How do I start in clearing my debts - SOA UPDATED

morningpearl

How do I start in clearing my debts without losing my home?

I have two overdrafts which are maxed out - I basically use my monthly salary to clear one but then I use the overdraft to pay my monthly bills. With the second overdraft I use part of my first overdraft to pay a DD to the second each month. From this I pay a few DD for bills, the remainder for my food which basically max's my 2nd overdraft all over again.

I'm seriously worried and frightened. If I go to Citizen's Advice or similar naturally my overdrafts are part and parcel of my debts and naturally my accounts will have to be closed down - where should my salary be sent to ?and how do I then set up DDs to pay all my monthly bills? when I imagine no bank will touch me with a barge pole?

I'm a couple of months overdue with my mortgage - this is the only account I am behind in payments.

I have two credit cards which are also maxed out but I'm paying the monthly payments with my overdrafts.

I have a personal loan which again I'm paying the monthly payments with my overdrafts.

I'm disabled - I have MS

I'm currently off sick and have been for six months. My salary will stop being paid on 6 March - only days away. Awaiting for two doctors to talk to each other to work out a return to work!

How should I deal with this please?

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Here is my SOA – I hope I’ve done it correctly – please advise.

I own my house along with Halifax, I live on my own. I have a dual cook microwave (Argos) and a George Foreman Grill but I do not possess a cooker, however, because of lack of funds I cannot buy the worktop I need to fit brand new electric hob with an extractor fan above. This will have to wait. I have a fridge freezer (so I can store my food).

My salary was £17,785 but in a few day’s time I will only be on SSP and that runs out near the end of the March so my annual salary listed above will not be met – Starting to panic. Would like to do some typing from home as a second job but don’t have any contacts and don’t know how to get this started.

Rough workings out:

Monthly Outgoings: -
Halifax Mortgage - £376.39 - arrears of £482.77 – this month I have made a payment of £425 (which includes the Mortgage Protection Insurance). The cost of this insurance is approx £28.00 (included in the £425).
Halifax Secured Loan (2nd Mortgage) - £49.89
Abbey Unsecured Loan - £99.30
Water bills - £23.00
Electric - £32 – this may go up soon with a rearranged payment
Gas - £35 – this may go up soon with a rearranged payment
Home & House Content Insurance - £32.00
Home Response Insurance - £8.50 (to cover electricity, gas and I think water for breakdowns)
BT - Phone & internet - £54.50
TV Licence - £10.99
Food - £130
Prescriptions - £20.00
Life Insurance for my Dad – £18.00
Petrol (for work & visiting my Dad) - £30.00
Car Park Fees - £68.00 (contacting Access to Work to see whether I can apply for a grant due to my MS disability – then only 20% of the new parking facilities that the firm has agreed to my using will need to be found hopefully by employer as a ‘reasonable adjustment’)
Car Insurance - £40.54
Abbey Visa - £45.00
Halifax Visa - £28.00


Total - £1,092.23

Take home pay is: £1,130 and a few pence

This is due to go down from 6 March from my full salary to SSP if the doctors don’t act quickly to get me back to work. SSP runs out near the end of the month. Not sure how I am going to manage if I don’t get back to work.

Council Tax - £82.00 (my Dad pays has been paying this for me for the last eighteen months and he is going to do this for me this year too)

I also have a 3-month interest free item with Argos which I have just under £130. I am hoping to pay £50 this month to help reduce this debt before the interest is added on in March 06.

My total debts excluding the 2 mortgages are in the region of £9,000 (this includes the unsecured loan, two credit cards and Argos item). I also have two overdrafts, being £1,150 and £910 which are maxed out by the end of each month. So I guess my grand total debts are in fact £10,700.00

I am struggling but would have managed if I hadn't become ill.

Things to look positively on: -

• I am going back to work! As soon as the two doctors have their
telephone meeting prior to a report being written for my employers.
The firm wants to make sure that I am fit to go back to work and
what I can and can’t do. (Hip Hip Hoorah!!!)

• I have also applied for DLA which naturally I can’t bank on until I or
if I get approved.

• I have a few items which I am going to try and sell on eBay.

• I have joined the £2 and 20p saving clubs – this can be saved
towards emergencies.

• My freezer is full, my household items (washing up) I have enough
to last me a month. So I may be able to save some of my food bill
to go towards next months payments if I don’t get back to work
early enough.

• I have got a vacuum which has started to burn out and still within
the 12 month guarantee (runs out in May 06) so I am going to take
this back to the shop and have a refund and this money (£54.99)
can go towards next month’s payments too. I’ve got an old spare
but difficult to use (heavy) vacuum that I could try to use or get
my mum to come over and help me.

• Looking at changing both my Gas and Electricity suppliers (but once
I’ve gone back to work). Can get cheaper costs plus a lot of
Nectar Points.

• I’ve started to use the company 18185.com and the sister company
mentioned on this website so I can get a lot of my calls free!! Let’s
see if this works.

• Looking at getting a second income (i.e. typing, doing surveys) –
any ideas anyone??

• Phoned Halifax re my mortgage and my concern today about I more
than likely will not have enough to pay my mortgage. I was told
not to worry and to phone at the end of the month once I knew for
definite. She also suggested that I just round my monthly payment
upto £380 and if I stick to this the remainder can be added back
onto my mortgage - I know that will cost me but currently I'm not
in an awful debt with it. So fingers crossed about getting back to
work soon and then I won't lose too much money and get in more
debt!!!

Question: -

I don’t think I would be accepted but would it be worth trying to get my 2nd mortgage and unsecured loan added to my mortgage – lessening the monthly payments.

Any advice would be gratefully received.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I am also a Debt Free Wannabe!

Highest Debt -> £10,700.00 as at end of Feb 06

Current Debt -> TBA once payments have been taken out this month but it will not have moved very much

Nectar Points collected: 4,703 (points towards food??)
£2 Coin Savers Club = £2
20p Coin Savers Club = £1

Argos £130 paid off £50 this month – remaining = £80

Debt free date - Nov 09 (if not sooner!) :silenced: I’m waiting patiently, VERY patiently!!

roswell

Firstly welcome,

Id start with listing all your current out goings and your incommings, are you being charged for exceding your OD limits ?

Depending on your income etc it will be easier to help. Really you want to be paying your morgage and NOT the other debts just pay them token amounts eg £1 each as your morgage gives you a roof over your head thsi is priority.

Regards

crystal_clear

Welcome Morningpearl
To Debt free wanabee board. You will get lots of helpfull advice on here from others in the same or similiar situation to yourself. But you have taken the biggest step so far admitting there is a problem that needs help.

Fistly can you post a statement of affairs listing all incomings and outgoings pref with any APR's if you know these.

crystal

morningpearl

Thank you for your reply. I will sit down later on and work out all my incomings/outgoings and if it's okay I will respond to you with these. I'm going to try and get some sleep now. Thanks again

Verbatim

Hi Morning Pearl

You must be so worried and I'm sorry to hear about your illness and money problems. The bills to prioritize are mortgage or rent first, then council tax followed by utilities. If you have loans secured on your property these too. Any unsecured debts should be paid last, if you have anything left.

I hope you've had a good sleep. Welcome to MSE and congratulations on having the courage to face up to things.

Chortle_2

welcome morningpearl

Debt is a stressful thing for anyone, but please don't let it make your MS worse, or you will end up in a vicious cycle. (I have MS as well, and stress always brings on relapses for me )

Do you get DLA? If not, have you tried?

Definitely make sure you pay your mortgage above all else - like others have said, a roof over your head is a priority! Is there any chance that you have a policy on it that would cover at least the interest payments whilst you're off sick?

I know it is easier said than done, but try not to worry. It'll just make everything worse! You've come to the right place for help, and this lot will see you on the right track

Feel free to PM me if you want

morningpearl

I've tried my mortgage protection insurance and they have said no as I'm currently off work with lumbago and sciatica. With the info that got from my doctor they have said that a previous back injury means I cannot claim on this as it's classed as a critical illness (that has surprised me - I know MS is classed as a critical illness but back problem???!!!). Anyway I can't go down that avenue.

I have had a DLA form filled in for me by someone at the Council's Benefits Office. She said I should get the highest but I've just got to wait. The DLA are currently writing to my doctor - let's hope there's nothing there that will stop this too, however I will appeal if they say no.

I understand from the MS Society that it usually takes 3 attempts before they say yes. Have you got any ideas? The lady from the Council mentioned in the DLA form that I get my mum to wash my hair and various other things and apparently because of this, I understand, it may be rejected as you have say what you need help with not that you are getting help already. So I'm awaiting my next DLA letter !!

Unfortunately, I don't have Critical Illness Insurance otherwise I believe my mortgage would have been paid off for me.

Chortle_2

I wouldn't believe all you hear about it taking 3 claims before they'll say yes to DLA - I got the higher rate for both care and mobility the first time I applied, and they didn't even make me see one of their (nasty) doctors! It can be done, it just depends on how you word the form, and how supportive your GP is. That said, you won't get a lifetime award, as they assume that ALL cases of MS are relapsing/remitting (never mind that only 40% are in reality! I've never gone into remission, nor am I likely to!) and so only award 2 years at a time to begin with, in the hope that by the time you reapply, you'll be that bit better.

If you are accepted, you'll get back-pay on it, from the time you applied - so there is hope there! It'd be a good chunk of money by the time it arrives! And if they do say no, definitely take it to appeal!

You might also want to try the MS society themselves, as I know they offer grants for some things - it is worth looking into at least in case there is a hardship type grant. There should be details on their website.

As for anything else, post an SOA, and I am sure the lovely people on here will help you out with money-savings and loads of advice!

morningpearl

I have now added my SOA if anyone can help with any advise.

Kindest Regards
morningpearl

roswell

Hi Morning Pearl,

Looking at your SOA there is possibly some savings to be made on food and telephone for a start have you asked BT to change your phone to Option 1(I think it is) Line rental only as your now using the links from this site,

It seems you have a close relationship with your dad is he in any position to help you financialy ?

If you go on SSP and your going to be out of work for some time i would contact CCCS or Pay Plan to see what advice they can give you, if you feel that you will be going back to work shortly then this may not be needed.

Im sure some other MSE`s will be along to help out.

Regards

micheleen

This leapt out at me, you must be on 3 items a month

Prescriptions - £20.00

People who have to pay for more than 5 prescription items in 4 months, or 14 items in 12 months, could save money by buying a PPC. From 1 April 2005, the charge for a single prescription item is £6.50, whereas a 4-month PPC will cost you £33.90 and a 12-month PPC £93.20.

More info and online applications can be made on the Prescription Prepayment Website