Good news...but need advice

pandaspot

I currently have just over 16k worth of debts, I had been with debt management company for several years but found that they were reguarly missing payments and making my credit really bad.

I decided a few months back to take on my creditors myself but I am struggling with repayments.

Now for the good bit! I remembered that a member of my family came into some money early this year and I have asked them if they could pay my debts and I pay them. Luckily they said yes! God the weight lifted from my shoulder. I wanted to cry when they said yes. I am so lucky, struggled for years with debt and now it's nearly gone.

My questions are:

1: I can't afford to pay my creditors this month. Should I contact them and tell them of the new situation and tell them that I can pay all debt off? ( won't get the money for a couple of months, hopefully before Xmas)

2: should I be able to get lower settlment figures? I know one debt with Robinson they often offer me a settlement figure which I have never been able to afford. Not sure where they thought I had 11k hidden away before lol.

3: how do I now rebuild credit? I have several defaults expiring over the next year and half

Any advice you can give about lump sum payments I would be very grateful! This is new ground for me

Hannah_10

Well I think the best thing to do for now is say "sod it" to what happens to your credit rating between now and christmas and resolve to fix it after that (there are articles on the main site about how rebuild bad credit) and for now not worry about it too much.

What we need in the mean time is a way of stalling them, or of lowering your repayments until the big payoff comes through. I am gonna say I think you should go for lower payments, rather than no payments. Three reasons, one- they will hate it and be even keener to take whatever poor little you can scrape together in F&F's (settlements), two- you wont get as many defaults (hopefully) and three- if God forbid there is a family emergency or something and that money is needed to fly a gravely ill person back from Australia or to undertake structural repairs to a house because a lorry hit it then you haven't ended up in paddless on lifes brownest creek!

To persuade them your circumstances have changed and you need to lower the payments whilst still keeping them sweet you'll need to post them something which shows your financial situation called a SOA, this link tells you everything you need to know about those... https://forums.moneysavingexpert.com/discussion/107280

Of course because you are a total angel and never ever do anything naughty you will want to show us your SOA too, just to make sure it hasn't got any mistakes in it and shows what you can really afford now... and not accidentally more or something... we wouldn't want that at all would we. :A The CCCS have guidelines for how much an average family need to live on too, as I said, you would hate to send them a SOA that wasn't right :A

You can do an SOA up now Hon, do so and get this process started, we need to try to get you in a sort of temporary hold-position sooner rather than later (to avoid nasty horrid defaults).

When you've got a SOA that you're happy shows what you can afford to pay then you calculate your repayments. That is dead simple, it basically means if you owe a creditor 27% of the total debt you owe then they get 27% of the total money available to repay. I find it's easy just to tack these on the end of the SOA too.

Last off you write a letter saying something like...

Dear Sir/Madam,

Re: Account Ref xxxxxxxxx

With regret, my circumstances have changed and I am no longer able to continue paying at the previously agreed rate. Please find enclosed a copy of my SOA, including a list of my creditors and a breakdown of repayments to each.

I am now able to afford to pay you £xx per month[or week].

Also please find enclosed my cheque/postal order for £xx as the first payment.

Yours faithfully

So you send these out to each creditor signed for. Some are gonna argue and refuse to accept it and blah blah blah... Totally and utterly take no notice, as if you're ignoring a toddler kicking off in Tesco. To all thsoe creditors who are pains in the !!!! send back another short sweet letter at the next payment time saying, "thank you for your letter of [date]. I can confirm that my circumstances have not changed. Please find enclosed another copy of my SOA, you will note it is unchanged, and a cheque for £xx dated £xx." You can use Postal Orders or cheques in someone elses name (write your reference on the back of them) ifyou prefer. It's all a game until the money comes in.

When all is looking a bit quieter on the Western Front and you have the money come back and we will look at how to offer the cheapest settlement for the kinds of debts you have. You may be surprised how far you can stretch it! That is a whole other topic though and this post is already very long!

pandaspot

Hi

thanks for your in depth reply . Below is my soa. I don't know the companies who are dealing with capital one and barclaycard debt as my debt management company dealt with it all and I have asked them for a statement of payments and creditors they were paying but they haven't bothered. That's how good they were (harrington brooks/all clear finance). I have also moved a coule of times, I have emailed barclays about debt, cause I didn't at the time know how much I owed and they never bothered replying to me, I also notified them of new address.

The only companies that seem to write to me are robinsons, capquest and littlewoods.

Just remembered I have a 3 mobile bill of £150 as well but on my credit file it looks like it's going to write off soon as last activity on it was 2005




Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1321
Partners monthly income after tax....... 400
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1721

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 107
Electricity............................. 35
Gas..................................... 80
Oil..................................... 0
Water rates............................. 38.45
Telephone (land line)................... 80.5
Mobile phone............................ 10
TV Licence.............................. 12.12
Satellite/Cable TV...................... 60
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 80
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 90
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 11.67
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 11.92
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 0
Mum..................................... 10
Savings for pensionable age............. 50
Ics..................................... 37.19
Total monthly expenses.................. 1488.85


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Robinson way...................13852.....0.........0
Littlewoods....................136.......0.........0
Capquest.......................553.......0.........0
Cl finance.....................83........0.........0
Barclays.......................984.......0.........0
Capital one....................537.......0.........0
Total unsecured debts..........16145.....0.........-


Monthly Budget Summary
Total monthly income.................... 1,721
Expenses (including HP & secured debts). 1,488.85
Available for debt repayments........... 232.15
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 232.15

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -16,145
Net Assets.............................. -16,145

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

twistedhazel

That's wonderful news that you have someone willing to lend you the money. You should make sure that you draw up an agreement for re-payment and stick to it. I think there is a thread somewhere about what can go wrong lending money to friends/family and you don't want to cause any ill feeling within your family.

When you say that the debt is nearly gone I think you mean that the pressure of dealing with so many creditors and doing your own DMP is nearly gone but it's still a big chunk to pay back so you really need to keep on track with everything you have been doing.

That said it must be wonderful to have that light at the end of the tunnel and if you can get some reduced F+F offers nearer the time you will be in a much better position. Hopefully it will be a nice start to 2011 for you :j