I've got £1000, I owe £6000, which ones to pay?

Hannah_10

I have got into debt because I got ill and didn't pay all the bills. I have just about got my life on track again now and I want to get debt free. I have been reading here for a little while, I hope you don't mind me asking for advice.

I am now on sick/disibility benefits, including housing benefit and council tax benefit so money is now going straight to pay the rent and council tax and I am in a position to start paying the rest of what I owe.

These are my debts...

Under control...
Rent arrears £778 (have provisionally agreed but not yet started repayments at £3 a week)
Water arrears £about 1000? (negotiating repayments direct from benefits- should not be a problem just not completed it yet)
Gas arrears £599.03 (agreed repayments through pre-payment meter at £5 a week to start soon)
Electric arrears £158.85 (repayments being taken from pre-payment meter at £5 a week for some time now)
My Sister £450 (she's mostly ignoring it for now but this to me is a top priority as she is no better off than I am really and I can't let things go bad between us over money)

Not under control
Council tax arrears £170.11 (not spoken to them yet)
Barclays Bank £2300 (from old overdraft years ago, been ignoring it for ages- might be unenforcible, will be looking into it)
Moorcroft £539.65 (Originally Orange- this is the only one currently adding up charges or getting any bigger)

Adds up to about £5995.64 of debt in total.

The good news is I've got £1051.71 as a lump sum that I can pay off one or more of these with in one go but I can't decide what's the best place to start.

I was thinking maybe pay council tax, Moorcroft/Orange and the remaining £341.95 to my sister to reduce my debt to her to £108.05?

What do you guys think is the best use for that lump sum? Should I pay the council, moorcroft and my sister or something else?

When I've put that £1051.71 to best use I can think about doing a SOA and making repayments on the rest of the debts (except the bank which I need to check for unenforcibility), but for now I would just like to do one thing at a time.

Thank you for reading and thank you in advance for any advice you can offer.

Hannah_10

nanto3girls

Good to hear you are now in a better position to start paying off some debt.I'm sure someone will be along to offer you better advice than i can.
Good luck with it.

jay1976

Hi and a big welcome to the forum. I was in the same situation i believe you have set out what you need to pay as a matter of urgency.
I like the way you have set out what you need to pay. The council tax is the most important in my opinion together with any debt that is increasing due to charges intrest ect.

hope this helps

DVardysShadow

Council tax, rent. Without a doubt.

amiehall

Okay if that were me, I'd pay off council tax arrears first as they're the ones with the power to do the nastiest things to you....

I'd then want to get rid of your Moorcroft debt if that's the one spiralling out of control although ONLY if you're sure your landlord is happy with your repayment programme and you're not facing eviction. If there's any doubt, your rent arrears should be next!

I would then put the rest towards the rent arrears but perhaps make a token payment to your sister of £100 if that would help her out? Keeping a roof over your head should be priority number 1!

MatyMoo

As most people are saying Council Tax is a priority debt so I would do that one first for sure.

I think it would be worth asking Moorcroft for a full and final settlement figure as most collection agencies will accept a lower amount - just make sure they mark your credit file as settled rather than partially settled and don't hand over any money until they confirm in writing. I would also be very careful about telling them you have come in to some money as they may want to know how much, maybe say a relative is prepared to lend/give it to you to help you out of the debt.

Locke

Sorry to tell you but you can't claim unenforceability with overdrafts.

Not sure about statute barred but that is 6 years.

Locke

MatyMoo wrote: »

As most people are saying Council Tax is a priority debt so I would do that one first for sure.

I think it would be worth asking Moorcroft for a full and final settlement figure as most collection agencies will accept a lower amount - just make sure they mark your credit file as settled rather than partially settled and don't hand over any money until they confirm in writing. I would also be very careful about telling them you have come in to some money as they may want to know how much, maybe say a relative is prepared to lend/give it to you to help you out of the debt.

Here's a template letter to send to Moorcroft, offer them something like 30% of the balance and negotiate from there.

http://www.nationaldebtline.co.uk/england_wales/temp/8211_99091.pdf

AGB863

With your water rates - see if the company have a charitable trust who may assist you with paying off the arrears.

In Walsall - the usual arrangement is a nominal payment between £1-3 per week and after 26 weeks the debt is usually cleared of for you.

[Deleted User]

If you haven't got your credit reports from the credit reference agencies, you should do this. This will help you find out when defaults went on etc

Priorities should be Council Tax, Rent, debt increasing with charges (but do as advised above and see what the full final settlement could be, and definately get it in writting before paying anyof that-you should be able to negotiate this down a bit).

If rent and moorcroft (as it's stated at the moment) are paid (£709) - this leaves you £341. Pay all, or at lest most off the rent arrears (maybe £100 to your sister if you think it'll help you out), but I'd definately recommend you at lest make a dent in your rent arrears - but if you think there's any risk of not being able to negotiate repayment over time, this and CT need to be the priorities.

Good luck

Hannah_10

Domino9 wrote: »

If rent and moorcroft (as it's stated at the moment) are paid (£709) - this leaves you £341.

I think you might have got rent and council tax mixed up?

The rent arrears are £778 alone. So rent and moorcroft comes to £1317.65 (which is £265.94 more than I actually have).

Did you mean that Council Tax plus Moorcroft makes £709.76? Coz yeah, paying the council tax arrears and moorcroft leaves £341.95.

Then did you mean put £241.95 to rent arrears and £100 to sister?