How would you handle this ?

cottonhead

I am behind with the mortgage and car payments. Have explained this to the company who are getting fed up with me now! Have been behind for a few months on the mortgage and 2 on the car. I explained my problems to them and they argreed I could make it up the following month. Trouble is I have already promised to catch up and then havent - several times over - as things keep cropping up that prevent me.

I am due on the 1st to pay £1200 arrears plus £581 normal payment on the mortgage and £309 on the car to get it up to date. But I have an income of only £2060. I plan not to pay any other bills
( they are all up to date ) but I have to pay council tax £114 , £260 payday loan ( I know - I cant wait to get rid of it) and £150 loan to family. I'm not sure who - mortgage or car - to pay first and how much. I worry they will start sendig formal demands as I have broken previous agreements. Is it best to get 1 fully up to date then that leaves just 1 company to deal with? Thanks in advance.

immoral_angeluk

Is your car hire purchase? How long left on the payday loan? They shouldn't be priority but things tend to spiral if you don't pay them so it's a difficult one.

You mortgage should ALWAYS be top priority.

yellowcrocus

I am not as knowledgeable as many on this board but my first reaction is pay the mortgage first, always. If the car gets repossessed, that's not so bad. Losing your home surely is the worst possible outcome and should be avoided at all costs!

Good luck.

lamarsi

I would always say mortgage first, have you tried asking for a re-payment plan? when I was behind a few years ago, I use to phone and promise I would pay everything the next month then fail, oneday the woman on the other end of the phone said, if you can't pay it just say and we'll make a payment plan you can stick to which I did...I understand it's embarrassing but I doubt if they are getting fed up with you, after all it's just a job to the people your dealing with, and often a not very well paid one good luck

cottonhead

Thanks for the advice. I was starting to think along the lines of making sure the mortgage is up to date first. Being the bigger payment its hard to catch up once it slips. I worry about not paying the car though as they seemed quite adament that it has to be brought up to date or action will be taken. However I might add that they allowed me 2 months to clear the debt and when it happended before they allowed 3. I regret that stupid payday loan - would have an extra £260 to help repay these bills.....

RAS

cottonhead

Please can you answer immoral angel's questions? They are important.

I would also suggest a few other tactics

1. Put a Statement of Affairs up on here and we may be able to help you find some extra money.
2. Go over to the Money Saving Oldstyle forum and do a store cupboard challenge - how to eat from what you have with the least money spent this month.
3. Go round the house and identify things you no longer use. Do a car boot sale, put stuff on amazon or e-bay.

cottonhead

Thanks all.
In response to Immoral angel ( apologies I wasnt ignoring your questions just cant think straight as this situation is bothering me ) Yes the car is on HP and has 3 years left to run. The payday loan is a tricky one. I am up to date as far as rolling over as dont want to default on it but the stupid thing is £1100 in total so the only way is to pay it back and take out a slightly smaller one each month and so on until its gone. Will be soooooo happy when its finally gone.
I dont think I can save any more money next month as I have already decided not to pay any other bills ( other than council tax and the loan to family ). I think maybe trying to get the mortgage up to date is the priority and then just plead with the car finance people one last time. It gets harder to make that phone call each time I ask for an extension.

RAS

cottonhead wrote: »

Yes the car is on HP and has 3 years left to run.

Please

How many payments was it for in the first instance and how many have you paid?

Do you have the terms and conditions?

Usually you can return the car at no extra cost after you have paid half the payments but you need to check this.

It might be cheaper to get rid of the car and to get a wee run around for a while?

theoretica

Debtors really hate it when you pay nothing towards your debt. I would urge you to pay something to all your bills- even if just £1 this month, and something to the car even if that means leaving a little bit of the mortgage for next month.

cottonhead

Thanks RAS. Have paid for 2 1/2 years and have 3 left. Have checked and can't hand it back. I'm not sure its got to that stage yet though. Unless I am not as worried as I should be. I guess if I am honest I am not really ultra stressed about the car because its 2 payments of £309 ( including the normal monthly payment) and its all up to date. Its just combined with the mortgage arrears I don't know which to tackle first.

cottonhead

Thanks theoretica. Yes I see your point. I figure the other bills dont matter so much as I can pay them when they are due next ( water, gas , electric etc) . On balance I think the mortage people seem to be the most patient so want to pay the car first and if I have to carry some extra on the mortgage so be it. Will need to take a serious deep breath to ask for another agreement. Then I think no, the mortgage is priority. I am still undecided !