How would you handle this ?

Falcon1_2

Hi,

Post a SOA, then everyone can give you more detailed advice. What caused you to get behind?

cottonhead

Thanks Falcon. There was a death in the family which meant using money meant for bills to go abroad where it happended. Then our boiler broke down.
Month to month I am managing OK and should have plenty spare its just I cant decide which to tackle first. Let both accounts continue to be in arrears for 3 months or so whilst I pay a bit to each or clear 1 straight away then tackle the next afterwards.

immoral_angeluk

If you're having problems paying back the payday loan and are paying that above your mortgage I'd suggest changing bank account and making a nominal offer towards the payday loan. That £260 could really be doing with going towards your mortgage...

DVardysShadow

Prioritites:
Roof over head - pay the mortgage first and get yourself no more than a month in arrears
Earning your money - pay the car hp if you have no other means of getting to work at least to no more than a month arrears
Restoring financial equilibrium - pay off the payday loan ASAP, then get other arrears sorted.

Maybe_Tomorrow

It sounds a bit mercenary but I'd put the repayments to your family at the bottom of the list of priorities. If you explain your situation to them would they allow you a bit longer to pay it back?

Oneday77

Mortgage and CT are priority payments and should be dealt with first.
As the car is over 1/3 paid, assuming its secured against the car, then any repossession has to go to court before they can take it. Check your paperwork. Halves to hand it back includes the initial deposit so if you've paid £1000 deposit on say a £10k car inc finance costs and then paid £4001 in repayments your entitled to hand back. This Is even though the payments are less than half he value borrowed. Although this may be detrimental to work etc.

As many mortgage lenders are in a duty of care mode just now. Go for a repayment schedule ie pay £100 extra a month. Make a car payment and kill the payday loan. Next month sort out the car and there after get the house back on track.

ju34514

Hi,

I would always say pay the mortgage first, have been through repossession myself many years ago and I was devastated. Everything had got on top of us and creditors were sending out nasty letters etc so we tried to keep them off our backs by paying them and not the mortgage as they were being 'patient'.

Suddenly we had the possession order and ended up losing the house. Please don't make the same mistake, mortgage first always.

Ju.:)

cottonhead

DvardysShadow - thanks for the advice. I am not thinking straight and needed it putted plain and simple which you did for me and ju34514 thanks for the advice there - yes the mortgage company seem to be the most patient but you are correct, if I loose the car I can cope, if we lost the house we couldnt and the mortgage being bigger is the hardest to catch up on. Oneday77 I will speak to the mortgage company again and see if I can come up with a repayment plan. I keep agreeing to large amounts I cant cope with but I guess a smaller amount and sticking to it is probably perferable at this stage. Thanks everyone I feel clearer about what to do and yes that nasty payday loan will eb gone asap. Will be glad to see the back of it and have learned from my mistake.

fatbelly

Oneday77 wrote: »

As many mortgage lenders are in a duty of care mode just now. Go for a repayment schedule ie pay £100 extra a month. Make a car payment and kill the payday loan. Next month sort out the car and there after get the house back on track.

Oneday is correct. If this went to court you would almost certainly get a suspended possession order requiring you to make the contractual payment plus X per month. The courts like X to be a figure that clears the arrears in 3 to 5 years but in extreme circumstances it can be a figure that clears the arrears over the remaining term of the loan (Cheltenham & Gloucester vs Norgan).

So don't let the lender pressurise you into unreasonably large payments that would result in other problems like arrears of Council Tax.

DVardysShadow

cottonhead wrote: »

I keep agreeing to large amounts I cant cope with but I guess a smaller amount and sticking to it is probably perferable at this stage.

Absolutely. The problem with agreeing to amounts that you cannot cope with is that you lose credibility. You might agree to £500/month just because you feel under pressure to comply. Resist the temptation. If you do comply and break the arrangement, you might make another for £350/month which you still break and then endup under pressure for £580/month, because you then have rolled up arrears from the time at £500/month. And break this too.

This leaves you in a position where if there was a repo, the lender could say to the court 'Cottonhead has had 3 arrangements, all of which have broken down'. And they would be right because you had agreed to it.

Whereas if you worked out for yourself that £80/month was all you could afford, offered that in writing and you stuck to it, they miht be in a difficult position to actually commence a repo, because they know that all they could say to the judge would be 'Cottonhead offered £80/month to the arrears and stuck to it'

You may feel that agreeing to impossible amounts is the best defence against the lender. It is not - it merely keeps them off your back on the day, while storing up more grief for later.