Unemployed and in debt - advice needed!!

funkydaz_2

Hi Guys,

I lost my job about 5 months ago after working in IT. I have a good degree etc and many years experience, although after applying for around 300 jobs I still have had no success. I currently have debts totally 11,000 and a car which is on finance through the Santander group. Whilst working I had a Debt Management Plan setup via Payplan to pay my creditors. During my period of unemployment I have clearly been hassled by creditors and I have made small token payments to them from my benefits when able to do so. In relation to the car finance I have repayment protection on this to cover unemployment, the insurance company is however trying to back out of this as I was not employed consecutively for 6 months with the same employer prior to unemployment.

My question regarding tackling the above is whether or not I should consider handing back the car to the finance company and obtaining a Debt Relief Order to tackle the other debts. I have had a few job interviews, but don't see things looking up anytime soon.

Any help or advice you are able to give me would be much appreciated.

Regards,
Darren.

DarkConvict

Be careful about giving up the car, the return value of the car may not cover the outstanding balance of the loan on it. Someone on here recently had their van taken back, but still had £6,000 left to pay on the loan/hire purchase for it.

As to been hassled their are some hassesment letters you can send out if you are been phoned up alot.
Sample Letter 1

The DRO (Debt Relief Order) i know very little about so can't advise. People on here or charities like CCCS or National Debt Helpline maybe alternatives places of advice.

fatbelly

funkydaz wrote: »

My question regarding tackling the above is whether or not I should consider handing back the car to the finance company and obtaining a Debt Relief Order to tackle the other debts. I have had a few job interviews, but don't see things looking up anytime soon. .

Hi Darren

Without full info it's difficult to advise, so you might want to post a statement of affairs using the calculator:

http://www.makesenseofcards.com/soacalc.html

What to do about the car depends whether it's an actual hire purchase agreement or not (you'll need to check the original paperwork).

There is a big difference between a voluntary termination of a hp agreement and a repossession. There is a sample calculation (and a sample letter) at the end of this factsheet:

Factsheet | How to deal with Hire Purchase debt

It's definitely worth looking into your options but a DRO may not be the best way forward if you are likely to get a job in the next year and so increase your surplus income to over £50 per month.

MrsTinks

The insurance will have a clause in it stating you have to have had 6 months continious employment prior to the repayment protection kicking in - this is standard stuff unfortunately. What you could argue is that they should return any payments on the policy that you have paid as they shouldn't have agreed to the policy based on the fact you didn't qualify for the cover. Do read your policy documents very carefully though...

Also check your agreement carefully about surrendering the vehicle voluntarily - some only allow it after you have paid 50% of the original value, some attach a hefty penalty etc etc

Job hunt like never before... stop looking just in IT, look at what courses you can do for free too in the mean time - broaden your work possibilities as much as possible. If need be then try to find a cleaning job - I know it's lowly work but it's honest and it will help pay the bills, but round here there is a shortage of cleaners still (to my amazement! there is no shortage of people queueing at the jobcentre...) and I often see positions advertised at Tesco's...
Keep trying - there IS work out there

property.advert

MrsTine wrote: »

...........Job hunt like never before... stop looking just in IT, look at what courses you can do for free too in the mean time - broaden your work possibilities as much as possible. If need be then try to find a cleaning job - I know it's lowly work but it's honest and it will help pay the bills, but round here there is a shortage of cleaners still (to my amazement! there is no shortage of people queueing at the jobcentre...) and I often see positions advertised at Tesco's...
Keep trying - there IS work out there

The problem is that UK benefits are so generous that these "lowly" jobs mean you actually lose money.

Get onto jobserve and set up google reader to fire new jobs into your path with queries you set up. Loads of IT stuff there.

MrsTinks

Not if you put in enough hours Round here cleaners charge £10 per hour - if you can get that by being unemployed then I'm seriously going to look at that! That's nearly £20k a year based on a 37.5 hour week before tax etc etc. Add in that you can do more hours than that and it's not that badly paid to be honest...

gilligansyle

MrsTine wrote: »

Not if you put in enough hours Round here cleaners charge £10 per hour - if you can get that by being unemployed then I'm seriously going to look at that!

No you definitely can't get that by being unemployed, but I know at least for me the issue is that I have PPI to cover my mortgage for a year. There will be a balance between getting any job and getting one that pays enough to cover the mortgage and give enough to live on.

To answer the OP though, how long have you had the finance? What is the balance on it. It sounds like you haven't had it long in which case it may be easier to cut your losses and let them take it back. Check National Debtline for advice.