Can't pay back loans

millie.molly.mandy

I have three reasonably small loans, totalling less than £10k, they were taken out over three years, and have about two years left.
I have now lost my job, and am unable to meet the payments. I am 58, and whether I will get another job I don't know. The repayments are almost £400 pm. I had no PPI, so am now stumped.
I do not own my own home, and have no capital, I havn't spoken to the Companies yet, as I am unsure of how to approach it. I have calculated that I can probably pay about £100 pm, I don't want to avoid payment, but I don't quite know how to approach the issue.
Advice would be appreciated.

Tixy

You might want to speak to one of the debt advice charities for some help.

Or if you want to deal with it yourself then national debtline website is a really good source of information - you will find template letters on asking your creditors to accept pro-rata payments, that also ask them to consider freexing interest.

Do everything in writing - don't try to agree reduced payments by phone.
Are any of the loans with your current bank? if so then you will probably need to move to a new bank for future banking and have your income/benefits etc paid in to that to prevent them offsetting any funds in your account to their debt.

Good luck with the job hunt. Have you had a look at whether you could do some temping work whilst looking for a permanent job (depending on what you do for a living of course).

millie.molly.mandy

Thank you; the loans are with Santander and Sainsbury's Bank. I do have an account with Santander, but it has a nominal amount in it. My main account is with First Direct.
The company I worked for ceased trading, I wasn't sacked {Just thought I would point that out}. They made great allownaces for me, as I suffer with Osteo Arthritis, and had a lot of sick leave, I do struggle an awful lot to get around, I will have to get rid of my car as I can't afford to run it anymore, that will make public transport my only method of getting to work, which I would struggle with. I need to find local work, which I am checking out now.
What is the worst that can happen to me, such an embarrasing situation for someone who had a perfect credit rating.

Tixy

Oh I don't like to start with the very worse thing that could happen, as that always sounds scary, the good news is its very unlikely to happen.

The very worse thing that could theoretically happen - would be that one of your creditors could apply to make you bankrupt. But if you don't own a home and have little assets then that is very unlikely to happen, there would be no benefit to them.

Another possibility would be that they could take you to court to obtain a CCJ against you.

But what is far more likely, providing you keep them informed and pay what you can afford - is that they will register defaults on your credit file, and then accept your reduced monthly payments until your circumstances improve. As you will be on benefits there is a good chance they will agree to freeze interest, so your debts won't be growing, and will slowly go down.

Do you live alone? If your only income will be benefits are you sure you can afford £100 per month? That seems like a lot for someone on benefits - have you made sure you have budgeted for all costs/ outgoings over a year before you make them an offer?

If you think it is likely you will struggle to find any work that you are able to do with your health issues then you may want to talk to one of the debt charities about whether a DRO (debt relief order) would be suitable for you and whether you might qualify. It may feel like a drastic step but if there is no real chance you will be able to pay the loans off its something to think about.

IMPORTANT - Where to seek professional impartial advice about your debts

Apples2

millie.molly.mandy wrote: »

What is the worst that can happen to me, such an embarrasing situation for someone who had a perfect credit rating.

You aren't going to be publicly flogged for it.

They are unlikely to even discuss it until you fall into arrears where the debts pass to their "Recovery Dept" who can discuss lower payments.

It could go to Court for a CCJ

Not much else but you can only pay what you can afford. Even if it did go to Court a Judge will only instruct you to pay what you can demonstrate you can afford.

Be absolutley honest by filling out an SOA

This will help you understand what you can put toward your debt.

Call CCCS or Payplan for FREE help, never even discuss it with a fee paying ambulance chasing double-barrelled name bunch of scammers.

Your Credit Rating is history the day you fail a repayment. Don't worry about it, nothing you can do anyway apart from continue paying the contractual amounts.

Garage_Flower

Are any of the loans secured on anything?

Write to your creditors telling them everything that has happened and send in a copy of a letter stating you are no longer working or are in receipt of benefits. They will appreciate you telling them before they have to chase you and will more than likely make an arrangement for repayment that is suitable to your situation.

millie.molly.mandy

I got a minimum redundancy payment, which I have calculated to use as the £100pm until it is exhausted. I am at present waiting for my Job Seekers Allowance to be decided. I am not very up on benefits, so have no idea what I will get. I live alone, in a housing association property.
This is a shock to the system for me really, the girl at Job centre Plus seemed somewhat despondent about me getting another job.
I have a private pension, which she suggested I considered claiming now rather than later on.
It is difficult when you are clueless to these things. I am very grateful for all the advice from everyone on here, it is a great comfort to me.

opinions4u

Taking the pension now would almost certainly mean no entitlement to Job Seekers Allowance.

viv0147

you can have a debt relief order and the loans and any other debts will be wiped out up to about £15,000 it cost's about £90 and it will all be done for you

MHartley

I'm glad your osteo arthritis has cleared up sufficiently for you to start a new career as a police officer. Hopefully you can now afford the loan repayments.

samtoby

MHartley wrote: »

I'm glad your osteo arthritis has cleared up sufficiently for you to start a new career as a police officer. Hopefully you can now afford the loan repayments.

Thats impressive!