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Oh My God, Amex Just Killed Me
Robflh
Posts: 328 Forumite
Where do I start?
A number of years ago, I lost my job. At the time, I knew nothing about the mortgage relief scheme, so I thought I was going to loose my recently purchased home as well as my job.
To start with, I had no money for my mortgage or a couple of loans. My bank took money out of my account on the wrong day to pay my mortgage and because there was not enough in the account, they put it back at the end of the day.
This resulted in their being insufficient funds in my account of two DD, which they charge me £17 each.
As you can imagine, it was a complete and total nightmare. I had/ have very little in the way of moral support and because of all the stress and strain, I had a nervous breakdown.
I tried to continue, thinking that a job would solve all my problems and I had one or two jobs over the next few years. Unfortunately, that is like trying to run with a broken leg, you are doing more harm then good.
After several relapses, I am now on Incapacity Benefit and getting the rest and relaxation I should have been getting from day one.
By the end of the first year, I had several thousand pounds on a credit card and over the years, this has risen to around £24,000, eventually I will run out of credit.
About eighteen months ago, I went from an endowment mortgage to a straight repayment one and in the process, I acquired over £6,000.
I used this money to pay lump sums off my credit cards and then I used the credit cards to pay for building materials to renovate my home.
The idea is to sell my renovated home and buy one in need of renovating. I can then use the profit I make from my current home to pay off several of my credit cards. When I have renovated and sold the next house, I will be debt free.
Until I received a letter from American Express, that was the idea. Unfortunately, in an effort to be more ethical when it comes to lending money, they have reduced my credit limit my £3,000.
I now do not have the money to finish renovating my home and because of the increasing interest payments nor do I have enough money to meet my financial commitments.
I have written to American Express to explain this to them but they refuse to change their decision.
At the moment I am at a complete loss as to what my next move should be and I am rapidly approaching another breakdown.
My options would seem to be an IVA or Bankruptcy.
A number of years ago, I lost my job. At the time, I knew nothing about the mortgage relief scheme, so I thought I was going to loose my recently purchased home as well as my job.
To start with, I had no money for my mortgage or a couple of loans. My bank took money out of my account on the wrong day to pay my mortgage and because there was not enough in the account, they put it back at the end of the day.
This resulted in their being insufficient funds in my account of two DD, which they charge me £17 each.
As you can imagine, it was a complete and total nightmare. I had/ have very little in the way of moral support and because of all the stress and strain, I had a nervous breakdown.
I tried to continue, thinking that a job would solve all my problems and I had one or two jobs over the next few years. Unfortunately, that is like trying to run with a broken leg, you are doing more harm then good.
After several relapses, I am now on Incapacity Benefit and getting the rest and relaxation I should have been getting from day one.
By the end of the first year, I had several thousand pounds on a credit card and over the years, this has risen to around £24,000, eventually I will run out of credit.
About eighteen months ago, I went from an endowment mortgage to a straight repayment one and in the process, I acquired over £6,000.
I used this money to pay lump sums off my credit cards and then I used the credit cards to pay for building materials to renovate my home.
The idea is to sell my renovated home and buy one in need of renovating. I can then use the profit I make from my current home to pay off several of my credit cards. When I have renovated and sold the next house, I will be debt free.
Until I received a letter from American Express, that was the idea. Unfortunately, in an effort to be more ethical when it comes to lending money, they have reduced my credit limit my £3,000.
I now do not have the money to finish renovating my home and because of the increasing interest payments nor do I have enough money to meet my financial commitments.
I have written to American Express to explain this to them but they refuse to change their decision.
At the moment I am at a complete loss as to what my next move should be and I am rapidly approaching another breakdown.
My options would seem to be an IVA or Bankruptcy.
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Comments
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((((((HUGS))))))
Welcome to the board
Why dont you post a SOA for us to look at before you look at IVA and bankruptcy.
Also check https://www.entitledto.com see if you are entiltled to more benefits.Isn't the knowledge that comes from experience more valuable than the knowledge that doesn't?0 -
So the card has gone from £24,000 to £3,000 that one hell of a drop. Hugs there has to be a way forward.Barclaycard 3800
Nothing to do but hibernate till spring
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INCOME
Benefit
355.12
Lodgers
460.00
Total
815.12
OUTGOINGS
Mortgage
80.00
Home Insurance 18.75
Water
42.00
TV License
10.96
Cabel TV
& Phone
85.00
Gas
24.00
Electric
38.00
Car Insurance
30.00
Road Tax
18.00
TV License
12.00
Endowment----13.00
Food
50.00
Sundries
100.00
Cards min
Payment
550.00----260.00
Total
973.71
The £550 is the minimum payments and is the killer. The £260 is the amount of interest, so in theory i can spend 290 on the cards each month.
The car insurance, food and the road tax can be paid for with the credit card.
Then of course lodgers are not the most reliable kind of income.0 -
how much is the house worth now and how much the mortgage?0
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Do you really need the Cable TV?
Could you downgrade to just Freeview and change your phone package to a basic one or one with free evenings and weekends??Aiming to be Debt free by October 2013
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The mortgage is £26,000, the house will be worth around £180,000 when I have finished renovating it and the house I buy will cost around £150,000.
However, I will need around 10 to 15k to renovate the next house.
Unfortunately, I need around £3,000 to finish renovating this house.
As I do not have a job, I cannot re mortgage the house and for the same reason I do not think I can get a loan secured against the house.0 -
I'm a bit confused. Is the £24,000 owed to just one credit card company (Amex), or spread across several? If it's spread across more than one, it would be useful to see what you owe on each one & the interest rates for each.
BSC #53 - "Never mistake activity for achievement."
Consumer Credit Counselling Service (CCCS)| National Debtline| Business Debtline| Find your local CAB0 -
Hi Rob
I don't know the full details of it, but I keep reading about AQA (Any Questions Asked) which is something that some DFWs do from home to earn extra income. I know that one former-MSEr, Oakdale_Minx, made loads from this when she did it on top of her day job.
Not much else I can think of right now, other than to send you my best wishes. Keep posting - more knowledgeable MSErs will be along shortly...£27k (excluding interest) paid off in 29 months
Finally debt free!0 -
wherediditallgo:
The total amount is spread over four cards.
Capital One
£6,500 @ 19%----Standard Rate---Limit 6.5K
American Express --£7,400 @ 18.4%--Standard Rate---Limit 7.5K
Lloyds TSB
£7,300 @ 6%
Transfer Rate---Limit 7.4K
Mint
£3,300 @ 3.9%--- Transfer Rate---Limit 3.3K
The important thing is that because of the reduction in my Amex card, the last £3,000 in the renovation budget, no longer exists.
Included in the budget was the money to keep me afloat until the house is sold.
salster
£85 for TV, Phone and broadband would seem to be a lot but each of the lodgers have cable in their rooms and to pay for it, the rent is a few quid more each week.
I do not smoke, drink or go out a lot so I think my broadband is a very reasonable expense.0 -
As your outgoings are £29 more than your monthly income then I think that reducing your outgoings would be your most pressing option - and Cable Tv should be the first to go; I'd rather get rid of cable TV if it helped me avoid bankruptcy - seems to be no contest in my eyes; or do your lodgers' higher rent cover the entire £85 cost?
Have you tried to negotiate a lower interest rate with the mortgage company, Capital one and Amex? What about reclaiming your bank charges (not an immediate relief but worth a punt).
Also, might it be worth just cutting your losses and selling the house as it is? Sorry if I'm being a bit naive, but £150k seems a lot to spend on a house that needs another £15k spent on renovating it; are there any cheaper houses in your area? Maybe a new-build starter home, there are often discounts available and no renovation is needed (plus resale can be easier). Maybe you could consider renting your next home as an option in the short term - if you're already on benefits then you may be eligible for housing benefit - in fact, I've just noticed that you haven't listed Council tax as an outgoing on your SOA - is this paid as part of your benefits or did you forget to include it?0
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