Debt problems snowballing

Lexy22

Hi, I hope someone can help me. I'm posting on behalf of my sister who is struggling to cope with debts of over £24,000. I;m not sure who the creditors are exactly but she has credit cards, loans, electric and water bills, her mortgage is in arrears and her overdraft is over limit.

She isnt paying any of the creditors at the moment apart from her water and electric and is trying to make up some of the mortgage arrears. She is getting lots of phone calls and letters from various companies asking her to pay them and its really stressing her out. She works full time and gets £19,000 a year.

whats the best way to go about sorting things out to get her back on a level again. Things seem to be snowballing at the moment with more and more charges being added

thanks for any advice you can offer.

Tixy

Hi and welcome

It sounds like things have got fairly critical so I would suggest she probably needs to contact one of the debt charities here -IMPORTANT - Where to seek professional impartial advice about your debts.

In addition to that it would probably really useful for you to help her complete a statement of affairs which will show her income, her essential outgoings and her debt details etc. http://www.makesenseofcards.com/soacalc.html - any of the charities would need to understand this same information to help advise her on the best course of action.

Does she know who she owes what to? or is just a mound of paperwork? if the latter then work through all the paperwork letters etc trying to sort out a pile for each debt and then arrange them in date order so you can see the most recent communication for each debt. Sometimes debts get sold from one agency to another so doing this will ensure she doesn't double count a debt.

Her priorities will need to be her priority debts, these are mortgage, council tax, and utilities etc. In terms of other loans and cards etc then she may need to just offer them a token payment whilst she clears the more important stuff. A token payment of even £1 is better than nothing as it shows a willingness to pay, even if she cannot afford more.

If she owes cards or loans to the same bank that her current account is with then she needs to set up a new one with another bank she doesn't owe money to (even with a poor credit rating she will be able to get a basic bank account) and arrange for her wages to be paid into that bank.

isy1011

Get her to post up a SOA see this link and we can see where savings can be made.
http://www.makesenseofcards.com/soacalc.html

david_hellier

Awaiting SOA

dancingfairy

Following on from Tixy's post if she owes money to the bank she banks with they can and will take money in the account (even if she speaks to them and tries to come to an agreement) and use it to pay off their credit cards/loans if they think she is struggling and she may need this money for her priority bills (ie mortgage)- this is why she should get a bank account away from anyone she owes money to ASAP.
df