Huge Debt - dont know what to do

[licklelady]

Hey people- dont really know what to do for the best and am considering selling my house - so as a last resort I am asking for advice ....

 

I have a house worth £130k

My mortgage is £97k

I have a secured loan of £30k

I have unsecured loans on credit cards etc - £24k

 

total coming into the house monthly is £2,200

total going out is about £2500 including bills etc

 

we have defults so out secured loan company wont extend the term or lend anymore.

 

we have arrers on the mortgage so they wont do anything either

 

we tried an IVA and got refuse on the basis that my partners biggest creditor refused the IVA agreement.

 

Any suggestions people - or who we should visit.?

 

thank you

[sequenci]

i think the first step would be to call one of the impartial debt-help charities.

 

National Debtline: 0808 808 4000

Consumer Credit Counselling Service: 0800 138 1111

 

before you call them, have a go at filling in your personal budget:

 

National Debtline England & Wales | Personal Budget Sheet

 

have you looked at maximising income? are there any extra benefits you can claim?

 

have you any spare bedrooms to rent?

[CAGisforME]

Have you tried the CCCS (Consumer Credit Counselling Service) this is a FREE service that can negotiate on your behalf with your creditors.

 

From the figures you have given above it would appear that once the mortgage and the secured loan were settled you would only have £3k (and that's before you pay the legal/estate agents fees) so what purpose would selling up be and where would you live - bearing in mind that rent can often be more than the ordinary mortgage payments.

 

I can, I promise you, understand fully why you are a little panicked. It becomes a burden over time and weighs you down.

 

You will find that once you have a good look around this site you will realise that you are by no means alone. There are people on this site who have overcome such hurdles and come out fighting.

 

By posting on here I assume that's what you want to do.

 

Whilst everyone on this site will help you to the best of their ability I am sure, you need some PROPER debt counselling.

 

I'm going to give you some pointers, which are my opinion ONLY.

 

Sit down and do a PROPER Income and Expenditure sheet. Sometimes this can REALLY help to focus you on your priorities.

 

Apart from the secured loan and the mortgage payment, leave the other creditor payments off this for the moment.

 

You say that there is £24k in unsecured lending? Who is it to? Have you tried making arrangements with them?

 

There are so many things that can be tried. (For example asking for the Credit Agreements etc to check they are enforceable, writing to ask for reduced payments if they have an enforceable agreement etc etc)

 

Can you raise money by claiming back any unlawful charges from these cards/loans/bank accounts?

 

 

 

You see, when you look at it again, there are things that can be done to possible reduce the debt, but definately reduce the stress.

 

 

I hope I have helped. These forums are wonderful to get support and assistance. Don't panic. Be realistic. Take small steps and you will find there are folks on here to back you all the way and advise you where they can.

 

[Guest ArthurP]

Hello and I hope you get some help from here as I'm sure you will.

 

I'm in a worse position than you as I'm unemployed.

 

However, somebody will be worse off than me, so, it's true that it could be worse.

 

I'm trying to make sure my priority bills are as up to date as possible, such as mortgage, and the credit cards can whistle in the wind as they will not get more than £1 a month from me at this time.

 

I've resigned myself to the credit card people doing what they like-threats, DCA etc and I intend to challenge everything thrown at me over the next few months to buy some time and hope I come out of it ok.

 

Good luck. There are millions like you and I.

[yaffsimone1]

Hello and I hope you get some help from here as I'm sure you will.

 

I'm in a worse position than you as I'm unemployed.

 

However, somebody will be worse off than me, so, it's true that it could be worse.

 

I'm trying to make sure my priority bills are as up to date as possible, such as mortgage, and the credit cards can whistle in the wind as they will not get more than £1 a month from me at this time.

 

I've resigned myself to the credit card people doing what they like-threats, DCA etc and I intend to challenge everything thrown at me over the next few months to buy some time and hope I come out of it ok.

 

Good luck. There are millions like you and I.

 

 

I am doing the same as you. All priority bills paid fortunately my car and mortagage etc have never been in arrears, i intend on keeping it that way.

 

I have CCA'd 4 credit cards and 1 loan, my intention is not avoid paying just to buy me more time and pay a figure i can afford. Circumstances can change literally overnight! Wrap them up in paperwork, play them at thier own game!

 

At the end of the day i thought the worst I will get is a CCJ (hopefully) for 6 years, is it really that bad. I wont be wanting to buy a new house and i certainly dont want credit cards again. So i cant see those 6 years affecting me.

 

You will be able to sort this out with help from this site. What i said is my own personal choice so do what is best for you. They cant bully you anymore. In a wiered kind of way i like getting letters now, its becoming challenging!

[Guest ArthurP]

That's right yaffsimone1-I enjoy the letters and the silly barstewards who hassle me on the phone!

 

Hopefully I'll be getting a few grand from a court case, which is unrelated to creditors etc, so if I do I'm just going to get in touch with them and tell them that a 'family member' will bail me out for a much reduced settlement figure or I go bankrupt. The choice is their's then.

 

Will they take x amount from me to settle, x amount from a DCA if they sell or nought amount if I go bankrupt?

 

I have no plans to move in 6 years so hunky dory.

[CAGisforME]

Well licklelady, you see? It's not just you!

 

I am very pleased to say that I am no longer in this position, but, following a very acrimonious Divorce, I once was and I have NEVER forgotten what it felt like. Neither will you.

 

The thing that causes stress is the feeling of being "out of control" - like the proverbial spiral, it's whizzing away from you. However, you CAN regain control.

 

 

 

This is my step by step advice to ANYONE in a pickle with their finances.

 

DO's

 

Check your income. Are you claiming what you are entitled to for Tax Credits/ Disability Allowances/ Housing Benefit etc?

 

Then:

 

Do the income and expenditure sheet and make sure that you can pay for:

 

1. The mortgage/rent - include in this figure Life Insurance & House Insurance and any secured loans.

2. Heating/Lighting/Cooking

3. Water Rates & Council Tax

 

That's your roof over your head sorted.

 

Then look at the other essentials:

 

1. Food - Be realistic! (But you can probably save a little money if you try)

2. Toilletries

3. Cleaning Products

 

(This list isn't exhaustive, everyone has different essentials!)

 

Ok, so now what's still going out?

 

and is it ABSOLUTELY necessary? Can you save anything here?

 

 

(I recently managed to knock off £90 from my monthly payments by switching contracts with my broadband supplier to a slower connection (£25), cancelling my mobile contract (£30) as I don't use it much now and it's cheaper PAYG and knocked £20 off my Sky bill as I downgraded (we never watch the films anyway!) and got BT to reduce my payment down £15 as we have been more careful with the phone recently.)

 

(ALL thanks to the CAG, as it's focussed my mind on ensuring that I'm watching the pennies like a hawk and because it's reminded me to stay on track)

 

 

So is the rest of your monthly expenditure REALLY necessary?

 

Credit Cards (or debt collectors operating on their behalf) - Write to them and do a CCA request. They have 12 working days to supply you with a properly executed Credit Agreement and a full up to date statement. Once the 12 days are up, if they haven't complied they are in default and you can stop paying them until they produce it.

 

Loans - Ditto

 

DONT's

 

Don't "rob Peter to pay Paul"

Don't talk to Debt Recovery Departments or Debt Collectors on the 'phone. INSIST all correspondence is in writing. KEEP all correspondence. - If you are worried, go to the right section on this site and ask people for help.

Don't WHATEVER you do, borrow any more money!

 

**EXTRA DO's**

 

Once you have the Agreements, if they are enforceable, (make sure by posting details on this site in the relevant forum) send a SUBJECT ACCESS REQUEST to each and every Bank/Credit Card Company that you believe has charged you (if they have sent statements you will be able to check!) and then CLAIM the unlawful penalty charges back.

- That MAY give you a little "capital" which you can use wisely.

 

I think I've thought of everything - eek - I'm a bit rusty!

 

I hope that this helps. I'm pleased others have posted to show you that you aren't alone.

 

Worry about the IMPORTANT expenses and then deal with the rest, when YOU are in Control.

 

[licklelady]

Thanks, have already tried Payplan, CCCS, Debt Free direct none have come up with a satisfactory conclusion as we supposedly have £15.00 per month to live off - dont know where this goes ! , I have had more help from this site in the last 24hrs than any of of these agencies offered, I am going to give it ago CCA's and everything - what have I GOT TO LOSE !!!!

 

Thanks - will keep you posted !

[1stlifeline]

We are in a similar situation to you licklelady. Its so draining when you cant even justify going to the cinema for a night out or buying something to wear however much you need to. At the weekend I spent £10 on bedding plants for my garden which I know was not really a priority but you get so fed up of having to watch every penny dont you. We went down the cccs route but they advised us to sell the house. We dont really want to do this as we wont raise enough to settle everything and wont be any better off as we will have to find rent. The only thing that worries me about not selling is that we were told that if the Halifax, who we owe the most to, wont accept lower payments from us (we have 2 credit cards and my partner has a loan with them) they may be able to put an order on the house forcing the sale. Our mortgage isnt with them, its with the Abbey and we have kept the payments up to date. Im just sick of waking up each day worrying.

[1stlifeline]

At the end of the day i thought the worst I will get is a CCJ (hopefully) for 6 years, is it really that bad. I wont be wanting to buy a new house and i certainly dont want credit cards again. So i cant see those 6 years affecting me.

 

Im confused by this. What exactly is a County Court Judgement and how does it affect you?

 

[yaffsimone1]

At the end of the day i thought the worst I will get is a CCJ (hopefully) for 6 years, is it really that bad. I wont be wanting to buy a new house and i certainly dont want credit cards again. So i cant see those 6 years affecting me.

 

Im confused by this. What exactly is a County Court Judgement and how does it affect you?

 

 

The creditor will submit a claim against you for the debt in the local county court, you either admit the debt and make a payment offer or dispute it and go from there. If you admit the debt and they accept your monthly payment offer they will still enter a judgement against you (i found this is at the discretion of the creditor) this judgement will stay on your credit file for 6 years and will make it vitually immpossible to get credit. But if you dont intend on applying for a mortgage, car HP etc in the next 6-8 years why does it matter?

 

I refer to an earlier question. A charging order may sound scary but for some it is a better option. They vary rarely order a sale of the property they simply put a charge on it, so when you sell it they will get paid out of the profits then whatever is left comes to you.

 

If you pay the debt in the meantime the order can be removed. But charging orders are not suitable in all cases.

[suecrill]

Hi

 

just dropping in to give my support. you will get loads of help and sound advice here. we have been in the same situation and i promise you that when you lift your head start opening your post again (not saying you haven't opened yours, but mine was hidden all over the place) take control of your life and not put your phone on silent ever again - you will feel empowered and able to meet everything head on

~I wish you all the best and if you need a shoulder, pm me and I will do what i can

regards

sue

[licklelady]

Thanks so much everyone - I feel great - and I have even had the nerve to speak to a few of the DCA!! Its so nice to hear people are doing the same as us - i.e hiding the post and ignoring the phone.

 

right........

 

whoooo so far I have applied to all my banks and credit cards asking for statements to claim back the charges etc.

 

Spoke to debtline who say they can do me a DMP.

 

and I have done my money plan as follows (for two people)

 

A = Total Wages = £2320

 

Mortgage = £620

S/Loan = £320

S/Loan = £160

C/Tax = £110

Water = £20

Buildings = £27

Gas = £30

Electric = £30

Fuel = £60

Housekeeping = £300

T.V = £11

HP = £150

Clothing = £30

Phone PAYG = £10

Perscriptions = £10

Extra = £25

 

B = total - £1913

 

A = 2320

- B

=c = £407.00

 

Other Priotys

Mortgage arrears - £900 - offering them £100 per month

C/Tax arrears £210 - offering them £50 per month

 

D = total = £150

 

C - £407.00

-D - £150.00

= E - £257.00 for other creditors

 

we have 20 !! on credit cards, loans and catalogues

 

£257.00 divided by 20

= £12.85 each

 

 

Have I done that right?? And am I now right in thinking I need to send all of that plus a letter staing my new payment offer to all of the creditors.

 

We dont have cable or sky - we cancelled all of them plus cancelled the landline phone and the contrat phones already to save money.

[CAGisforME]

Hi Licklelady,

 

Well, you are getting there. Glad you are feeling brighter and more supported!

 

It's important now that you don't try and run before you can walk!

 

You have your monthly budget planner now, so stick to it and put it up somewhere you can see it to remind you to not go over it!

 

Now, the creditors.

 

I would write to each of them offering £1 per month total token payment until such time as you have got your affairs in order.

 

Write to the mortgage Company and the Council Tax folks and request a reduced monthly payment in the light of your circumstances.

 

Now - those creditors. Having told them you will only pay £1 whilst you sort yourselves out, you now need to NOT TALK TO THEM UNDER ANY CIRCUMSTANCES. They will often try ANYTHING to get you to pay more than you can afford.

 

Do an SAR request to each of them. (You may have to spread these out over time as each SAR will cost you £10 - sometimes returned, sometimes not) and get them to produce your Credit Agreement and Statements. This will give you not only a little breathing space, but also, once you have the agreements, an idea as to whether they are enforceable or not.

 

DON'T offer any payment to them yet, apart from the token, until you receive the Credit Agreements. You might like to add the line "I do not acknowledge any debt to your company until the requested paperwork has been received".

 

They each then have 40 days to respond to you.

 

Sit back. Put the money you would normally have paid out ie, by your calculations £257 somewhere - under the mattress if necessary - and wait for the responses.

 

Each Company you can start a thread for. Spend a fiver or so on some folders to keep all correspondence you receive and send in, that way you won't get in a muddle.

 

There is a fair chance that at least SOME of your creditors will not be able to produce an enforceable agreement, and therefore you don't have to pay them until they do.

 

Those that do have an enforceable agreement you can then deal with one at a time.

 

Keep your chin up. You are beginning to take control.

[CAGisforME]

Forgot to say that there are template letters in the library that you can adapt for your needs!

[CAGisforME]

Also forgot to say that the SARs will also provide you details of all the CHARGES on these accounts.

 

Credit Cards and Catalogues are particularly good at adding charges.

 

You can claim all of these back to reduce or sometimes completely wipe out the balances.

 

See? There is light at the end of the tunnel!!

[licklelady]

gosh its been awhile...... well we are still waiting for a response back from the DMP, our figures were slightly out we didnt have £257 left we only have £137. But they said thats fine and they will let us know.

 

We have written to all the credits and explained what we are doing and they have left us alone since (touch wood)

 

As we have 13 creditcards and banks, we have since got a compnay to trawel thru the 6 years of accounts for each of them. there fee is only 15% and TBH we both work full time and have got thespare time to look thru all the paperwork etc. So I'll let you know who pays what.

 

So all in all we are playing the waiting game. We should hopefully be hearing about the DMP soon so I'll let you all know.

[powelll]

Really glad to hear you're on the right track - the tone of this post is so different to your first one! Best of luck with getting everything sorted out

[CAGisforME]

And they say the written word can't have a "tone"...

 

You sound MUCH brighter!

 

Pleased to see that you are moving onwards and upwards.

[lydz29]

Hi everyone, new to this forum, just thought it appropriate to share my view.

I'm on a DMP with (EDIT) who are also helping me with reclaiming my bank charges, they are a small company and very professional and above all really easy to talk to. I have a person who i can call each time i need help and will only ever have to speak to them.

 

After looking for help I found the bigger debt management companies are ok with you at first but then refer you onto their HUGE call centres. I prefer being able to speak to one person who knows my situation and who i don't have to explain something to everytime.

 

I'd recommend debt-simple to anyone, without sounding to cheesy - they have really helped me get my life back on track.

 

(Commercial link removed)

[CAGisforME]

Lydz. Thanks for sharing your experience.

 

I think it's great that you have found a Company that has relieved you from the stress of debt, however I do feel that a word or two of caution is needed.

 

 

I had a look at the web-site, however I couldn't find the answer to a question I had. Perhaps you can help?

 

When you pay them a monthly amount how much of that goes to Debt-Simple as opposed to your Creditors? I can't see how else they make their money you see.

 

Do they check for enforceability of Credit Agreements before agreeing a plan?

 

 

Re: Reclaiming Bank Charges Debt Simple charge 20% of what they can re-claim for you. Personally I wouldn't accept that.

[Parva]

Have to agree that reclaiming debts has become a niche market for the same sort of people that advertise "Where there's blame there's a claim". There are many companies that now offer debt counselling other than the free ones and it's obvious why they give such a personal service.

 

My girlfriend is with one such company, she speaks highly of them and just this evening has sent a £15 postal order to them because they're going to reclaim £90+ in bank charges. I didn't even bother saying anything after having spent the last three days sorting her PC and laptop out!

 

At the end of the day she's happy with the service and it makes her feel happy. I personally would go the slightly harder route but much less expensive, get advice here and SAR them and whatever else!

 

I just baulk at the idea of yet another company making profit on my misery but having seen the difference in my girlfriend over the months I can see the benefits to the vulnerable but I'd rather tough it out and keep all the extra money that my girlfriend is going to unwittingly pump in to some debt management company.

 

Still, what price happiness I guess....

[sequenci]

Hi everyone, new to this forum, just thought it appropriate to share my view.

I'm on a DMP with debt-simple who are also helping me with reclaiming my bank charges, they are a small company and very professional and above all really easy to talk to. I have a person who i can call each time i need help and will only ever have to speak to them.

 

After looking for help I found the bigger debt management companies are ok with you at first but then refer you onto their HUGE call centres. I prefer being able to speak to one person who knows my situation and who i don't have to explain something to everytime.

 

I'd recommend debt-simple to anyone, without sounding to cheesy - they have really helped me get my life back on track.

 

(EDIT - link removed)

 

a cynic might suggest your first post is purely to promote a firm you're involved with. i'm sure they are great but they are no cccs / ndl

[powelll]

a cynic might suggest you're first post is purely to promote a firm you're involved with. i'm sure they are great but they are no cccs / ndl

 

Agreed... why pay for a service when there is really good quality free advice out there?

[KJD]

When you pay them a monthly amount how much of that goes to Debt-Simple as opposed to your Creditors? I can't see how else they make their money you see./quote]

 

I think its 16% - in their T&Cs