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[stinky_docker]

Hi All,

My sister broke down yesterday and revealed she's got some mounting debts and is struggling to make ends meet....

It basically seems to be in two chunks:

1) A £1600 0ver-draft
2) A £600 gas bill and growing.

OverDraft.

With this one,shes has spent over her authorised overdraft,and seems to be in the realms of bank charges of which much is spoken about. However she never directly asked for this increase,shes a single mother of one out of work and yet gets a better over draft without asking from her bank.

It seems although she isn't without fault or responsibility,the bank have really preyed on a vulnerable person,increase her credit limit despite her circumstances and casued this whole situation,if anyone has some top money saving expert tips or ways to approach this please do help,I have to ring them this afternoon to try sorting the mess out and wondered how best to approach the situation.......??

Gas Bill.

This one started as a very high quatrely bill,since then my sisters moved house,and has now seem her monthly bill almost double.
Again she isn't with some responsibility or fault,but the gas board is now saying she must pay monthly by direct debit,almost double and yet if she ends up in credit they will just keep charging her,meaning as a young broke mum she's be paying over the amout she uses,that money is needed elsewhere.

I'm not sure on how often they've read the meters,but again it seems very harsh on a vulnerable young women so once again whats the best way to proceed fellow money saving experts......

Any help offered is ging to be immensly appreciated,beyond words I can type on here....

Andy

[cat4772]

I have every sympathy for your sister BUT she has to take responsibility for getting into debt. The bank didn't spend this money for her, she spent it! I appreciate that you say the bank increased this without her asking for it BUT she could have said "no thank you" to them and cancelled the increased overdraft facility without spending it!

Your sister CAN manage this debt but it would really help if she were able to produce a SOA (statement of affairs) see this thread http://forums.moneysavingexpert.com/....html?t=107280

Once we see the full financial picture people will be able to offer specific advice.

In the meantime, your sister could open another bank account (moving all direct debits etc) and then pay off her overdraft at the old account with spare money each week/month. Again, more experienced posters will be able to advise.

Regarding the gas bill, your sister would be well advised to check her meter every day (or at least every week). My brother did this and discovered that he had a lty meter because gas was showing as being used when neither the central heating, fire or gas oven had been used!

[MrsTine]

Everything cat said

[imindebttoo]

your sister could open another bank account

This is a must and should be done asap to protect any income your sister receives from future charges and fees - make sure it is a basic bank account - with no credit facilities. Opening this kind of account will not be dependant on credit worthiness.

I use the Coop Cashminder account - but there are others - make sure the bank used is not connected to her current provider.

Further information can be found here:
http://www.moneymadeclear.fsa.gov.uk...k_accounts.pdf

IIDT

[dancingfairy]

Hi - What I would do is obviously check and see if there is a problem with the meter as suggested above. Presuming she does owe this money she needs to work out 1) how much she can realistically pay for the arrears each month 2) whether another company would be a lot cheaper 3) whether she can take any measures to keep the bills down in future - ie getting any grants/getting thicker curtains, any way of keeping the bills down a little -I'm not suggesting that she refuses to put the heating on at all but things like maybe wearing a vest, or another jumper and definitely not doing things like having windows open and heating on full pelt - that kind of thing.
I would probably also go along with the whole opening a new bank account to get any benefits paid into and then she can pay back a set amount towards her overdraft a month until it is clear. This will only work if she has done a full budget and knows exactly what she can spend on what and she has planned for every evenutality ie the years car tax, something towards christmas etc and the new bank account must not have an overdraft otherwise she will keep spending what she doesn't have (If You See What I Mean).
I would try and get her to go to the CAB or ring one of the debt charities as 1) she may have more debts she has forgotton about (or been too embarassed about or even thinks aren't a problem 'cos she is paying the minimums).
2) they can check she is getting all the benefits she is entitled to
3) they can help set up repayment plans with her creditors.
Best of Luck
df

[MrsTine]

Point of note - I don't think you can change suppliers until the arrears have been repaid fairy
Once she's repaid her arrears however she'd be free to move as she pleases and should be able to get a much better deal.

[stinky_docker]

Hi guys,excellent help so far.....

However:

The debt is much worse,she opened up,and after showing me two different Debt Collection agency letters,for two seperate debts,a phone call to the electrical board the debt comes in about £1000 more......

I called her bank,stating we believed she was in financial hardship as listed in Martin's guide (she easily meets nearly all ticks required)....

They wern't very helpful,I'll be calling them back for further discussions now I've read up a little more,but any further help on how to approach this would be great.

The gas bill,well we called them,they have been quite helpful,we are calling back on Monday with correct meter readings,I'm sure with some negotitation we will get somewhere (meters swipe card whatever options,they offered plenty)....

The others,well one involves a company called Mobile Money Ltd,I've started a new thread about these,I'm convinced they must be illegal or breaking the law,how the hell can they charge her almost 380% APR interest on a £450 loan with a £100 S/O to repay.........???

Company name - Mobile Money LTD (just google,I can't post links)
Thread - "Mobile Money Ltd,Surely an illegal operation" - debt free wannabee forum.

Thats were we stand at the moment,more to follow but really a big thanks to al for the help so far......

[MrsTine]

If you think 380% is bad try Typical 2356% APR from Quick Quid (payday loans) - oh yeah... perfectly legal I fear.

These companies make money on peoples ignorance and companies like MM take the log book as security for the loan... that's why they offer a lower apr than companies like Quick Quid or other payday lenders...

You need to get ALL your sisters debts and APRs etc, then fill in an SOA so we can see what she can and can't afford... it might be that a Debt Management Plan is the way forward for her and in that case you might want to direct her to one of the charities in my sig... It's possible to manage a DMP yourself but it doesn't hurt going through one of the charities and it could take a lot of the hassle out of it for her...

[QueenBeruthiel]

Your sister needs to contact a debt charity.

[stinky_docker]

Hi guys,

I'm intending on getting her to call the CCCS on monday,and will also look into this SOA (any links or where I can download one.....? )

Also regards this disgusting MM debt,its seems my fears may have been confirmed by your comments....

Andy

[MrsTine]

SOA calculator

[Luc1]

Mobile Money is the same as Log Book Loans, If I was you, I would tell your sister to hide her car ASAP. They will take the car - is your sister aware now that Mobile Money have registered the car as there's by a Bill of Sale? So if your sister doesn't pay the arrears then they will send out one of there agents/bailiffs to collect the car and this will be sold in a auction within 7 days.

[GeorgeUK]

Does she own the car or is it on HP?

Depending on what her SOA looks like, she may be able to join a credit union and possibly get a loan from them. The rates aren't great, but alot better than she is currently paying. They may also be more forgiving if she has a bad credit rating.

[gfplux]

hello stinky,
It is good that your sister has come clean with you about her problems.
May I suggest you try to separate your anger so you can help fix the problem.
The Bank, the Gas company and the loan company are running business to make money. If they encourage debt or not is not the issue. They have not done anything legally wrong (perhaps morally but that's life)
Good luck.

[Luc1]

Originally Posted by GeorgeUK

Does she own the car or is it on HP?

Depending on what her SOA looks like, she may be able to join a credit union and possibly get a loan from them. The rates aren't great, but alot better than she is currently paying. They may also be more forgiving if she has a bad credit rating.

She did own the car…. But I'm afraid now that its been sold to Money Mobile - This is done by Bill of Sale.
So effectively she sold the car for 25-50% of what the car is worth… now if she wants the car back she will have to pay 10 times the amount she sold it for.

[GeorgeUK]

I was just worried incase the car was HP.

I think her best option right now may be to see if the Credit Union can help, or join one if she needs to be a member for a few weeks beforehand.