Tired, Fed up and confused!

rich_finch

Hello everyone!

I could really do with some good advice!

2 and a half years ago me and my wife bought our first house (1 bed home for £110k). We took out a 100% interest only mortgage and at the same time also borrowed £25k both from Northern Rock. The £25k loan was for home improvements and consolidation.

Everything was fine for 6 months until my wife started taking some heavy medication for a problem she had suffered with for a long time. The medication made her extremely drowsy and then eventually very depressed. A few months in she had no option than to quit her job leaving me to pay mortgage bills, loan etc.

We both struggled on thinking we could get through and that the NHS would sort out my wifes medication so she could get back on her feet and back to work.

A year and a half passed and nothing was any better it had got far far worse. By now I had borrowed more money from credit cards and a secured loan to pay bills, debts and living costs and my wife was still no better as she had been neglected by her doctors.

Things had go so bad I was having to find an extra £700 a month on top of my salary to survive? This was impossible!? Life was becoming very painful!

I managed to scrape together some of the £700 and family members were amazing! I never fell behind on the mortgage and loans but credit cards where impossible to pay?

We had now run up around £50k of debt altogether.

We went to CAB several times which I didn't find that helpful? one guy said go bankrupt and the other said debt management? but both agreed if we could sell the house and move back with parents then that would be the best idea of all.

We decided to sell the home! we sold it last December for £130k which enabled us to pay back mortgage, fees (early redemption charge, estate agent fees etc) and the secured £15k loan.

We then moved in with my wifes parents back in March and now we had no bills etc etc to pay, freeing up money and make life a little more bearable.

Unfortunately my wifes health got worse and she eventually ended up in hospital with anemia and had to have a blood transfusion. Caused due to medication she is on.

It has now been 5 months and physically and financially things are a lot healthier! My wife is a lot better after getting some attention from the NHS. She is now also on incapacity benefit (£300 a month) and is working a set allowed of hours at a local pub which does help financially and for her it means she can start having a life again as she spent nearly two years in bed sleeping and feeling very ill. I also recently got a 4k payrise.

All creditors are being paid and almost all are in the clear apart from 3 who are with debt collectors (wifes overdraft with natwest £1500, wifes egg c/card £1500 and my Amex card £2800) but we are paying them a set amount each month. Plus we now have money left at the end of each month to save.

Unfortunately though we are still without a house or flat and as you can imagine life at the in-laws is very difficult for everyone.

Hope this hasn't gone on for too long and that some of you are still reading? as this is where I need your help..........

My wife and I have had some disagreements recently.......... I want to stick it out with the in laws for another 6 months to save the extra cash we have to either pay more debt or for a deposit to rent a flat. I am also due a bonus at work soon which should help clear one of the 3 debt collection agencies..the idea being in 6 months we could rent somewhere...........

.. My wife on the other hand would like to go down a debt management route? but is also very keen to rent somehwere.

My argument with her is that we are now almost in the clear with all the creditors (all credit cards are within their limits and loan payment have been up to date for ages) and if we can use the extra money that is coming in now we can clear the debt collection agencies so our credit rating can be repaired. My wife spoke to someone at Gregory Pennington who said they will take all our debt and reduce the monthly payments by £200 and we will be debt free in 7 years? but wont this mean a bad credit rating for seven years plus going backwards by being in trouble with the creditors all over again!!!

QUESTION FOR YOU: What is the best option?

I look forward to hearing from some of you with your opinions. Thanks for reading!!

msmicawber

Hi, and I'm sorry you've had all these troubles. I must say I'm with you - stay put a little while longer, pay off the debts, save for a deposit and then somewhere to rent. The agency won't do this for nothing and they tend to take their cut at the beginning, so a few years down the line you still wouldn't have paid anything off the debts. I'd avoid all these places like the plague - if you want help and advice, it's best to go to the CAB or one of the free debt advice charities, such as CCCS.

I hope that helps. Best wishes.

StressedSteph

I would be VERY reluctant to put your debts into the hands of Debt Management..Baaad idea, unless you have no choice at all. I personally would sooner last another 6+ months with the inlaws and go to route of paying off debts as soon as possible.

I hope you manage to get her to see that your way is the best way. xxx

samtom28

I'm with the above, if you can stick it out for that little bit longer it will be so worth it in the long run.

Also, well done for getting so far and clearing so much debt...also sounds like you've been really supportive of your wife...i'm sure you've been a great help to her when she was ill:T

rich_finch

Hi and thank you very much for your replies! It made me feel better that i'm not alone and eased my mind as to if i'm doing the right thing or not.

Yes it's been a very stressful 2 years especially the past 9-10 months when we had to make the decision of selling our house that we had spent so much time and effort getting it just right, plus having constant calls from creditors wanting money that I didn't have and then of course the wife ending up in hospital!

But I must say life does feel a little easier now but it's just the stress of paying everything, saving and wondering when we might ever have enough money to get back on the property ladder.

It is especially hard sometimes that I have friends that I've grown up with and are doing very well for them selves with nice family homes, a few holidays a year and a bit of money in the bank, it makes things feel worse sometimes.

Anyway..... thanks for your support!

moodydonkey

Evening, me and the ex were with Gregory Pennington a few years back and in our case actually made the situation worse! They took their cut, didn't appear to be dealing with any of our debts AT ALL total waste of time and money in my opinion.

Mudbath

Hiya
You've come so far in the last few years. If you can see it through I would but I know how difficult it can be. I hope things get sorted soon for you both.

mademistakes

Hi there,
Well done on getting to the point you're at now. It must have taken a lot of guts to sell up and move in with in-laws and I'm glad your reaping the benefit.
To be honest, I would avoid gregory pennington at all costs. A friend has had dealings with them in the past, and they do reduce your monthly payments - but they don't seem to pass much money onto the creditors. They basically give you prepaid envelopes to send all the red letters you get onto them - but you still have to deal with the never ending phone calls!
Stick to what you're doing now - it seems to be working!
Hope the good health and wealth continues for you and your wife!
All the best.

GeorgeUK

Why not post up a statement of affairs so we can see what the financial situation is. As you are living with the inlaws, you probably won't be able to cut much from the expenditure, but there might be something we can suggest.
http://www.makesenseofcards.com/soacalc.html

Also, have you had a look at your credit reports to see what kind of state they are in? You can see it free at experian (if you cancel within 30 days) and the others you can get for £2 each.

If you look at the snowball calculator, it should give you a better idea of when your debt free date. It also tells you how much you should be paying to each debt so that you are paying out as little as possible.
https://www.whatsthecost.com/snowball.aspx

If you were to do a DMP, i would advise going to one of the free debt charities rather than someone you paid for. They will be doing the same thing but all your money will go towards your debts.
(Taken from Fermi's signature)

Professional, free and impartial advice on debt problems can be obtained from several charitable and 'not for profit' organisations. They never make a penny from the advice they give, which means it will be given with only your best interests at heart. You can contact:

Your local CAB Office and ask to speak to a 'money advisor'
The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111
National Debtline - Tel: 0808 808 4000
Payplan - Tel: 0800 917 7823

Have you tried reclaiming your bank charges or credit card charges?
Were you missold an endowment or PPI?
http://www.moneysavingexpert.com/reclaim/

Also for the older loan and credit card debts, especially those with a DCA, you could request a copy of the customer credit agreement. If they are unable to produce a copy (with the prescribed terms) then the debt is unenforcable.
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rich_finch

Hello,

Thanks GeorgeUK for that very useful. I went onto Experian and purchased my credit rating and was actual surprised that it wasn't that bad?

Last year I defaulted on my AMEX card and it was handed over to AIC debt collectors, I notice on my credit report that there's no mention of any of this? Anyone one know why this might be?

RAS

Hi

It may be on one of the other two credit checks, it may just have been not been reported.

And please do not touch Gregory Pennington or any other fee paying DMP provider. if your wife still thinks it is a good idea, then have a look at TCalamity's threads on here or do a search on the bankruptcy board.

If you really really decide to do a DMP, then deal with CCCS or Payplan, whose services are free. See below.

http://www.moneysavingexpert.com/loans/debt-help-plan#help

They or NDL can provide telephone debt advice as well.