The end is in sight - or is it?

Firefly

For almost eight years I've struggled to keep my head above water after ex disappeared leaving me with huge debts (long story). Anyhow, he's long gone (and hasn't been seen since) so I've paid the morgage, chipped away at the debts - some with arrangements - and got a full time job.

We've survived! It's not been easy coping with three children a large morgage and no maintenance but my eldest has now been through university and we don't do so bad really. I guess if I am honest debt could have been reduced before but I've had to play a bit of a balancing act between actually living whilst reducing outgoings - after all the children are only children once and it's been all down to me. I know part of that is an excuse but I really did feel I had to strike a balance between depression and slight overspending. However, I've always paid everything I need to each month even though my O/D sometimes winces at the strain.

I've found out this weekend that I've got some inheritance and the cheque will arrive on Friday. :j It's enough to clear most, if not all of my debts if I plan carefully.

At the moment I have the following:

3 x 2k debts paid at £20 month each by arrangement
£1.5k loan
£3k credit cards
overdraft
£400 store cards
£1k legal aid repayment

My total outgoings for my debts are £280 per month.

I want to pay of my legal aid charge, my loan and see if I can make an arrangement to pay back part of my debts by arrangement (i.e. less than I actually owe) which might mean I have a bit to spare.

There are loads of things that need to be done to the house; new patio door so we can actually open it without lifting it out of the frame! car repairs, etc and I want to pay off my arrears on the electricity where due to recent increases the dd hasn't been sufficient to cover the bill.

How do I prioritise what I pay and would it be really wrong to have a bit of the money to spend on a holiday? We've never really had a holiday before and my youngest has only been abroad once (and that was a gift) so it would be nice to have a treat. Is that bad?

Then ... after I am debt free, how do you recommend I stay that way? I'm good at finding bargains, good at budgeting (even if I do tend to stretch it a little), but I could also be tempted. £280 is equivalent to a 25% increase in my salary!

With the end to a bad chapter in sight, I don't want to get this last hurdle wrong. Any advice?

CosmoCat

i don't have any advice as i'm at the beginning of my debt reduction journey. but just wanted to say that you've done so well and your story is incredibly inspirational. keep at it and remember the hard work you've done to get here, which would be motive enough not to get debt ridden again!

well done you

Broken_hearted

You need to pay your electric first. Maybe you could get a quote for the repairs and a new door then pay the rest off the debts. You can have a holiday next year with the money you have freed up out of your wages.

CLAPTON

can you give some more details

how much is the inheritance?

are the above all your debts

when you say 'by arrangement' does that mean you are on a DMP or what?

what are the APRs of the debts and are the loans flexible or what

what does the legal aid repayment involve?

have you defaulted on any of the debts? if so when approximately?

Firefly

can you give some more details Yes!

how much is the inheritance? 12k


are the above all your debts Yes!

when you say 'by arrangement' does that mean you are on a DMP or what? Not sure what a DMP is, but this is an 'arrangement' with the debt collection agency

what are the APRs of the debts and are the loans flexible or what Hmm not sure but think loans are not flexible and APR of c/c is 16.4%

what does the legal aid repayment involve? Payment of my divorce fees & settlement as the house was transferred into my sole name. Possibly 1k outstanding but it was 3k!

have you defaulted on any of the debts? if so when approximately? Only the 3 by arrangement and that was 7yrs ago approx at the onset of the 'problem'. I had no option, I wasn't working then.

Hope this helps! :cool:

beanielou

How does this sound?
Pay off electricity
Pay off loan
Pay off overdraft
Pay off credit card / store cards
Pay off legal aid cont
Some essential repairs to house
Try to get a full & final settlement for debts on reduced payments
Hopefully you will have something left over for a holiday fund at least and then you could pay in say £140 each month(This is only half of what you were paying to debt so gives you some extra)
Lucky you & well done on hard slog so far

Firefly

I've bit the bullet and contacted the debt collection agencies (Rockwell and Blair, Oliver and Scott) for my arranged payments.

I was a bit disappointed and even concerned as both places wanted to put me through to their mortgage service provider so I could discuss remortgage with them. I assured them that despite owning my own house I had a joint mortgage that I am under instruction from the court as part of my divorce settlement "to use my best endeavours" to remove ex from. I don't actually earn enough to have the mortgage I have at present, let alone change it around.

So - they've offered me the following:

1. Outstanding - 2340.07 will accept payment of 1775.05
2. Outstanding - 2473.15 will accept payment of 1854.86
3. Outstanding - 2101.09 will accept payment of 1700.00

All parties have informed me that partial payment only will remain on my credit file.

so - A) what effect does partial payment only have on my credit rating (incase I ever do get to change my mortgage)

Do you think these accepted payments will be flexible or is that IT?

I do hope I can sort something as I've been looking forward to being at the final hurdle.

beanielou

How did you approach Debt management co's? Take it left it flexible?
How much is the electric?
What about your OD?

Firefly

I simply phoned them up and said I "may" be in a position to consider settling and before I could go further they gave me the figures. I asked if they were negotiable but he said No then suggested I remortgage to cover.

My electric bill this month put me £175 in the red with Powergen (only due to rise in prices and reduction in DD after switch).

My O/D is OK but up to the max. If honest I'm not sure how much it costs me per month.

Annie_Fanny

Hi Firefly

Sorry I can't give specific help on your situation but I'm sure someone will be along soon to advise. Just thought it may help to look at this website and contact the peeps at National Debtline http://www.nationaldebtline.co.uk/england_wales/

As they state "The helpline that provides FREE CONFIDENTIAL and INDEPENDENT ADVICE on how to deal with debt problems."

Hopefully they will be able to advise on your question A) what effect does partial payment only have on my credit rating (incase I ever do get to change my mortgage)?

Obviously 12k is a lot of money and you will want to do the best you can with it in order to get rid off most of your debt.

Hope everything works out for you!

Good luck!

Annie

beanielou

If Ive added up ok then you could pay off everything apart from your OD and have £500 towards your holiday fund.
You could then save the money you paid to your debt for a few months to pay for things to your house.Good thing about that is that you dont get used to having that extra money to spend right away!!
Wonder if it would be worth trying debt mang co's again and saying well could pay £££ another couple of hundred under what they have said & see if they accept.Worth a try? I would if had £££ -better in your pocket rather than there's!