Advice needed please...

ebaybaby

Hi all,
I met up with my friend today who is in a very bad financial position.
At the moment she owes approx £20,000 (£13,00 loan the rest credit cards).
She has come to an arrangement with her buiding society regarding her mortgage payments. The mortgage is approx £970 pm but they are having to pay £500 in the middle of each payment to catch up with arrears.
On top of this she has unpaid council tax, and the obvious utility bills plus day to day living etc.
She really cannot cope, both her and her Hubby have decent jobs but they are in such a mess, they cant seem to catch up. It feels like at the moment they are working for nothing.
I cant help financially but Id like to help in any other way I can and this is the first place I thought of! (she has no interent access at the mo....cut off, same with the phone).
Can anyone give any advice on where does to start?
Thanks

milliemonster

she needs to start with an SOA, if you canpost one up for her then we can have a look to see where we can help her cut back

In the meantime, she MUST pay priority bills which are Mortgage, Council Tax, Utilities as the consequences of not paying these are severe

ebaybaby

Thank you for your reply.
Whats an SOA?

ebaybaby

Also, Is it worth contacting the national debt helpline? Can she come to an arrangement with CC to pay a mininum?

stapeley

She has to stop paying unsecured debt , ie cards .The rates etc must be paid first . How much does she pay per month in unsecured debt ?

GeorgeUK

SOA = statement of affairs
http://www.makesenseofcards.com/soacalc.html

It sounds like she needs to prioritise her debts. Council tax and anything secured against the house are the main ones, then utility bills and HP bills and food - then unsecured debts such as loans, creditcards and overdrafts.

It would probably be advisable for them to contact one of the free debt charities to discuss their options. If there is enough money after all the expenditure in their budget to pay something towards the unsecured debts, it may be possible to agree a debt management plan (DMP). CCCS and Payplan are good with these but they can also do it themselves if they wish.

First though, i would advise them to open a new bank account with a company they do not owe money to - to pay their income into. This way none of the banks will be able to touch their money and they will be able to retain control.

(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

ebaybaby

Hi George,
Thanks for the advice, will see her tommorrow and do the SOA with her.
Stapeley, at th mo I dont think she can afford to pay anything to her unsecured debts, the mortgage is crippling them. A debt collection man came yesterday re the council tax.
She has made arrangements with gas/elec so thats ok.