Oh My God, Amex Just Killed Me

wisbech_lad

Problem is, you no longer have the 3,000 pounds credit you need do you? And it is unlikely you will get it from another credit card, or from a mortgage provider

So, you need another plan. Whether that be downsize without finishing your house, or go talk to CAB/ CCCS on entering a debt management plan with your creditors.

Personally I would go for the latter. I think there is a good chance that you can get interest frozen. This should then free up enough cash (especially if you are careful, and reduce spending as some suggest) to complete the renovation, but at a slower pace.

Not sure that using emotional blackmail of telling us all the ways you could top yourself is very constructive, it will put people off replying to you, in case you get upset at their advice.

QuestionMan

Having just read your posts, one thing I find quite astounding, and perhaps this is just me..
You are receiving a lot of money every month in rent from your lodgers, and receive a full council tax benefit - are you declaring all your income to the relevant government agencies??

Robflh

Thank you all for you posts especially the ones form amani, mrsmortenharket, harpiegirl and wisbech_lad

A double thank you to harpiegirl and amani. Until I read your posts this morning, I was getting very disheartened. I can hounestly say, your posts brought a tear to my eye. In my current situation, I get sentimental over the most stupid of things, not that I am saying your posts are stupid. I would also like to give an extra thanks to wisbech_lad.

Hi amani
I was beginning to think that I was the only person in the whole world, that has found themselves in this situation.

I do hope that job becomes a permanent one for your husband. The last thing you need now is for him to be out of work again for another two years.

Assuming you had no debt or little debt before your husband lost his job. That would be £21k in two years, £31.5k in three years, £42k in four and so on. I am not criticizing, I am just pointing out to other people that are reading these posts, just how fast and how deep you can get into debt, if you are living on benefits.

It has taken me over twelve years to build up a debt of £18,000 but then I do not have children, I wish I did and I am not getting any younger. I was also able to rent out two rooms, which you and your husband could not do.

If I had not started the renovation project or had a reduction in my amex card it would have taken me another eight years to reach the point where I would run put of credit and have to sell the house.

If you do not mind me asking, how long did it take before you realized you was spiralling in to debt and tried to slow it down. From what I have read and heard about these things, it takes a period of time before people put the brakes on.

Thank you for the suggestions but as I explained yesterday, people write things expecting you to know what they are talking about. Can you tell me what a LBM is, what or who is CCCs and PAYPLAN. What do they do and how do I contact them, by phone, email or website?

I am presuming that DMP stands for a Debt Management Plan. This may also be called an Informal Debt Repayment Plan.

For this, you agree with your creditors to pay an amount each month for five years. In return, they will reduce or even freeze the interest you are paying on the outstanding debt.

On my computer, I have a letter ready to print out and send to my creditors. It explains what has happened and asks them for their help. It asks them to freeze the interest on my credit cards or if possible to freeze my cards for the next six months.

If that were possible, it would give me the money I need to finish renovating the house and put it on the market. What I am not sure about, is how this will affect my credit rating. I will need to use the credit cards to renovate the property I buy and if I can no longer get credit, I will not be able to do that.

If it were not possible for you and your husband to clear the debt in five years and he is working, an IVA (Individual Voluntary Agreement) would have been an alternative.

You have to do this through an Insolvency Practitioner and it is a formal agreement between you and your creditors. The IP works out with you and your creditors what you can comfortable afford to pay each month for five years. If you have a home that you wish to keep, it will be six years. At the end of that time the outstanding debt will be written off, in other words you will owe nothing.

The adverts for this claim to be able to reduce the debt by up to 80% but I think that only happens in very, very rare cases. Someone I know that actually has one, will have 55% of their £32,000 debt written off, once the 60 payments have been made.

Hi Pooky
That is a very good question and I should have put that in a post sometime ago. The renovation work is almost finished. It was due to be completed in the next three months but the house would not then be put on the market. I first have to find a suitable property to buy and then I can put mine on the market for around a £180,000. Well that is what I have been told it will be worth.

I have another post already done and it should answer the other points you have raised but before I post it I need to check it a few hundred times more, in a vain attempt to find all the errors in it.

Hi harpiegirl
I am sorry to disappoint you but the house has to go. I made that decision when I started the renovation work. Unless that is I win the lottery tonight, in which case it will be you and me in Paris for a slap up meal. A paper bag over each of our heads and we will be well a way. I will leave you to decide if it is in case my paper bag falls off or yours.

OMG, I got my sense of humour back, strictly speaking I have never lost it, thank god. As they say, laughter is the best medicine. It just does not seem right to use it here and I HATE being serious.

Anyhow, it does not matter what I do, remember worst-case scenario no job, and benefit rest of life blah, blah, blah, one day I will have to sell the house. I maybe able to delay it for a while but there is no way to get round it. The house must go and what I am trying to do is to make sure I get the best possible price for it.

You are quite right Amex has put an obstacle in my way and the whole reason for starting this thread is to see if anyone can come up with a way to get round it. There must be a way round it, it is just a question of finding it.

Hi GettingThingsDone
Whether the debt is £10k, £20k or even 30k it will be paid off when I sell this house and buy another property. Whether that is a smaller property or one that I can renovate will make very little difference.

Going £3,000 deeper it to debt, to finish the house will net me an additional £17,000 when I sell the house. I.e. I will get £20,000 more if I sell a finished house then I will if I sell it now.

As for being able to make the extra payments, when I am already having difficulty in making the minimum payments, that is not a problem. Trust me, there are ways and means that would enable me to make the current minimum payments each month.

However, for simplicity let us ignore that fact and let us also say that I go to a loan company and they lend me the £3,000 secured against the house. I now have the money I need to finish the house. Remember, part of the £3,000 was to keep me afloat until the house is sold.

According to the budget, it would cost less than £2,000 to finish the house and that leaves over £1,000 in my pocket. Where did I put that leaflet, are there it is. £5,000 over 60 months is £102 so divide that by five and multiple it by three.

A £3,000 pound loan is £61.20 a month, that does not include the payment protection insurance, 1000 divide by 61.2 equals 16.334. I would be able to make the payments on the loan for 16 months and the house would be sold in less then 12 months.

Now that is what I call an option. I have been trying not to write something like that, because people will look at it and think that they no longer need to come up with an idea of their own and their Idea could be so much better then my one.

Hi wisbech_lad
I think I may already have answered the points you have raised.

Hi QuestionMan
Sooner or later someone was going to ask that question and it might as well be you.

Yes, they do know about them and after all this time on benefits, I have learned a thing or two.

katepnlo

what do you have left to do on your house for 3k that will...hopefully make you? i think the other posters idea of getting valuation now and asking how much this extra 3k will put on your property?

I don't think you have fully had your lightbulb momentkate

GettingThingsDone

rob - put your house on the market now, and see if people will pay near the full price i.e. can you convince them that they only need to spend a couple of grand to finish it off. That way you're effectively getting them to borrow the money for you.

amani_2

Hi, yes a DMP does mean debt management plan. CCCs and PAYPLAN are charities that help people for free to sort out their debt. You can visit their websites. Doing a DMP will affect your credit rating, but I dont want any more credit after this. LBM means lightbulb moment, which is the time when you realize the debt needs sorting out once and for all.

We had some debt before my hubby lost his job, but more built up after unemployment, We did not buy big expensive things just every day basics, clothes and shoes for the kids, food. We ended up in a situation where we would have to take from the credit cards to pay for the minimum payment on others. I would say it built up over a period of 4yrs. after 2yrs unemployment we could not go on living like this, thats when I came on to this site and read about DMP's. I was like you going to write to the creditors and ask for them to take reduced payments for 6 months. National debt line are also a very good website to look at, they have a lot of templet letters you can use to send to your creditors.

HOPE THIS IS SOME USE TO YOU


AMANI XXX

kathy206

Hi Rob
I have read all the posts on this thread with interest, and felt compelled to reply. I get the impression that you have a big "vision" for your house, in order for you to become solvent again, however I am concerned that you just can't see the big picture. If you have so much equity in your property then why not sell, (as many others have suggested) in the current state it's in and start with a completely clean slate. Surely this is more beneficial to your overall mental health (no stress of renovation,+ better financial position, = peace of mind...) I understand you may feel you are being attacked and you are not getting the answers you want to hear but surely it's better for people to be honest with you. By the way I have considerable experience of mental health issues through my job and also in dealing with close family members living with serious mental health problems. Hopefully you can find your way, lots of luck Kathyx

noyk

You write in detail and with clarity, you seem to have thought things through and understand (if not always agreeing) with what people are saying, so you are clearly intelligent. I have two main points:

1) Your credit is drying up, BUT you are in a good position with the equity in your house.

2) I think your focusing to much on the house doing-up thing.

Why don't you go and try and get a job again, does the breakdown mean you can never work again? If you set out with a positive mindset i'm sure you would do well.

Robflh

Hi All

While I have been writing/reviewing this post a few more people have posted, I will try to answer the points they have raised tomorrow. This one addresses points that have already been made, so I am going to post this one first.

I am sorry if my posts are on the long side but I am trying to address points that have been raised in a why that everyone can understand why I am trying to do what I am and why I do not wish to do it a different way, unless that is I have no other options left.

It may also be due to me putting in too much information but I would rather have too much then not ehough.

For the first few years after I had lost my job, I thought it was only a matter of time before I would have another job and I would then be able to pay off the debt in a couple of years.

My first LBM (Light Bulb Moment) was realising that I could not pay the £150 a month for my loan. I explained this to my bank and asked them if I could redo my loan over a longer period of time, so that I would only be paying £50 a month. I was told that I could not have a loan if I did not have a job. During the re mortgage, I found out that was not necessarily the case.

That was when I first started to us my credit cards (CC’s) to pay for things I would have paid for with cash. At the end of the month, I would use the cash to make the loan payment and pay something off the card

When I said before about getting petrol on the CC I should have said that as the total CC payment I was making had gone from £50 to £90, I could continue to add £150 a month to the CC until either I run out of credit or the minimum payment is more then £90.

Paying £500 a month means I could carry on adding debt to my CC’s and it would be some years before I would run out of credit or have minimum payments totalling more then £500.

Remember all this is based on the assumption that a Job will come long sooner or later. As the debt increased, my next LBM was that it might take a lot longer then two years to pay off this debt. As time went by and the debt became even bigger, my next LBM told me I would need more then just a loan to pay off the debt. That would be a DMP and in the last couple of years, IVA’s have been brought to people’s attention.

In the first few years of being unemployed, I did have few jobs. For one reason or another, they did not last very long and the last one caused me to have a relapse. The jobcentre had already caused me to have a relapse once and later on, they would do it again.

There is always one, that is a stickler for the rules and she got my JSA suspended for six months. No JSA means, no mortgage relief money, which in turn means I would get in to trouble with my mortgage lender and could even loose my home. That freaked me out so much that my doctor signed me off sick for several months.

The second time the jobcentre caused me to have a relapse. I filled out the forms for incapacity benefit but this time I put down everything and they signed me off for a year. Believe me, the feeling of relief I got from knowing I would not have to sign on again for a whole year was tremendous.

Anyhow, for a long time, I have always known that I might, sometime in the future, have to sell my home. I was sitting in the jobcentre one day, when a man came in. He was a lot older then me. He asked the receptionist if he could see someone and she asked him why. He told her that he had been out of work for the last few years and that because of the debt he now had, he needed to sell his home.

I sat there thinking to myself that will be me in a few years time, another LBM. That was the first time I allowed myself to think that I may no get another job and that I will then have to sell my home. However, selling and buying property is its self a very stressful thing to do. I can never remember if it is that or bereavement that is the most stressful.

As I stated in a previous post, if I buy a smaller property and pay off the CC’s, I will still be on benefits. That means I will still get into debt again and that debt will grow and grow until I have to sell my smaller property and buy an even smaller property to pay off the debt again. Once I am on that slippery slope I am going to slide down and down and down. That is enough to freak out anybody.

So, rightly or wrongly I have been hanging on to that little bit of hope that is left in case something changes and I will not have to sell my home. As long as I have credit I can use to bail me out each month, I can hold on to that little bit of hope.

Then the re mortgage gave me £6,500 in my grubby little hands, with other money I could lay my hands on and the available credit I did have, I would be able to tart up my home. If I have to sell my home, I might as well get the maximum price I can for it.

As two people have now asked for this information, here it is.
I did my research and by adding a small extension to the front of the house, I would extend the utility room and give it its own entrance from the hallway. Before I did this, I had to walk from the hallway through the lounge/dinner, through the kitchen and then go in to the utility room. I was told that the increase in the price of the house would be at least twice the amount it will cost to do it. As I did most of the work myself and my labour costs nothing, it will be more then twice the amount.

The kitchen looked out of date and the cupboard space was limited. The boiler was so old it was almost an antique and I think the cooker is an antique. Kitchens are never a cheap room to renovate. A new kitchen can cost £20,000 pound but my one including a new, built under gas cooker, ceramic hob, cooker hood and a high efficiency boiler cost me around £6,000. Over a third of that was the cost of the boiler and paying to have it fitted.

That if I say so myself, is not a bad price for a new kitchen with over 50% more cupboard space. Most of that is because the doorway between the kitchen and the utility room has been bricked up and this gave me most of another wall that I could use for more cupboards.

I had difficulty in finding out how much this would add to the value of the house. Some said twice what it costs and others said triple. One even said quadruple the cost. Whichever it is, the price of the house will rise by more then it cost to do the kitchen.

The other weekend my neighbour helped me to put in my new door, which is more of an entranceway. The old one had a door on one side and a large panel on the other side. The large panel and the door were split into three with a big double glazed sealed unit at the top and bottom and a small wooden one in the middle. Mine also had a wooden panel all the way across the top but some people have a sealed unit. It had no five-point locking and one of the sealed units has failed.

The new entranceway has the door in the middle with a panel either side of it. Both the side panels and the door have a plastic raised panel in the bottom half of them and a sealed unit in the top half. Above the door, there is a small sealed unit and above either of the side panels, there is a smaller seal unit. All the sealed units are in a Georgian style. It makes this house the best-looking house in the whole street.

Double glazed widows have no effect on the price of a house but as I understand it whatever the door costs, I will get the money back when I sell the house. I also had to put in a new backdoor, which is in the same style as the front door.

That is all the major expenses. I still need to buy floor and wall tiles for the kitchen. Coving for the downstairs ceilings and flooring for the lounge/dinner and the utility room. A bit of architrave and skirting board here and their and the downstairs area will be ready for painting.

Upstairs, two of the bedrooms, the landing, and the stairs need to have nothing done to them. The toilet needs a good cleaning and the soil pipe could be boxed in. It would be nice to have tiles halfway up the walls. Us guys do not always have a good aim.

The bathroom needs to have the green basin and bath removed and white ones put in their place. The bath I already have but I would need to get the basin and new taps. Some of the tiles need to be replaced and some need to be added. Both the bathroom and the toilet need a new floor covering. A small piece of lino or something like it will do fine.

The third bedroom has an airing cupboard in it. As the new boiler is a combination type, there is no hot water tank anymore and nor is there any tanks up in the loft. Therefore, the airing cupboard is no longer required and it can be removed. Once the walls and the floor have been patched up, the whole of the upstairs can be painted and the carpets can be replaced.

The house will then be ready to sell. Most of the work has been done and I am so close to getting the house finished. I just need to find a way to do the rest and still make my payments on the CC’s.

As I have said before I will not put mine on the market until I find the right property to buy. Therefore ,I need mine to sell as quickly as possible.

The first rule for selling a property is, as they say, location, location, location. The second rule is Presentation. A potential buyer will decide not to by a property within minutes of them walking through the front door. Depending on the state of the outside of the house, they will make that decision before they even get to the front door.

If you have never watched, a programme called The House Doctor, presented by Ann Maurice. I would suggest that you watch it or check out the website for it
https://www.housedoctor.co.uk/about-ann/index.php

The programme is about someone that has had their property on the market for sometime and is having a lot of difficulty in selling it. Quite often, the vendor will have dropped the asking price, by 10 or 20 thousand but still they cannot sell the house.

Ann almost does exactly the same thing every time. For starters, she de-clutters the house by removing most of the personal items and all the nick knacks. At some point, the seller will say something a long the lines of. I like my home how it is.

To which Ann will reply, this not going to be your home anymore, it is going to be someone else’s home. What counts is whether they like it and not whether you like it.

Invariable there are rooms that either look dingy or that have been painted in a colour that is, well let us say a striking colour. These are always brightened up with a coat of paint in a light and airy colour, white, magnolia or possible a very pale yellow. Often as not the whole house is painted in the same colour. This gives the property a sense of flow as potential buyers walk round it.

Worn, dingy or colourful carpets get the same treatment. I mean replaced with a light airy carpet and not painted. The same applies to the curtains.

A bedroom that has no bed in it because it has the computer in it and a load of, to any one else, rubbish. Is a no, no. All the rubbish has to go and so does the computer. In its place has to be a bed of a suitable size for the room. A bedside table with a lamp on it, is always a good idea. If the size of the room will allow it, a chest of draws can be put in the room and maybe a wardrobe. The bed must be a maid up bed, as though someone was going to sleep in it.

Now when someone walks in to that room, they SEE it for what it is, a bedroom. One or two of them may even think to themselves, this would make a nice study. However, you must clearly define a room’s function and for most people that room will be a bedroom.

There is another program that is on in the mornings, I think it is on BBC1. In that programme, they have a house valued by three estate agents and then they tart up just one room and have the estate agents come back and revalue the house.

The price has always increased by a few thousand and always by more then it cost to tart up the room. Sometimes it has added as much as £10, 000 to the price of the house.

I hope that people can now understand why I need to get the house finished and why it is so important to get the presentation just right.

As harpiegirl said in her post. There are no millionaires that have never taken a risk at some point. - Some you win and some you lose. I am not a millionaire and I cannot afford to lose one. To quote my QA days, I must, GET IT RIGHT FIRST TIME.

GettingThingsDone

rob, devils advocate - you are delaying. get your house valued and sold. sorry if it sounds harsh, only trying to help.