600

Capital One £6500

Santander £4600

Lloyds Overdraft £1000

Lloyds Overdraft £900

 

My wifes are Credit cards with Halifax, Virgin and Sainsburys plus a paypal debt. Total is approx £14k. I can provide further details if required.  

 

Any help would be really appreciated.

 

Thank you

[dx100uk]

1st go open a parachute account

and get ALL income going into that A/C from whatever source.

 

i suggest post office or Co-op, someone NOT associated to ANY of you current creditors.

co-op do an online one you can apply for now.

 

next.

to date you have not missed payments and EVERYTHING is still with the original creditors?

 

if this is the case, then the quicker you get defaulted on every credit account the better.

 

ensure you keep paying the things that can threaten the roof over your head

Gas, electric, mortgage, CTAX.

 

the rest can all go whistle for now.

 

no no-one can threaten you with home sale not on consumer credit.

i also question you idea of turning unsecured debt into secured debt with an expanded mortgage or secured loan....bad move that one!

 

[DebtFreeMO]

Thank you very much.

 

No missed payments to date and debts are with the original creditors.

 

My business account is also with Lloyds. I would be transferring my wage to a newly opened bank account. Would you advise switching the business account as well? 

 

I did have a look at Starling. i believe this bank is independently owned. I can open a joint account with my wife for house bills, sole current account for myself, plus possibly a business account. 

 

I know my credit report is about to be trashed, and borrowing money has got us into this mess, but just for future reference i.e 6 years down the line when i remortgage on to hopefully a lower interest rate, would a default notice be the last negative mark on my report? That's assuming i am not hit with any CCJ's.

 

What is the end goal with this process for most people?

Should i play the long game and wait for a discount to be offered and make a full and final payment?

Can a token payment plan go on for years? 

 

Unsecured debt to secured debt.

Yeah i realise this would then put my house at risk if i fail to keep up with repayments, but my attitude was that we have spent the money and i wanted to do what i saw as the right thing, which is to pay it off. 

 

Just to clarify,

i need to open a parachute account, cancel credit card direct debits then sit tight and wait to be issued with a default notice? Do a lot of people change their mobile numbers as well? 

 

Thanks again   

 

[dx100uk]

once you received an official default notice from a creditor and their debt is marked in the summary line defaulted date = XXXXX, which everyone can see....in 6yrs time, on the DN's 6th B'day, regardless to being paid or not or paying or not, the whole account is removed. this does not mean the debt is not due or is wiped.

 

the same goes for CCJ's, regardless to being paid or not or paying or not, the CCJ is removed. this does not mean the CCJ is unenforceable nor wiped.

 

the idea here is to get the bad stuff that is going to happen, happen as quickly as possible, that being a default notice being issued and your credit file being marked. this unusually involves stopping all payments on any consumer credit, .then the quicker your credit file is clear and poss remortage/etc etc becomes an option...with a clean credit file.

 

as this DN gets issued on each account, then you look toward entering them into your pro rata agreement. (letters are in the debt collection section of our library).

 

we don't typically recommend  completely ignoring debts until they are sold on, nor do we recommend nor actually see much success where people try to come to a lower F&F with a debt buyer unless missing enforceable paperwork plays a part.

 

most original creditors do not go for CCJ themselves as its bad publicity. they'd rather sell for 10p=£1 and reclaim the rest on their business insurance...hence how DCA's exist...if everyone stopped paying them overnight, their WHOLE industry would collapse.

 

not sure if i missed anything... 

[fkofilee]

28 minutes ago, DebtFreeMO said:

Thank you very much.

 

No missed payments to date and debts are with the original creditors.

 

My business account is also with Lloyds. I would be transferring my wage to a newly opened bank account. Would you advise switching the business account as well?  I did have a look at Starling. i believe this bank is independently owned. I can open a joint account with my wife for house bills, sole current account for myself, plus possibly a business account. 

 

I know my credit report is about to be trashed, and borrowing money has got us into this mess, but just for future reference i.e 6 years down the line when i remortgage on to hopefully a lower interest rate, would a default notice be the last negative mark on my report? That's assuming i am not hit with any CCJ's.

 

What is the end goal with this process for most people? Should i play the long game and wait for a discount to be offered and make a full and final payment? Can a token payment plan go on for years? 

 

Unsecured debt to secured debt. Yeah i realise this would then put my house at risk if i fail to keep up with repayments, but my attitude was that we have spent the money and i wanted to do what i saw as the right thing, which is to pay it off. 

 

Just to clarify, i need to open a parachute account, cancel credit card direct debits then sit tight and wait to be issued with a default notice? Do a lot of people change their mobile numbers as well? 

 

Thanks again   

 

 

Starling are great so are Monzo. 

 

I have both and the Business offerings are very good. 

Its limited by the fact that its app based, but you can use Post Office with Starling. 

 

Get your account open now. 

[DebtFreeMO]

Awesome. Thanks for your guidance.

 

Re the credit report situation, that all makes sense. I have read previously about the debts being sold for pennies in the pound and the snide tactics employed by the DCA's. I accept this is a process and i need to let it run its course. 

 

I'll document my journey in here.

 

Wish me luck!! 

 

 

[dx100uk]

[fletch70]

I have also found Metro to be reasonably good- they also do a credit card . They are branch based so it depends where you live.

 

One of the great benefits about Starling and Metro is that they do fee free transactions in the EEA. I know holidays maybe unlikely in the near future but its good to know about.

[DebtFreeMO]

Account with Starling opened. I've heard good reviews about them and the process so far has been very efficient.

 

I just need to open a joint account for my priority bills then i'm all set.  

 

Does the age of my debts have any bearing on the action advised above? 

 

I can see from other threads that this is a common question.

 

My credit cards are all less than 10 years old, overdraft has been open maybe two years 

[dx100uk]

 

for the minute dont worry about take out age 

[fkofilee]

On 06/12/2022 at 20:43, DebtFreeMO said:

Account with Starling opened. I've heard good reviews about them and the process so far has been very efficient.

 

I just need to open a joint account for my priority bills then i'm all set.  

 

Starling let you have a 2nd account for free too without it being a joint account. So you could have your main one and then one named for priority bills in your name. 

[Debtstopshop]

I am a spammer from debtstopshop  You are And I have come to spam people who are in debt and who are looking for help.

You should be suspicious of any organisation which has to resort to spamming in order to get clients

[dx100uk]

spam ignore

[BankFodder]

Open

[dx100uk]

open

 

[DebtFreeMO]

Update!!

3 of my cards have defaulted so far. I've received a default letter from Wescot today (Santander cc). The letter is asking to get in touch to either pay in full or arrange a payment plan. 

I'm expecting similar letters re my Capital One and MBNA cards any day now. Halifax x2 are persisting with payment requests. Lloyds have been silent for 6 months.

What are my next steps?

Thanks 

 

[dx100uk]

wetcloths cant send a default notice, they dont by debts, only act for their stated client.

what have you actually received?

a default notice comes from the original creditor and will mention you have defaulted under the consumer credit act 1974 section 87.

an example is attached.

default notice.pdf

[DebtFreeMO]

See attached.

It doesn't look like I have officially defaulted. I logged in to my banking app and checked paperless statements. The last two letters are informing me of the statement of default sums. No mention of defaulting on the credit agreement. 

 

Wescot 1st letter 07-07023-redacted.pdf

[dx100uk]

ignore wetcloths.

that is not a DN and you now knowwhat one looks like

get all your debts defaulted by section 87 letter FIRST.

NOSIA are simply notice a creditor must send if they are going to levy unlawful arrears fees.

 

[DebtFreeMO]

Ok thanks.

I do have an official DN from Cap One, received on the 22nd June. It doesnt mention Section 87, but is advising that my account is offically in default and I have lost the use of my card, a default will be registered on my credit profile for 6 years and that they have the right to demand payment in full or sell the debt to a DCA. 

Do i wait for further comms from them or a DCA? There is no request to pay in full, or any other instructions. It's purely just a notice of default. 

I'll ignore the Wescot one for now.

[dx100uk]

scan the dn up.

dx

[DebtFreeMO]

See attached. I haven't received any further comms from Cap One after this letter.

It's also gone quiet with other creditors, apart from Wescot (Santander). No calls, texts, emails or letters.

Wescot phone and text daily. 

Please advise on my next steps. 

Much appreciated.

Cap One DN 22-06-23_compressed-redacted.pdf

[dx100uk]

thats not a DN thats the cover letter

we need ALL the pages they sent you.

a DN MUST mention section 87/8 as i said before.

and be in the generally accepted correct format.

already showed you what one looked like earlier...

dx

On 08/07/2023 at 22:10, dx100uk said:

wetcloths cant send a default notice, they dont by debts, only act for their stated client.

what have you actually received?

a default notice comes from the original creditor and will mention you have defaulted under the consumer credit act 1974 section 87.

an example is attached.

default notice.pdf 402.9 kB · 3 downloads

 

wheres the rest of it

and please dont hide dates times figures£

 

dx

 

[DebtFreeMO]

That's it.

No mention of Section 87/8. Is that unusual? 

No further letters received since.

I'll post the next letter I receive (dates, figures included) when it arrives.

Thanks 

 

[dx100uk]

then that is not a notice of default

ignore.

dx