large debts but payment will take forever!!!

mrsw1968

I have debts totaling £40k with 10 creditors. my monthly income is £2600, and my outgoings are £2400 leaving £200 for my creditors.
On the advice of the CAB i have contacted all creditors and have made arrangements to pay £1 per month as a short term measure until the £200 can be divided fairly between my creditors. my question is...what now? i cant see how i will ever befree of debt whilst payin such small amounts off these debts. my situation will not change and i am seriously considering bankruptcy as a way out of this situation.

Can anyone give me advice on what this would really mean? How long would i be paying bankrupty payments for? This is all very stressful and i cant see a way out.

Thanks in advance of your kind support

mrsw1968

e4rub

I would recommend that you get in touch with a debt help charity, such as CCCS. They are a non fee paying charity that will liase with all the companies you owe money to. They will go through your in-commings and outgoings and prioritise all essential payments ie rent/mortgage/gas/leccy/food/petrol etc.
They will then work out how much you have left out of your in-commings and spread this amount out between your debts.

Trust me, I have been on a debt management plan with CCCS for 18 months now and life is so much better. Less stress about money, no more phone calls from companies I owe money to.
My debts were just a little bit less than yours and I have managed to pay quite a chunk off them.
Give them a call, you never know, it might be the best thing you do xx

Mikeone

Hi, welcome to the forum!

You might want to look at reducing your outgoings and using some of the money from that to reduce your debts. With £2400 of regular outgoings there is probably some room to tighten things up to free up more cash.

Fill in the Statement of Affairs (SOA) at the link below, post the results here and people will help you to go through them.

http://www.makesenseofcards.com/soacalc.html

Good luck!

mrsw1968

Thanks for your advice...£1200 of my outgoings goes on mortgage payments and arrears, followed closely by £200 gas and electric and £150 Council tax plus arrears...i dont have any tv/internet package, dont drink or smoke...just realising how boring my life is!!!!....i have a car on hp which they wont take back which costs £225 per month..the rest is spent on water rates, tv licence, food, and the expense of having 2 children. my house...joint owned with my ex has been on the market for a few months now...there is £20k equity..to be split between us...i just hope it sells soon.

I will contact cccs...thanks again....mrsw

InDeepDebt

As mentioned previously, a statement of affairs would be good.

£200 for gas and electric seems steep. We are paying less now than we were two years ago by turning our stat down to the level that says (blummin' freezing). We're paying £88 a month (winter) and £60 (summer) where as two years ago we were paying over £100. I'm hoping to knock that down further when I put the loft insulation in (we've only got about 1" at the moment). If you don't have loft insulation then this is the only place where I've found 4" stuff (you can get subsidised 7" and 8" stuff at most DIY stores):

http://www.npower.com/Home/Energy-efficiency/Home-insulation/DIY-loft-insulation/index.htm

They're only half length rolls mind so check out price per square meter.

How long has your car got left on HP?

Are you on a water meter or rates?

How much do you spend on shopping and, where do you do your shopping? We got our monthly spend down from extortionate to only semi extortionate through the use of ALDI, LIDL and Iceland and then finishing off the shop at Tesco/Sainsburys.

After your mortgage it looks like you have £1200 (less energy of £200 and HP of £225 and coucil tax of £150). That leaves £625 (plus the £200 you have spare). Do an SOA and let's see if we can help you squeeze another £100 to pay stuff off quicker.

btw - what are you going to do once you sell the house? Are you planning on getting another mortgage or are you renting?

Jim

fatbelly

mrsw1968 wrote: »

I have debts totaling £40k with 10 creditors. my monthly income is £2600, and my outgoings are £2400 leaving £200 for my creditors.
On the advice of the CAB i have contacted all creditors and have made arrangements to pay £1 per month as a short term measure until the £200 can be divided fairly between my creditors. my question is...what now? i cant see how i will ever befree of debt whilst payin such small amounts off these debts. my situation will not change and i am seriously considering bankruptcy as a way out of this situation.

Can anyone give me advice on what this would really mean? How long would i be paying bankruptcy payments for? This is all very stressful and i cant see a way out.

Thanks in advance of your kind support

mrsw1968

Hi

I wouldn't consider bankruptcy at the moment because your situation WILL be changing soon. You will be in new accommodation, probably renting with a whole new set of outgoings.

I think now you have bitten the bullet and defaulted on your contractual payments, you should keep the token offers going for a bit - most creditors will be OK for a few months. That will give them the chance to pass the debts around and probably end up with debt collection agencies, who my be receptive to full & final offers in due course.

Although you may wish to take advice from other fee-free agencies (CCCS, Payplan, National Debtline) they are unlikely to advise any differently from CAB at this stage.

When you are in your new situation, maybe with a small lump sum, review everything again. Bankruptcy MAY be an option, and to answer your question, an Income Payment Agreement/Order lasts three years.

I would be looking to get out of that HP agreement though.

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