Scared to death - laid myself bare Please Help

Nickyj

Did you have PPI on any of your credit cards or loans? I managed to claim back just over £6000 on one loan which paid off a nice chunk. I'm no expert but just a thought. Good luck with everything!! xx

rising_from_the_ashes

monday_blues wrote: »

Hi ScottAnne sorry to hear of your predicament, but we are in the same boat! I too live in Scotland and just wanted to say that I am in the process of applying for a DAS, you can get this for free by contacting your local CAB, or local council, there are fee paying companies too but they must be approved - however I phoned one and they quoted £1,800 each for me and hubby - obv not going with that one. But a friend said she got hers for around £300 so must be big variances on costings. I am speaking to the CAB and from what I gather if you have equity in your home then it protects the equity as if the DAS is approved, the credit companies aren't allowed to charge interest or to take any further action against you.... but you must repay an agreed amount and be able to repay it within 10 years. That's the basics as I understand it.

ScottAnne wrote: »

After completing the Debt remedy questionnaire on CCCS, the end result was to enter into a DMP with our surplus £206 a month and after this was distributed amongst our debts it would be 13 long years before we become debt free. Although it does state that this is an unrealistic timescale as our situation could improve along the way.

When you go to the CCCS website, make sure you're on the Scottish bit of the site (link already provided by others). There is excellent advice on the DAS website (again already given).

Excellent advice from monday blues - the thing I like about DAS compared to DMP is that it guarantees that the interest will be frozen which is a big plus IMHO.

Best of luck

J_Tizzle

Just a quick point about "harrassing" telephone calls: it is very easy to stop these. There are template letters available on this site and National Debt Line's to ask them to contact you in writing only.

I started my DMP last April and intially was receiving a lot of 'phone calls, but after sending this letter to my creditors, they suddenly stopped and I've not heard a peep from them since. I also went through CCCS and can highly recommend them. They have been nothing but helpful and efficient and everything has run smoothly for me. I'm so much happier than I was a year ago!

thehappybutterfly

Hi Anne

Apologies in advance for the lengthy post!

My OH and I signed seperate Trust Deeds at the end of October 2011 which became Protected in December. Protected means that your creditors can't take any legal action against you to recover their money. They have to deal with your Insolvency Practioner which takes the pressure and stress away from you. It takes weeks for some of the more persistent companies to get the message but most of them go away.

The process for us started when I was trying to apply for a consolidation loan from the Credit Union (step away from the consolidation loan if you ever consider it!)

Once on their website, there was a link to see if you "qualify to have 70% of your debt written off". By this time I was desperate with nothing to lose so completed the form not expecting to hear anything. The next night I got a phonecall from a company (can't remember who) who said that I might qualify for a Trust Deed. They put me in touch with KPMG. After a series of phonecalls with KPMG, it was decided that a TD was the best option as we had very little equity and no other assets (our car is on contract purchase). To summarise, we have £32k of unsecured debt and we're paying £620 per month for 36 months.

It's stressful during the period of waiting to find out if you're protected or not but this rarely happens. An IP will not proceed with a TD if there was any possibility it wouldn't become Protected.

There's an excellent forum which I recommend which is specifically for folk already in or are considering a PTD. There are TD experts on there along with people like me who have just started right thru to people who have completed their PTD and have been discharged. If you're interested, please visit http://www.trust-deed.co.uk/. There is a page which tells you exactly what a PTD and a DAS entails and which one would be best for you. If you do have equity in your home, the chances are a DAS would be best as your assets are not taken into account. You pay as much as you can for a max 10 years and you're protected from your creditors.

You get a very generous budget on either of these options, it would appear much more generous than a DMP. This is to make sure that you have plenty of money for the bills, food, emergency fund, savings for big payments like insurance etc. If things are left too tight, you run the risk of needing to rely on credit again. If you have any unexpected changes to income or expenditure like a cut in hours or job change or perhaps a home emergency, you can reduce your payments or take a payment break (with permission from your IP of course). If this happens, your term will be extended as they are expecting a specific amount to be paid into the Trust Deed. Equally, if you're income goes up a significant amount, you're expected to make a fair (usually 50% of increase) increase to your payment.

We're in the early days yet but we've not regrets at all. We had a prang in the car a couple of weeks ago and had to pay a £200 excess which we would never have managed 4 months ago. Luckily we had some money in the emergency and car costs funds (which we've never had before!)

Good luck in whatever road you decide to take - there is always a solution to debt problems, however bad they are. I'll look out for your updates!

Firewalker

Hi ScottAnne, first things first; sit down, make a cup of tea and breath. Emotion and panic don't get you very far in personal finance.

Looking at your SOA one thing struck me: your childcare bill is only by about £100 lower than your pay. This tells me couple of things: 1) if you are in a career job you will need to do everything possible to get to work full time, get promoted or get another job so it is worth your while working; 2) If it is not a creer job you may consider giving it up, taking your children out of childcare and getting a weekend job that will pay more than the £100 you are left with now. Alternatively, you will have to find a way to get cheaper childcare.

Your food budget (the predicted one) is on the low side - food price has increased loads and for a family of four this is on the conservative side.

And you are on the right track - you need to increase your income; there are different options but getting second jobs is one of them. It will be hard for sometime but it is not impossible to do. Just keep calm and consider options rather than getting into self-hatred and blame.

Hope this helps
Firewalker

ScottAnne

Firewalker wrote: »

Hi ScottAnne, first things first; sit down, make a cup of tea and breath. Emotion and panic don't get you very far in personal finance.

Looking at your SOA one thing struck me: your childcare bill is only by about £100 lower than your pay. This tells me couple of things: 1) if you are in a career job you will need to do everything possible to get to work full time, get promoted or get another job so it is worth your while working; 2) If it is not a creer job you may consider giving it up, taking your children out of childcare and getting a weekend job that will pay more than the £100 you are left with now. Alternatively, you will have to find a way to get cheaper childcare.

Hi there,

Thanks for your reply. To respond to the above, I know it seems I will be working for £100 a month, I have been advised by CTC that the majority of my childcare costs will be covered but I am so dubious to believe this as when I returned to work following my first child it no where near covered the majority.

I have just had a promotion, god forbid if I hadn't.. I feel I should work and that the situation will be better once my eldest goes to pre school. I have a weekend job and estimated my income from that moderately but know once the easter holidays come it will be very busy and the offer of more hours will be available. I dont mind working all the hours under the sun as long as I make headway into clearing this mess up.

ScottAnne

TheHappyButterfly

You are so good, thank you for your lengthy reply and the website direction. I have been on and recieved some good advice so far.

It seems they think a DAS would suit which I am more inclined to go with too but I have a strong sense of trying to make a dent in this mess myself first before I actually go down that route.

Does that make any sense at all, sometimes I get so confused by all the figures I think, yes I can do this then something think that sounds so stupid..

Can I ask something, currently my children have 2000k of savings ( somehow through this madness I have managed to save that),should I use this to clear some of the debts myself??

Any thoughts?

thehappybutterfly

Hi Anne

Glad I could help

The general advice on here would be to use savings to pay debts as the interest you pay on debt is much higher than what you earn on savings. I can see why you'd be reluctant though - almost like your kids are paying your debt but they're not. I'm sure you'll pay it back before they go to Uni/buy a car/house!

Re making a dent in your debt before entering a repayment plan - my advice would be not to bother. If all you have in the way of surplus income is £206, there's not much of a difference you can make in a few months. However, based on the fact that you're confused about what Tax Credits you'll be getting, at this moment in time you don't have definitive figures on which to base your payment plan. Perhaps you should wait until you know for definite what you're getting then do an SOA with whatever firm you choose to manage your plan.

It's a scary decision and I felt like it was running away with me at first but the advice I got to my suggestion that "I think I'll wait until next month" was "Why? The debt is still going to be there next month but you'll have another month where you'll make the minimum payments on the credit cards but negate this by using the cards to pay for essentials". I'm glad I did it straight away because I'm not one for making (sensible) snap decisions and I reckon I'd still be dithering back and forward about whether to do it or not - all the while building up more and more debt.

mildred1978

ScottAnne wrote: »

I am currently on Maternity leave, returning to work next week.

Really? You now say you were accepted for voluntary redundancy in October 2011 and by the time you posted this you'd already had your employment terminated!

ScottAnne

mildred1978 wrote: »

Really? You now say you were accepted for voluntary redundancy in October 2011 and by the time you posted this you'd already had your employment terminated!

Hi Mildred1978

Not sure what your asking? Yes I was accepted for Vol Redundancy in October 2011 whilst on Maternity Leave and was fortunate to secure a new job in January, starting on 28th Feb.

If your query is to do with the gap between October and now, I was still in recepit of SMP from my employer until Mid Feb so technically still on Mat leave. As I say above, I was successful in gaining a better position and am due to start on Tuesday, in my eye's my maternity leave is over and i'm returning to work.

Im not sure what you mean?