Settling debt before emigrating

Redbirds

I'm another longtime lurker on here, but this is my first post. It's pretty heavy going for a first post, but I would appreciate any info anyone could give.

My current situation is that I will be emigrating soon to be with my wife and son, who moved ahead of me a few months ago. I've remained in the UK to finalise visa plans (all done) and sell the house (still ongoing).

I have a fair bit of consumer debt (2 loans and 3 CC's) and at the time of our decision to emigrate the proceeds from the house sale would have covered this, leaving a small amount to go towards resettling. However, due to having to reduce the house price to encourage a sale, being made redundant (now have work but at a significantly lower rate of pay), unforseen expenses relating to my wife and son's move, and also my visa and asociated costs, the whole of the debt will no longer be covered. I figure that the sale will leave me with enough to pay about 40%.

At the moment I am just making enough to meet my repayments, something which was easy enough when we were both working full time, but getting more difficult. I have never deaulted on any form of credit, and was hoping to avoid doing so, but the longer I go without getting the house sold the worse this is going to get.

It's amazing how things can change over 6 months. As I had my house sold within a month of it going on the market last year, and for a good price, which would have had everything sorted, but unfortunately the sale fell through at the last minute, and then things spiralled!

My first backup plan was to use the sale proceeds to keep making monthly payments once I move, but I am concerned that once this runs out we may not be earning enough to keep making these payments. Therefore I was thinking of the possibility of offering a full and final settlement, but I beleive from reading on here that I would have to have defaulted on these debts and they would have to be passed onto debt collectors before I can do this?

I e-malied one of the debt help charities, and they seemed to think that the F&FS would be the best route, but I would greatly appreciate any info/advice/links from the community here.

Tixy

Hi

Where are you emigrating to?

F&F settlements are usually only achieved when the debts have been defaulted but as you are emigrating you might be able to use this as levarage to get them to accept.

An alternative might be to emigrate, default and then offer F&Fs from abroad.

What are the chances of you returning? within the next 6years?

I am correct in thinking you do not intend to go until your house is sold? I assume after that you wouldn't have any more UK assets?

Redbirds

I'm moving to the USA. I'm so used to everyone talking about it that I forgot to mention it! Our intention is to live there for good, but I'm trying to keep things right here so that there's no barriers to us returing should we have to.

Yes, I'm staying here to sell the house and then I'm off. It is the only UK asset I have.

alison999

Wow thats huge, where abouts are you moving to?

Have you informed your creditors that youre moving? They might already have a system in place to help you

Redbirds

I'll inform my creditors before I move, but I don't want to do anything now while I'm still able to make payments, although I'm not sure why that worries me.

The issue I have with moving and then offering settlements is that it would look like I'm doing a runner, when this move was very well planned over a few years and everything was reasonably in control until a very hectic 6-month period hit us. However, it looks like this could be the most viable option at the moment.

DVardysShadow

If your objective is to keep a clean slate here, then you need to pay the debt off entirely rather than go for F&F's - unless you can be sure to stay away for more than 6 years - because you will collect defaults.

A schedule of your debts {amount owing now, monthly minimum, APR and for a loan, date of last payment} would be useful to recommend exactly what to do.

I think you will need to pay some debt off entirely and retain some funds in the UK to maintain payments on the rest - and tip more funds into the pot from the USA as you are able, with the intention of paying off each debt in full and also maintaining payments on the remaining debts.

Redbirds

I think the idea of paying of some debts entirely with whatever proceeds I make for the house, followed by paying the rest off monthly after I move, would be my preferred choice. However a lot would depend on when I sell and how much I manage to get for it. There's also the possibility that the funds I keep to maintain my remaining payments run out before I secure employment, and I don't know if my payment protection would apply if I am no longer living here.

One thing I could do is shift as much stuff as possible to 0% or low rate balance transfers in the meantime, but there's no guarantee I'll get a card(s) with a sufficient limit.

However, I'd be interested in any info you have on how I'd approach the F&F scenario, as with so many unknown factors at the moment I can't rule this out.

Redbirds

I've been thinking of this further, and was wondering if the following sort and long term solutions would be viable.

My concern right now is that I'm working 2 temp jobs in the UK until I get my house sold and move to the USA. Both jobs are relatively secure, but the amount of work on offer varies. After arranging my single persons allowance with my council tax, and reducing all of my outgoings to the bare minimum, on a good month with regular work I will just make all of my payments and no more. Any deficit up until now was met with my redundancy payment, but this has now disappeared.

Therefore as my outgoings have been stripped down, and I know that I can't guarantee making all of my payments every month, is it feasible for me to negotiate reduced monthly payments for the time being? Would the loan and credit card companies even entertain this? One of my jobs is pretty set for the next few months and is guaranteed until I leave, therefore I was thinking about basing any repayments on the total pay from this job, and using the other pay to make lump sum payments here and there.

In the short term this would ensure that I don't default on any accounts, and ensure that the situation doesn't get any worse than it currently is. I could then resume regular payments once I have gained full time employment in the USA, or be able to make a decent F&FS if needs be. As confident as I am in getting work when I move, I was performing well in a pretty "secure" job until my redundancy, and making assumptions that "everything would be fine" is what got me in this mess in the first place!

DarkConvict

Even if they accept reduced monthly payments, these payments are below the minimum contractual amount signed up to and will likely automatically land you with late payment charges, more interest and potential defaults. DMP (debt management plans) are just about making below minimum payments to stay afloat and hope the creditors stop charges and interest.
However this will land you with late/no payment markers on your credit file and eventually defaults, if you want a clean slate you need to stay on or above minimum payments.