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Help needed

Please could somebody advise me as to what is the best thing to do as regards going for a Debt Management course or BR

I have a house with a mortgage of #90,000 although the value is now only about #85,000 - I took the mortgage out 18 months ago on a fixed 2 year rate and pay #500 per month - this goes up to #700 per month this September and there is no way I can afford this payment on my own.

I have unsecured debts of #30,000 mainly made up of bank loan and credit cards

I have stopped paying the unsecured loans as I have no money left at the end of the month to pay these - I have tried to pay minimum payments for so long and survived on buying food etc on my credit cards until they maximised their limits and now don't know which way to turn.

I work full time and my take home pay is approx #300 per week - out of this I pay all my bills which are made up of council tax, mortgage, gas and electric along with telephone line, mobile and broadband, car insurance etc.,

My car is worth #1000 and I need this to travel to and from work as I work shifts and unsociable hours.

I have a meeting the the CCCS in a few days but don't know where to start. I have thought many times just to walk away from everything but worry about the consequences - what would happen if I did walk away from everything and pass the keys to the house back to the mortgage brokers!!!!

I have no arrears with the mortgage brokers nor any arrears on priority bills only bank overdraft and credit cards have arrears.

I would welcome any advice.

Another question I would like to ask - somebody I know who went BR twice tells me that if I changed my name I could start afresh and build up my credit rating along with getting another mortgage later on is this correct!!!!!
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Comments

  • DON79
    DON79 Posts: 3,842 Forumite
    Hi worriedsick :hello: You definitely need to get advice from the cccs but if you are really worried, you can do the online cccs debt remedy which will give you some idea of what solution the cccs will recommend for you.

    If you do not have to pay your creditors can you afford the increased mortgage payment and all your priority bills? You do not have to lose your house if you go BR as long as you can pay the mortgage etc and it does not cost significantly more than the cost of renting a similar property in the area.

    When your fixed rate ends, is the payment going up because of the variable rate or are you fixing it again? If you are fixing it again, have you checked to see if it would be cheaper to let it run on the variable rate for a few months until you can fix it at a better rate?

    your car should be safe as it is worth less than the 2k normally allowed for a car.

    re this -
    somebody I know who went BR twice tells me that if I changed my name I could start afresh and build up my credit rating along with getting another mortgage later on is this correct!!!!!
    . This is not true - yes you could change your name completely and apply for more credit, however it does ask you on the application form if you have been known by another name at all, which means you would either have to disclose your previous name or lie and say no you have had no other name which opens up a can of worms regarding fraud issues. So it is not to be recommended at all and could land your friend in trouble if they did this.

    edit - can you get a relative or a lodger to move in to help with costs?

    If you did decide to walk away from it all and make a fresh start, then any shortfall of the mortgage would be included if you did go BR. it would become unsecured debt and be included in your BR.
    BSC #215/No.1 Jan 09 Club
  • Not an expert but like to say that you have taken the first step by contacting CCCS.

    Good luck and the support here is really good

    The experts will be along soon to give you brilliant advice

    ym

    ps I see DON already has. Well done DON
  • DON79
    DON79 Posts: 3,842 Forumite
    I am really not an expert YM, I make blunders! :o

    I am only passing on what the others have helped me out with! so the thanks goes to fyp and dalip and max and fermi and peachy and tigerfeet and skylight and phil and lots of others i haven't mentioned! :T
    BSC #215/No.1 Jan 09 Club
  • DON79 wrote: »
    I am really not an expert YM, I make blunders! :o

    I am only passing on what the others have helped me out with! so the thanks goes to fyp and dalip and max and fermi and peachy and tigerfeet and skylight and phil and lots of others i haven't mentioned! :T

    You are to me Don :smiley: .
  • Hi Worriesick,

    Looks like we all replied at the same time. Anyway, as Don79 says, welcome to the forum. There will be some more experience peeps along who will help you with your queries, but a good start is yr appt with CCCS. What will also help is popping up yr statement of affairs, which you can do following this link http://makesenseofcards.com/soacalc.html, then you will be offered more directional help.

    So, good luck and well done for taking your first steps to helping yourself.

    MS.
    BSC 289
    A life lived in fear is a life not living!
    Proud to have dealt with my debts.
  • worriedsick, what do you WANT to do, walk away with no house/no debts or attempt to keep the house?

    sounds to me like you are standing on the edge of a cliff...............
    Now we all know how it felt to play in the band on the Titanic...
  • fiveyearplan
    fiveyearplan Posts: 10,143 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Hi Worriedsick and welcome. When considering what to do with your property remember that when our fixed deal is up it is unlikely you will be able to re-mortgage - being BR wouldn't have been a problem to remortgage a couple of years ago but banks just aren't lending much at the moment and would unlikely accept a BR at this time. If you do want to get shot of your property then stop paying the mortgage and save that for your rental deposit and rent.

    I would think with your level of debt that BR would be the better option for you.

    Why don't you pop up your I&E so we can have a look?

    :j :j


  • Thanks for your responses - I would love to keep my house as I have worked so hard to try and keep it but it just seems dark days ahead - I am not sleeping at night - I don't go out because I have no money to enjoy myself so I just sit at home hiding from everyone and it has got to such a state that I can't carry on any longer.

    I thought if I could hold fire from going to a Debt counsellor my credit rating would be better so I could negotiate a better deal with remortgage but it is not to be - the rate I am paying is high and I have tried to remortgage with banks but to no avail - I was previously self employed and because I didn't have the proper accounts for the banks to approve a mortgage I ended up going to a Mortgage Broker - they have offered to give me a reduction to offload my mortgage to another mortgage lender but to no avail as nobody will give me a new mortgage - if the mortgage payments were reduced I could carry on but not with the amount I am paying now and knowing this is going to increase drastically without any hope of getting it cheaper elsewhere because of my debts.

    Would it be possible to extend my payments say over 30 years instead of the 24 years I have at the moment on my mortgage bringing the payments down even though it is an interest only mortgage? (Just a thought)

    As I said before if the payments could be reduced I would be able to do either an IVA or Debt Management programme?

    Thanks also for your comments about name change - I would not want to go down that road but when you hear what other people tell you it puts thoughts in your mind about seeing a light at the end of the tunnel -- but I guessed it would be a fraudlant thing to do or it is somebody who is using another persons ID as they said they could change their NI number which I thought was a bit suspect.

    My outgoings beside the mortgage are approx 250.00 per month this covers all my utility bills etc and that leaves the rest of the money for food, diesel to get to work etc., how much would I have to pay to creditors etc.,
  • Income Amount Net Monthly Salary £ Partner's Monthly Salary £ Benefits £ Hey, I have more incomings than this! (Click on Calculate) TOTAL MONTHLY INCOME £ 1,200.00



    Essential Monthly Outgoings

    Outgoings Amount Mortgage £ Rent £ Council Tax £ Electricity £ Gas £ Heating Oil £ Water Rates £ Telephone £ Mobile Phone £ TV Licence £ Satellite TV £ Internet £ Buildings Insurance £ Contents Insurance £ Life Insurance £ Groceries £ Clothing £ Petrol £ Car Tax £ Car Insurance £ Car MOT £ Car Maintenance £ Car Parking £ Other Travel £ Childminder/Nursery £ Medical/Dental Expenses £ Pets Insurance/Vets Bills £ Birthdays/Christmas £ Holidays £ Oh dear, I have more outgoings than this! (Click on Calculate) TOTAL MONTHLY OUTGOINGS £ 1,063.00 NET MONTHLY SURPLUS £ 137.00



    Monthly Debts

    Debt Total Debt Min Payment Rate £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % £ £ % Oh dear, I have more debts than this! (Click on Calculate) TOTAL DEBT £ 28,373.00



    Assets

    Asset Value Cash £ House Equity £ Shares/Bonds £ Car(s) £
  • DON79
    DON79 Posts: 3,842 Forumite
    Hi did you do this on make sense of cards? It doesn't look as though it has formatted correctly am afraid. have you still got it to try again?
    BSC #215/No.1 Jan 09 Club
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