secured loan-token payment?

dumb_blonde

Hi everyone,
I have a secured loan which the insurance has been paying the monthly payments.I also have two other unsecured loans that i pay a token payment of £1 per month.My question is,now that the insurance cover has finished do i now offer the secured loan people a token payment of £1 per month.I cant afford anymore but if i take some money out of my food budget to pay a higher amount,will this be classed as preferential treatment towards one creditor before the others??
Thanks x

Tubbss

Hi,

The secured loan will be classed as a priority debt so no cause for concern, however, if you are paying out of your food budget I would suggest you seek advice from CCCS as none payment on a secured loan could haver serious consequenses.

dumb_blonde

thanks for the reply,do you think the secured loan will accept a token pound payment?The CAB helped me when i first sorted everything out but they more or less want you to get on with it yourself after that,unless you get a court summons.I tried to discuss this with the loan company but they wouldnt talk to me about it as we are not yet in arrears(will be at the end of this month)nice start to the New Year:(

Tubbss

Hi,
Depends on how long you will be making token payment for and how they manage secured loan arrears - so accepting an offer of £1 per month - short term perhaps, long term no! They may be able to restructure the loan to reduce payments but eventually, unless you can resume payments, they may take action to recover the debt, and as this is a secured loan..........

Rafter

It all depends on how much your house is worth too. If the secured loan company think they will get more money back by getting your home repossessed sooner then they are unlikely to accept token payments. If you can demonstrate that you can improve your income and start making higher payments soon, they might rethink.

You should really take some further advice from citizens advice, cccs or national debtline about your situation though.

R.