Need some help please

26SCARLET56

Hi, I'm new here so forgive me if I'm on the wrong thread.
My husband and I have recently seperated, up until now he paid all of the bills but at the end of next month that will stop. I work fulltime but only earn enough to pay for my living costs but not any of the credit cards or loans in my name. I have decided to sell my property and go into rented accommodation and use the equity from the house to clear outstanding debt. My problem is that if the house sale is not completed quickly I will not be able to pay credit card bills etc. Is there a template letter anywhere that I can use to write to these companies asking if I can delay payment until my house is sold?

fatbelly

There are plenty of template letters here

Sample letters

You probably want the one headed 'Ask my creditors to accept a token payment' That's £1 per month.

You will get defaults on your credit report. That's not the end of the world. After a few (say 6) months of this they will be open to full & final settlement deals where the debts are cleared for maybe 30-50% of the headline figure.

But are you sure about your plan to move? The private rented sector is not a very secure place. Assured shorthold tenancies often last six months, then you can be given 2 months notice without any particular reason.

Can you actually afford to live where you are and pay your mortgage (and council tax, gas electricity water etc) even if you can't afford to give the non-priority debts anything? Credit cards loans, catalogues etc are designated as non-priority debts for a reason - they can't really do anything to hurt you.

Happier_Me

Fatbelly has a point. Paying off your debts with equity in your property will clear your debts but there isn't much security in renting. Will your rent be lower or higher than your mortgage payments?

If you can afford a little to cover your debts then it might worth staying put and considering a DMP.

Are you money savvy? Are you spending more than you should for your services? It is so easy to be wasteful - when I stop watching the pennies I am capable of spending a small fortune on absolutely nothing each month!

A statement of affairs could help the lovely people on this board decide if your approach is the right one and identify any savings to help you meet your commitments.

National_Debtline

Hello there,

Fatbelly's post is (as always) excellent. It could be worth completing a financial statement to see if you can meet your essential outgoings and food etc. If that's the case you may not need to sell (unless you really want to). Why no have a go at completing this one and then you can post it up; we'll be able to offer further help and support.

http://www.stoozing.com/calculator/soa.php

Best wishes,

David @ NDL.

26SCARLET56

I really don't want to sell my home but my soon to be ex husband wants his name off the mortgage and his half of the equity. My annual earnings wouldn't qualify me for a mortgage. I know that would be the sensible thing to do especially as the current mortgage is less than £400 a month and to rent I would be looking at a minimum of £700 a month in this area. I feel like I'm going round and round in circles!

comeandgo

Ok you have recently separated. Have you been to see a solicitor?? Have all the assets and debts been declared? Does he have a pension that has been valued? It may be that while he may be entitled to half the equity there are things you have not thought about that you are entitled to.

National_Debtline

Hello there, do you have children?

fatbelly

You need proper legal advice from someone who will fight for your best interests. This is worth reading:

http://www.divorceaid.co.uk/financial/family-home.htm

including:

My spouse is telling me I have to sell up
Only take advice from your own lawyer!

26SCARLET56

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1214
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1214
Monthly Expense Details
Mortgage................................ 400
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 20
Council tax............................. 96
Electricity............................. 73
Gas..................................... 0
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 15
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 26
Internet Services....................... 0
Groceries etc. ......................... 110
Clothing................................ 0
Petrol/diesel........................... 130
Road tax................................ 35
Car Insurance........................... 12
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 35
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 11
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 25
Total monthly expenses.................. 1111

Assets
Cash.................................... 0
House value (Gross)..................... 185000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 186000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114000...(400)......0
Total secured & HP debts...... 114000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................13869.....417.......0
barclays.......................2500......125.......0
barclays.......................19000.....259.......0
Next...........................2502......126.......0
Nationwide.....................3099......200.......0
M&S............................3000......90........0
M&S............................18128.....302.......0
Total unsecured debts..........62098.....1519......-

Monthly Budget Summary
Total monthly income.................... 1,214
Expenses (including HP & secured debts). 1,111
Available for debt repayments........... 103
Monthly UNsecured debt repayments....... 1,519
Amount short for making debt repayments. -1,416
Personal Balance Sheet Summary
Total assets (things you own)........... 186,000
Total HP & Secured debt................. -114,000
Total Unsecured debt.................... -62,098
Net Assets.............................. 9,902

National_Debtline

Hello again,

Your ex partner *may* be able to seek the sale of the property via a court order if you do not agree to its sale. As there are no children you would have limited protection from this happening. It is vital that you seek legal advice on this point.

If the house is sold, you could use your share of the equity to offer full & final settlements to your creditors, more information on those here: http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Whilst the house is being sold you could consider looking at making offers of a token payment to each of the credit debts. Fatbelly has posted a link to our sample letters.

Best wishes,

David.

fatbelly

Thanks for posting the soa. That's a lot of unsecured debt! Is it all in your name alone? A debt management plan is not a great idea on 60k debt and £100 per month. That's probably also not enough for an IVA.

David's suggestions do seem sensible.