Best way to tackle my various debts?

WannabeDebtFree_4

I have various debts, but the most pressing are my credit card, overdraft, personal loan, and mortgage (incl mortgage arrears). All these debts are because of a 4-month period last year when I was out of work. Plus if I'm being honest, a bad case of sticking my head in the sand, hoping the seemingly insurmountable debts would just go away if I ignored them.

I'm wondering what the best way of tackling this debt would be?

My mortgage lender's taking me to County Court next month.
Presumably the court will only order me to pay what I can realistically afford.

As for the other debts, I have more that I need to pay out each month than I'm earning. What should I do? Write to the various lenders and see if they'll agree lower monthly repayments? If I do this through an organization like CCCS or National Debt Helpline, then do their counsellors contact the lenders on my behalf? Do they have more clout than I would acting as an individual?

If I try to switch my credit card to a 0% card will I get refused with all my arrears (and a Council Tax CCJ)?

CLAPTON

you need to post details of your income, spending and full debt details (i.e. debt amount, monthly payment and APR) (called an SOA)
also how much is the house worth and how much is the mortgage?

see this for more details
http://forums.moneysavingexpert.com/showthread.html?t=107280

If your mortgage lender is taking you to court because you are not paying your mortgage then this is very serious and you are liable to lose your house. if at all possible you must pay the mortgage and other priority debts (council tax, water, utilities) even if it means you pay nothing to your unsecured debts.
But post the SOA first and we'll be able to see the details.

skylight

Echo's of Clapton here.

Your priorities are to keep a roof over your head - so rent/mortgage/Council tax/utilities are the most important. Followed quickly by living expenses like tv licence/phone rentals/housekeeping/transport costs/insurances.

Unsecured debts can be shoved on the sideline TEMPORARILY!!! until you have sorted out the basics. Make sure you are on the best utilities deals, and home phone/mobile costs etc are battered down. This is where the suggestion of SOA comes in - people here can help you and show where we would consider a overspend.

A good budget is on the National debtline website. It has all your income and outgoings, then tackles your debts and allocates a payment for each one on a pro-rata basis to make it fair - paying creditors must always be fair - do not give one preferential treatment as this looks bad for any future action against you.

The same site also provides letter templates to tell creditors about your situation, making the offers and requesting the interest is frozen etc.

You can do this by yourself, or call Payplan or CCCS and do the same thing through them.

sean1970_2

Hi wannabedebtfree,
Some good advice above!
Absolutely top of the list is to contact your mortgage company to discuss putting in place an arrangement to pay your contractual payment plus an affordable amount towards the arrrears.

If your mortgage company is seeking to take you to court with a view to getting the house repossessed then you should not fear this. Often times court is the best place to obtain a Suspended Repossession Order based on repayment figures that are realistically affordable to you.

Not sure if CCCS and Payplan can help with this process but I know that Myvesta can assist in this area.

The National Debtline budget sheet (link below) is an excellent starting point to assess your income and expenditure so I would certainly recommend using this resource.

http://www.nationaldebtline.co.uk/england_wales/budget_sheet.php?country=england_wales

If you do get a court hearing date through you can either wait and attend the hearing or alternatively you can apply for an emergency hearing by completing and submitting Court form N244 (link below)

http://www.hmcourts-service.gov.uk/courtfinder/forms/n244_0400.pdf

You will be able to go before a judge and demonstrate that you have both the Willingness and Ability to come to a reasonable arrangement with your mortgage lender in respect of your mortgage arrears.

The exact process is explained in the link below:

http://bankruptcy.org.uk/faq/court-forms-%11-official-bankruptcy-forms/dealing-with-court-hearings-for-home-repossession-or-eviction.html

I hope this helps and good luck!

Best regards

Sean

Somerset

WannabeDebtFree wrote:

My mortgage lender's taking me to County Court next month.
Presumably the court will only order me to pay what I can realistically afford.

No that's not the way it works with mortgages. They'll need to see how you expect to pay monthly plus something toward arrears, or impending sale etc etc. With unsecured debts Court will only order you pay what you can, with repo proceedings you'll need to prove that you CAN and WILL pay monthly mortgage plus xx towards arrears each month.