Advice needed please :(

Sarah1971

My husband left me just over a year ago when my 2nd son was just born. 12 months on and we are divorced, he remarried and he pays the bare minimum (£200 a month) for the childrens upkeep! He lost his job, declared himself bankrupt to take the easy way out paying off his debts, story of his life - burying his head in the sand.

In the meantime I returned to work full time and took on a £152k mortgage and some credit cards. At the time I thought I could manage but as time has gone on, and believe me it's been tough, I have realised I am seriously financially over committed on just one salary and I am needing some advice what to do next.

I am considering writing to/contacting the credit card companies to let them know I can no longer meet the payments. I am worried though that I will have all sorts of problems - I expect CCJs but I am worried about bailiffs and the like. My thinking is as long as I pay my mortgage as I have been doing I should be ok, obviously the CCJs will be paid too in smaller amounts, but they can't take what I haven't got! Also because of his bankruptcy this seems to have affected my credit rating even though we have no financial links so I cannot switch onto 0% cards anymore.

Any help or advice would be greatly appreciated before I take any action.

Thanks in advance for your time and help
Sarah

Tondella

Sarah

I don't have first hand experience of this but there are free debt management charities that will help you through this and negotiate on your behalf with the creditors. Yes, it will result in some changes to your credit record, but far better to be proactive in the management of your repayments than have CCJs and the like filed against you. The charities i have in mind are CCCS and Payplan (try googling or someone will give you the link). The don't charge a penny for this service and are well respected by the creditors.

Whilst we wait for those with more experience to come online and offer their advice let me just say that I am terribly sorry for the circumstances that have led you to this situation, but loads of people here will be able to offer you the support and advice to help you work out of this. All the best!

file_wizzard

Firstly Welcome to the forum and feel free to ask as many things as you like, there is a lot of combined knowledge here so between us all I dont think there is any debt related problem we couldnt solve !

With regards to your debts you didnt say whether you are falling behind on these, or if you are managing to pay them.

If you are falling behind then the best course of action is to contact one of the following, both are excellent and will provide an invaluable service in your situation.

http://www.cccs.co.uk/


http://www.payplan.co.uk


With regards to your “credit score” it is impossible to know why you may be getting declined for cards Ect until you have got hold of your statutory credit files, these cost £2 each but are well worth it.

https://www.equifax.co.uk

https://www.experian.co.uk

https://www.callcredit.co.uk


Perhaps if you feel you can you should list all your debts and income and expenditure, we can then advise of the best course of action for you.

Conrad

Sarah1971 wrote:

My husband left me just over a year ago when my 2nd son was just born. 12 months on and we are divorced, he remarried and he pays the bare minimum (£200 a month) for the childrens upkeep! He lost his job, declared himself bankrupt to take the easy way out paying off his debts, story of his life - burying his head in the sand.

In the meantime I returned to work full time and took on a £152k mortgage and some credit cards. At the time I thought I could manage but as time has gone on, and believe me it's been tough, I have realised I am seriously financially over committed on just one salary and I am needing some advice what to do next.

I am considering writing to/contacting the credit card companies to let them know I can no longer meet the payments. I am worried though that I will have all sorts of problems - I expect CCJs but I am worried about bailiffs and the like. My thinking is as long as I pay my mortgage as I have been doing I should be ok, obviously the CCJs will be paid too in smaller amounts, but they can't take what I haven't got! Also because of his bankruptcy this seems to have affected my credit rating even though we have no financial links so I cannot switch onto 0% cards anymore.

Any help or advice would be greatly appreciated before I take any action.

Thanks in advance for your time and help
Sarah

Sarah, I dont usually visit this part of the forum but felt I had to reply.

I run my own mortgage brokers and have had 15 years experience, so I come accross similar situations all the time.

I cant give you specific advice but you probably have no alternative than to ditch all the debts via bankcruptcy, apart from the mortgage. Make sure the mortgage is interest only for now.

My youngest brother and his girlfreind separately went bankcrupt recently. They had no mortgage or children yet still found going bankcrupt very easy. They now feel as if they have been reborn! It is highly unlikley if not impossible that you will be thrown on the streets unless you cant maintain the mortgage.

Some people will give you all sorts of doom & gloom scenarios about Bankcruptcy, but I can tell u that even in the past before the 'easier' bankcruptcy rules were introduced (last yr) clients of mine went bankcrupt and guess what; life goes on and all of them went on to be able to obtain credit in the future.

Good luck, sounds like you deserve a bit!

Conrad

moneysavingplumber

Hi Sarah,

Sounds tough.

Credit cards are unsecured debt so the mortgage and all your living costs are top priority. If you don't have any tax liabilities then the CCCS or Payplan may be able to help you as posted above.

An IVA (Individual Voluntary Arrangement) is always an option, it may seem crazy spending five years paying back a large lump of what you have borrowed and paying an insolvency practitioner for the priviledge, but it is better than bankruptcy, even though bankruptcy seems so easy now. I personally want to pay back as much of my debts as I can, because I actually think it's the right thing to do (after all, I've had the money), and for me an IVA was the only way to do it and is far less restrictive over the five years than a bankruptcy would be for a year.

If you do look into an IVA be careful about who you go with, some outfits have quite iffy reputations, you shouldn't have to pay anything up-front, their fee should come from your monthly payments. I'm with a relatively small, unknown outfit based in N.I. and two years in, so far so good.

johannamse

I remember reading your post on the other board - glad you posted over here!

Don't be scared by the new terminology, you will learn very quickly.

The most important thing to do is a statement of affairs. These can be quite scary if youv'e never done one. (Or if you were like me, "I don't DOOOO budgets.") But, trust me, you really will feel better when you have sorted this out. If possible you should post it on here, and we will help you.

Well done for taking first step.

Thefunkygibbons

Sarah

Can you post a little more detail

What loans do you have and what APR are they on? What paymenst are you making on these at the moment

Also if you post a statement of income and expenses then we will be able to help see whether you can get better deals or cut down so as to throw more at the debt

I must say, that I would not be recommending bankruptcy until these have been looked at

Sure, it has become easier but lets treat it as a last resort until other options have been considered

$17mma

Cant advise on the mortgage but with reference to your other bills you should take a look at the snowballer, which helps you to calculate what you should prioritise in way of payments...

http://www.whatsthecost.co.uk/snowball.aspx

And National Debt line have some excellent letters on there that you can use to write to your creditors.

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6

You could list all your bills and then maybe someone on here could take a look and advise you.

tattooed_lady

Just wanted to wish you luck and as the other posters have said list your statement of affairs so we can see if we can help you cut back at all

jen_jen_2

take a deep breath, dont panic and get a pen.

you need to write everything down, this will get it out of your head and you will be able to see more clearly what your situation is.

it sounds like you are all up to date with priorities, mortgage, council tax, utilities and its the credit debts that need sorting. by writing down all your essential expenditure you can see what is left for the non-essenials, can you cut back? can you pay minimum payments?

if you cant manage minimum payments then you need to consider one of three options.
dmp - you (often with help from CCCS for example) offer £x per month, ask for interest to be frozen and pay off debt over x years. this arrangement will be reveiwed regularly and if your situation improves you pay off more quickly and if gets worse you pay less over longer time. this will result in defaults, possbile CCJ but if dealt with properly (ie not ignored) is no worse than a piece of paper saying you owe the money.

Iva- this is a more formal arrangement and if you dont pay can be made bankrupt, advantages may be that some of the debt is written off so it only lasts for about 5 years.

bankruptcy - i dont think this is an option for you as you have a house, basically all your assets are taken to pay your debts.

other options you have - consolidation loan - think very carefully about this you are moving unsecured debt to secured debt, if you dont pay they will repossess you. why have you accured debt? will you continue to overspend? if so this is not a realisitic option because it will only fix the problem for a short time and you will be in worse position later down the line.

post your budget and we will all give you advice and options for you to consider.

southernscouser

Conrad wrote:

Sarah, I dont usually visit this part of the forum but felt I had to reply.

I run my own mortgage brokers and have had 15 years experience, so I come accross similar situations all the time.

I cant give you specific advice but you probably have no alternative than to ditch all the debts via bankcruptcy, apart from the mortgage. Make sure the mortgage is interest only for now.

My youngest brother and his girlfreind separately went bankcrupt recently. They had no mortgage or children yet still found going bankcrupt very easy. They now feel as if they have been reborn! It is highly unlikley if not impossible that you will be thrown on the streets unless you cant maintain the mortgage.

Some people will give you all sorts of doom & gloom scenarios about Bankcruptcy, but I can tell u that even in the past before the 'easier' bankcruptcy rules were introduced (last yr) clients of mine went bankcrupt and guess what; life goes on and all of them went on to be able to obtain credit in the future.

Good luck, sounds like you deserve a bit!

Conrad

I don't mean to cause offence but I'm wondering how you came to this conclusion without having any figures in front of you. Bankruptcy is a last resort yet you are saying it seems to be the only one. This advice seems very mis-guided to me with out having a full knowledge of the financial situation. You may be right in saying bankruptcy is the only option but I don't think anyone is in a position to offer advice until we have all seen the information required.