Sick with worry

Neeko

My husband lost his job in November of last year. Despite trying desperately and paying for a course that updates and enhances his skills and qualifications he is still unemployed.
He works in power station/oil refinery/shipyards etc. and we have never in all our married life seen anything like how bad the employment market is for him at the moment.
Up until now we have just about scrapped through with payment protection insurance on things covering most of our payments and with using up our savings paying all the other debts that do not have any payment protection insurance on them. Our savings have run out and the payment protection cover is almost up too.
We now dont have anywhere near enough money to keep up payments on our debts, all of which are unsecured - a bank loan, a large bank overdraft now and four credit cards probabl about 17.5K in total debt.
I am so ashamed and feel so stupid we got into so much debt but have never been behind before or had any problems with paying our commitments in the past, we dont want to default or not to pay people its just we dont have anything left to give them now.
I am not sleeping, cant eat and have just made a complete fool of myself by bursting into tears when just sitting watching tv for no reason, feel as if I am coming unravelled.
What is making things worse is the worry that the companies to which we owe this money can take our house, or force us to go bankrupt or something?
Sorry for such a long, rambling post its just I am trying to calm down, get a grip and want to start by dealing with biggest fear first, losing the place we live.
Thanks for any advice.

Tixy

Hi Neeko

Well done for posting, there is no need to feel ashamed or stupid. A lot of people are in debt problems, some like you due to the recession, others through carelessness and naievity and others through greed.

The fact that you want to tackle things is great.

First 2 bits of advice are 1 to post a financial statement of affairs so you (and we) can see exactly where you are. Use this link and choose format for MSE - http://www.makesenseofcards.com/soacalc.html


Then make an appointment with one of the free debt advice organisations listed here - (they will need much of the info from the SoA so its best to do that first.)
http://www.moneysavingexpert.com/loans/debt-help-plan#help

Please try not to make yourself ill, whilst its worrying and may take a long time to sort the fact that you have posted and asked for help means you are already on your way to sorting things out and hopefully you'll soon be feeling better about things.

Ames

In theory they can make you sell your house or go bankrupt. In practice, that's 99.99% not likely to happen. They have to go through lots of legal proceedings and pay a lot to do it, with no certainty they'll get any money back, especially in the case of bankruptcy. They'll bully and threaten, but at the end of the day they can't have what you don't have. Do the SOA, and we can help with advice, and know all their tricks and how to avoid them.

Neeko

thank you both for responding. Will try and pull myself together and get started on doing the SOA.
We just got told that because of the payment protection insurance that has been covering our mortgage payments being paid to us, it was income and we were not allowed council tax benefit and now owe them money too because the gov. employment service issued something called a stop some time ago, but the council did not apply it correctly as there has been several mistakes made about which benefit we have been on and why.
Will offer our credit card companies a token payment and obviously talk to the bank about non payment of our loan (they hold our mortgage too) but have read about something called a charging order whereby although unsecured debt they can force the sale of your house?
No clue where we would live if that happend.
Thank you both again and going to go try to sort out paperwork etc., cant seem to make my brain work at the moment just feel sick and really scared about what is going to happen if we cant find work. Will companies accept a token payment for a while usually?

Ames

A charging order is way down the line, you've got lots of chances to come to an agreement before that, and even if they get one it's very very difficult for them to force a sale - it basically means that when you choose to sell your house they get their money back from the equity.

You need advice from a qualified benefits advisor about your situation, I wouldn't have thought that they could take mortgage payments into account as income. Get in touch with your CAB asap, in the meantime post what's happened on the benefits board here and the experts will be able to help you.

I was paying token payments for 2 years up until about a year ago. Then I hit a rough patch (I have bipolar), got confused about who owned what debt because there were a few people chasing each one and haven't paid anything since, I will do when next someone writes though and I know who to pay. So yes, they'll accept token payments for a while. they wont like it, and they'll stamp their feet and try and get you to pay more, but they don't have much choice.

Tixy

A charging order is a way for a creditor to effectivley turn unsecured debt into secured debt. It is not that common but it is a possibility.

However in the case of most charging orders these just sit against the house so that if and when you decide to sell your house any equity left after the mortgage is used to repay the charging order first.

In rarecases a charging order can be granted which includes a forced sale of the property but that is not particularly common, especially if its a family home.

I've attached a link to a factsheet about them but do not panic about this yet - you are a long way off this point and hopefully there will be solutions long before this stage http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=15_charging_orders_in_the_county_court.

Companies will usually accept token payments on unsecured debts for a while, the key thing is to treat them all the same and to get advice to ensure you are giving the the info they need but not more info than they need (if you see what I mean)

RAS

Neeko

You have had some very good advice here.

What you need to be aware of, both of you, is that what creditors can do in practice and what they can theoretically do are rather different and there is even more discrepancy between what they can do and what they tell you they can do. In fact there are a whole load of rules about debt collection and the OFt are FINALLY starting kick butt.

So

They may eventually be able to get a charging order but there are a number of legal niceties that may prevent this and legal cases you can use to fight your corner. Even then it is not a disaster.

It is almost unheard of for a consumer creditor to make anyone bankrupt, because it costs them loads and they get very little back. They often threaten it and the OFT is taking steps to stop this happening.

They cant send bailiffs either, but CT is more dificult. Can you have a chat with your local councillor about the situation. People find that things improve as a rule when they are involved in cases.

What you really do need to do is to get yourselves a new bank account, unrelated to the one where your mortgage and OD are held.

Is OH signing on, even if he is not getting benefits? After 13 weeks, he can apply for help with the mortgage.

And please do not feel ashamed. It may not feel like it but your debts are relatively small and you obviously did all you could to protect yourselves. This is the hardest down-turn in a life-time, so be knid to yourselves.

BEAT_THE_DEBT

Please dont feel ashamed it can happen to anyone your in the right place and not alone.x

moneybuster

hi check and recheck your council tax bill do NOT take there word for it, they where charging me twice and it took three quarters of a hour to convince the revenue officer of this, some of them are thick, as for PPI as income i would question this as it is for an insurance payout ??

Regards MB