Oh My God, Amex Just Killed Me

Running_man

If you sold your car cancel endowment and cable this would at least make you solvent.
Know you would not get back what you paid in on endowment but it would save you 13.00 per month >How long can you continue paying it with more going out than coming in.
PLUS whatever you do get back paid off your debt will reduce the 260.00 going out on interest every month.
House why can you not sell and buy one for say 120,000 instead of 150,000
Car >it is a luxury why not sell and save you money-in your soa no mention of petrol.Doesnt matter if old car just stops the outlay every month.Use a bike,walk etc wouldnt the excersise help with your depression?
Cable you dont really need this cost not fully covered by lodgers.

Think if you did these at least you would be solvent which in itself would reduce your stress levels.
Hope this helps

Robflh

I humbly apologize if my last post upset anyone but as I pointed out. I have suffered from depression all my adult life. Therefore, I know what signs to look out for, and how to cope with it. I also know when I can decrease the strength of my tablets and when I need to increase it.

For someone else in this situation that has never suffered from depression, OMG Amex just killed me, could be a true statement.

I chose those words very carefully, to point out just how serious this situation is or could be. To have someone belittle that upset me. To have someone tell me to, sit back and wait for my health to improve, when I am worrying because I can no longer meet my financial commitments, really upset me.

Anyhow, the basic problem is that anyone on benefits receives only enough money to barely make ends meet. I get the same amount of JSA as a 25 year old living at home with their parents but I am supposed to be able to run a house on that money.

So for the gas, electric, water, insurances and so on, I am supposed to pay for them with the same money as someone living with their parents. Anyone that has been in this situation will tell you the same thing, it is impossible not to get in to debt and that this debt will get bigger and bigger.

Once in gainfully employment, that debt can be paid back but if in my case, I never have another job, that debt will continue to get bigger and one day it will become unmanageable. The realization that I may never have another job, was my LIGHT BULB MOMENT or one of them.

Then next question was, how do I get rid of this debt. The only thing I have of any value is the house. The first option would be to the sell this house and buy a smaller property.

This would kill the debt and leave some money in the bank. Not too much or they will stop my benefit. However, I would still be on benefits and I would still not have enough to make ends meet. Once the money in the bank has gone, I would again acquire debts. The debts would get bigger and eventually I would be back in the same position I am now.

Remember, this is a worst-case scenario, in which I never have another job and will be on benefits for the rest of my life.

If the smaller property I buy has two bedrooms and not the three my current house has, I will only have one lodger and I will get back into debt a lot quicker. Never the less it is or was an option and one I could repeat several times.

Hi Lisa
thank you for your post. The first part of what I have just written is also the reason why it would not be a good idea to sell the house in its current condition. Selling it is not the problem the price I would get for it is. After selling it, I may only have enough money to buy a smaller property.

However, once again, it is an option and the whole point of doing this is to find out what my options are.

Getting someone to lend me money is not the problem, paying the monthly payments can be or would be.

When I lost my job, I had two unused credit cards and each one had a limit of about £1,200. After a few months, the limit on those cards increased automatically because I was using them. A while later they were combined to create the TSB Asset Advance credit card with a limit of £3,400. That card now has a limit of £6,400.

About three years ago, I applied for and got a standard Barclaycard with a limit of £6,000. With in a couple of month it was upgraded to a GOLD card. I have not mentioned this one before or quoted the debt on it and I will not mention it again, nor will I explain why. Please do not ask about it.

Before I had the Barclaycard, I obtained an RBS MasterCard and an RBS Visa card both had a limit of several thousand pounds. The visa card gradually went up to a limit of £7,000.

I got a Capital One credit card with 0% on transfers and a very low APR. I transferred all of the debt on the two RBS cards and stopped using them. Unfortunately, they both died because I was not using them. That was a loss of over £10,000 in available credit.

As it had the lowest APR, the Capital One became the card I would normally use. As the debt on it built up, I would transfer that debt to anther card at a balance transfer rate. By doing this I would reduce the amount of interest I was paying on that amount by at least 50%.

I applied for and got an Amex Platinum credit card with a £10,500 limit. When I first got it I had to ring them to confirm what the limit was, I thought I must be reading it wrong.

I now have five credit cards and I have gone from a total limit of 2,400 to a total limit of £33,700. What even I find amazing is that this has happened while I have been on benefits. Ie. no job and no salary.

Hi Running Man.

I think I just answered part of your post when I answered Lisa’s. As for the rest, as I have pointed out before the SOA does not included sundries, which can range from £10 for a haircut to several hundred pound to replace a major electrical appliance. Therefore, saving a few quid here and there will not make any difference.

Cashing in the endowment and paying it off the outstanding debt will not get rid of it and as the debt will continue to increase, I will only have delayed the inevitable.

I have thought of selling the car but not to pay anything off the debt. I was thinking of using it to pay for materials so I can finish renovating the house.

However, I am a volunteer driver for a charity in my hometown. For doing this I receive a mileage allowance of 40p per mile. This it to cover me for the wear & tear of my car, the petrol I am using and the depreciation of the car

Whether my car is sitting outside the front door or I am driving it for the charity, I still have to pay for the insurance, road tax and an MOT. If 95% of my driving is for the charity then the allowance I receive will pay for 95% of the running costs for the car. I think it actually covers all of it.

Because of the volunteer work I do four days a week, I have to get up and do something. People who have difficulty in using public transport or that do not have public transport in their area can join the transport scheme. The idea of the scheme is to get people out and about twice a week who would otherwise be staring at four walls seven days a week. I can personally say, that is not good for anyone’s mental health.

In reality, it does the same thing for me and the other drivers, most of who are retired. So, I would need to buy an old jalopy to be able to keep doing my volunteer driving.

The house prices are a bit of a misnomer, I think that is the right word. The important parts are firstly, I get the best price I can for my current home and secondly, I find the right property at the right price to renovate.

As I have two lodgers, it needs to be a three-bedroom house. It needs to be in my hometown and in the right area. There are areas in my hometown where nobody in their right mind would like to live. I am sure you have areas like that where you live.

If after expenses, the house I buy is £20,000 less then the price I get for my current house. My outstanding dept would drop from £27,500 to £7,500. This would leave me enough credit to spend £15,000 renovating the house I have bought and wipe another £20,000 of the £22,500 debt.

If I was lucky, it could be £50,000. This would allow me to pay off the £25,000 mortgage and pay £25,000 off the outstanding debt, which would leave me with £2,500 and I would be mortgage free.

I must go I have not had my dinner yet and if do not do it now I will not bother to do it and I need to make sure I eat properly.

I will try to make a post tomorrow entitled, Selling The House. It could be an interesting one to read.

beanielou

Are you on the list for a housing assocation house?
You would get extra points because of your health difficulties.
Do you get DLA? From what you are saying you should be getting at least low rate.
I know this is not what you want to hear but I think you should sell house, pay off your debts and get a rented property or buy a wee ond bed flat.
I wish you well.

briona

Hi Rob

I keep coming back to this thread and starting replies and then scrapping them. And while I'm sure other people can put the point across far more eloquently (and sensitively!) than I can, I still feel compelled to respond. And please be assured that this post is NOT intended to belittle you, upset you or add any further stress to your life.

The difficulty with posting on open forums lies in having to face up to other people's often seemingly harsh assessments of your situation. It is usually easier to "solve" other people's problems as opposed to your own, and frequently that's because you are so close to your own problems, you can no longer see the wood for the trees.

Reading your posts, I have found them to be quite defensive, which is a natural response to feeling under attack. But all anyone's tried to do here is give you advice – which you can take on board or ignore. You are in no way obliged to listen to any of us, but we are entitled to hold these views, whether you agree with them or not.

I appreciate that from the position of someone already suffering from depression, Amex's decision to reduce your credit limit will feel like "being kicked while you're already down" but to someone unconnected to the situation, it comes across as a possibly-late-but-better-than-never attempt to prevent you acquiring more debt that you are not really in a position to pay. And maybe one day you'll see that this is no bad thing as, to quote you, "it is impossible not to get into debt and that this debt will get bigger and bigger". Amex have attempted to prevent the situation from worsening, and on the plus side, they only reduced your limit by the unused amount on the card, NOT the already spent credit, which could have pushed you into serious over-limit fees.

You may only "get the same amount of JSA as a 25 year old living at home with their parents" BUT you have a house which, with only a £26,000 mortgage, MUST have some equity in it. Selling this could enable you to become debt free – a 25 year old living at home with their parents, and possibly in debt as well, does not have this option open to them.

Of course no one fully understands the complexities of your situation, anymore than you understand ours, hence, regardless of the advice you receive, you will be the one to decide what's best for you. Which is as it should be. The posts on here are just other people's opinions...

As with wherediditallgo, I don't think I shall post on this thread again, but I wish you all the best, whatever you decide to do.

Briona

Robflh

Hi briona

I agree with everything you have written except the following.

To someone unconnected to the situation, it comes across as a possibly-late-but-better-than-never attempt to prevent you acquiring more debt that you are not really in a position to pay.

May be I am not writing this properly and as I am dyslexic that could well be the case or may be you are not reading it correctly.

People, including me, have a terrible habit of reading or hearing something and completely ignoring what does not suit their opinion but focusing on anything that does agree with their opinion.

The last main job I had was in the QA department of a company. My supervisor would receive a letter complaining about a particular product. He would give the letter to me to make sense of it.

People write to you as though you know what they are taking about. If you do not know, then what they write can be very difficult to understand.

The first time I read a complaint letter, it would make no sense at all. The second time I read though it, I would know what they had written after the part I was reading. Now some of it made sense and because parts of it at the top made sense, parts of the letter further down, would also make sense. When I had carefully read the whole letter for the fourth, fifth or even sixth time, it would all make sense.

So, when reading a post, it maybe necessary to carefully read it more then once and read it with as little bias as possible. I am not being funny but read this careful and more then once if you need to.

Both you and wherediditallgo are raising the same point. Going deeper in to debt when my SOA clearly shows that I cannot make the minimum payments required with the debt I have now, would not be a good idea. I think that is what you are both trying to say.

I quite understand how you have arrived at this conclusion and if I were in you shoes, I would arrive at the same conclusion.

Now let us roll the clock back. I have just lost my job and I need to pay £150 every month for the loan I recently took out. I do not have enough cash to pay for my food, other bills and pay the £150.

To make it easy, let us say I pay £50 a week for my food. I buy my food with the credit card and put the £50 pound in my pocket. At the end of the month, I have £200 in my pocket. I use £150 to make my loan payment and pay £50 off the credit card. That is more then the minimum payment. I now have £150 on my credit card plus any interest but I have been able to make my loan payment.

Excluding the interest that will be added, at the end of each month the debt on the card will increase by £150. I can continue to do this for as long as I have credit available or as long as the minimum payment does not exceed £50.

Because I am using the card and paying more then the minimum payment each month, the limit on the card will go up and so will my credit rating.

I put £10 per week in the car but by paying for it with the credit card, I will have another £40 in my pocket each month. That means I will be able to make a total payment £90 a month.

If I have written this correctly, you should now start to see how this works.

Take another look at my SOA. In total, I pay £550 of which £260 goes in interest, which leaves £290 that will come off the balance. If two friends put £50 of petrol in their cars and I pay for it with my credit card, I would have an extra £100 in my pocket and I will be able to make the monthly payments. It would only leave me with £190 for food and other things but it would be an option.

If I still had the other £3,000 pound of credit, it would be a perfect option. I would have the money to finish off the house and sell it. I would also be able to make the increased payments each month.

Anyhow, the other part that I cannot get my head around or that you cannot, I not sure which it is. Is that I am going to sell the house in the next year, because of what amex has done there are no ifs or buts or maybes about it, the house will be sold to pay off the outstanding debt or as much of it as I can.

Therefore, what is so wrong about getting £3,000 deeper in debt, if I can then sell the house for £20,000 more? A £17,000 return on a £3,000 investment seems pretty good to me.

GettingThingsDone

Hi Rob,
you are gambling with other peoples money and your plan contains dependencies over which you have little control. As they say all plans need re-writing after first contact with the enemy.

Remember, if you use debt to fund these kind of plans then unless you have specific guarantees, credit facilities can change at the lender's whim. factor this into your new plan.

I think everybody understands exactly what you are trying to do. 100%.

What we are saying (from experience in some cases) is that there is a high likelihood of failure.

You may think there is little point drilling down into the minutia of your SOA but it is part of the lightbulb process. It may seem better to focus on the big picture but you've got to 'sweat the details'. Believe me - it helps. l think you need a moment of clarity.

Seriously, you are still in a good position to make some good decisions right now about your future. Re-read the posts you disagree with above; there is a lot of wisdom in them.

amani_2

Robflh hi, the only reason I am replying to this thread is on reading your last post it was exactly the way we were living while on benefits.

My hubby lost his job out of the blue and was unemployed for 2 years. We though he would find another job straighht away, but unfortunatly it took him 2 years March 2007 he started his new job which is only for 6 months but we hope it will be longer, or even become permenant.

We were living exactly the same as you paying for food and other bills on the credit card and making minimum payments, thinking we will pay it off in full when hubby got a job. We also managed to get a lot of CC's with high limits while unemployed and loans.

Now we owe £21,000 we had a LBM in febuary this year we called CCCs they adviced us and said a DMP would be suitable for us. It will take about 5yrs to clear, but the stress and strain has gone.

I know what its like struggling on benefits, we also have a 3 bedroom house and 4 children to support.

Why dont you give CCCs or PAYPLAN a call and talk to them they may be able to help you. Just thought that would give you another option.


AMANI XXX

Pooky

Can I just ask how long you think the renovation will take to complete. It's worth asking for a valuation on the property now, and what they think it will be worth when finished. Then look at your time scale and work out if the extra few grand on a renovated house is actually worth the constantly building interest on your cards and the actual cost of the renovation. What you want to get for the house when it's renovated and the reality might be 2 completely different things and worth knowing in advance so that you can make more accurate choices with your limited funds.

With interest rates continuing to rise and another forecast for this month, it might be worth getting sorted sooner rather than drag it on for a few more months.

mrsmortenharket

Rob, I too suffer with my mental health so I do know how hard it is & have every sympathy for you.

Lisa x

harpiegirl

I have read all posts with interest and while everyone has a justified point of view, everyone is different - some take risks, some are more careful.

There is no millionaire that has never taken a risk at some point - some you win some you lose. However the difference is the millionaire is the one who will persevere against what may seem impossible odds, where others will give up or think too risky. I think Robflh has the belief in himself to actually do what he thinks can be done but has become stuck and is looking for more ideas/alternatives.

I am not saying he is a millionaire in the making, nor am I saying he should give up and sell. I for one will be putting my thinking cap on, re-reading posts and hopefully come back with some other ideas.

Don't give in!