Desparetly in need of some debt advice - please help

Emmaizzy

Hi

Earlier this year my son suffered a brain injury as a result of an operation that went wrong. This was totally unexpected and happened on 28th December. Hubbie and I and our 1 year old daughter live in the Channel Islands and the operation took place in the UK. My son has just returned home (3 weeks ago) from being in hospital.

During this 6 month period time I was travelling back and fro to the UK to visit him and I also lost my job (17 Jan 07). We have therefore only had one income coming in as I lost a salary of £20k. Prior to this we were already spending pretty much all we earnt.

We have therefore been living on our credit cards and we are now at breaking point as even if my son is awarded disabilty and attendance allowance it still won't be enough to cover all our outgoings.

The Channel Islands are not part of the UK so the benefits are not the same. We don't have the mobility scheme running in the UK where you can hand over the money and if you like lease a car. There is a fixed rate for disability and also attendance allowance. If you get turned down there is one appeal and if you fail again you cannot apply for another year. In Apirl next year they are getting rid of these allowances (including the transport allowance) altogether and bringing in Income Support (which previously we did not have). I have no idea if we will then qualify as the thresholds here are really low, ie, you have to have less than £7k a year coming in to even get child benefit.

I wanted to ask the following advice about a way out as investigated so far and please put forward any suggestions you may have.

Car Loan: We bought a new family car in May 06 and our payments are £360 a month over 4 years. As my son is unable to walk and we live in the middle of nowhere we could not live without a car. The loan company has offered to reduce the payments to £160 a month and then at the end of the remaining years there will be a £4k shortfall which we can refinance - this will cost us more in the end but would free up extra cash to pay of the credit cards - good or bad idea?

Mortgage break. Our mortgage is with HSBC. They will give us a break of 6 months but HSBC say this will seriously damage our credit rating. This surprised me as I thought an arrangement between the two parties would not be counted as missed payments. They have offered us interest only for a year but this will only give us an extra £230 a month. I would prefer a 6 month break then a year interest only. a six month break would allow us to pay off £1,000 a month and my thinking is we can't afford any more credit anyway so is it such a big deal? Thoughts??????

My bank account (first direct): I have a £1000 overdraft, plus loan plus visa (£1000). I asked for a break on the loan but instead the bank offered to close my account and let me pay of 1% of the money owed until it was paid off - I really don't want to close my account and which bank would touch me again if I did do this? First Direct say that they could ask me to close my account anyway - could they do this - these are pretty exceptional circumstances.

We owe £16k on the credit cards as we already had a pretty high balance prior to this happening but it was manageable.

Help!!!!!!

Emma

Lucy1982_2

Hi Emma

I'm not sure I can be much help. But I wanted to say welcome and I am so sorry that you have had such a tough year.

Can you/Have you started legal proceedings against the hospital. I would have thought that as your son's injury was cause by an error you would be able to claim compensation. I know that this would go towards your sons care, but it would be one less thing to worry about. How old is he?

My other advice would be to read to thread called First Time Posters which explains how to do an SOA (a list on incomings and outgoings) it gives everyone a chance to be nosy and work out where in anywhere you could save some money.

Well done for posting and we will help as much as we can

x

saffronflowers

Emmaizzy wrote: »

Hi

Earlier this year my son suffered a brain injury as a result of an operation that went wrong. This was totally unexpected and happened on 28th December. Hubbie and I and our 1 year old daughter live in the Channel Islands and the operation took place in the UK. My son has just returned home (3 weeks ago) from being in hospital.

During this 6 month period time I was travelling back and fro to the UK to visit him and I also lost my job (17 Jan 07). We have therefore only had one income coming in as I lost a salary of £20k. Prior to this we were already spending pretty much all we earnt.

We have therefore been living on our credit cards and we are now at breaking point as even if my son is awarded disabilty and attendance allowance it still won't be enough to cover all our outgoings. Have you filled in the DLA form, if not always write it as every day is the worse possible, as you never know what is around the corner, very often they will turn you down first time - appeal it generally you get it, I would assume you are going for higher rate if they offer you middle again appeal it.

I wanted to ask the following advice about a way out as investigated so far and please put forward any suggestions you may have.

Car Loan: We bought a new family car in May 06 and our payments are £360 a month over 4 years. As my son is unable to walk and we live in the middle of nowhere we could not live without a car. The loan company has offered to reduce the payments to £160 a month and then at the end of the remaining years there will be a £4k shortfall which we can refinance - this will cost us more in the end but would free up extra cash to pay of the credit cards - good or bad idea? Along with DLA you should be entitled to Mobility and I am not sure of the ins and outs but you should be able to get a car financed by DWP

Mortgage break. Our mortgage is with HSBC. They will give us a break of 6 months but HSBC say this will seriously damage our credit rating. This surprised me as I thought an arrangement between the two parties would not be counted as missed payments. They have offered us interest only for a year but this will only give us an extra £230 a month. I would prefer a 6 month break then a year interest only. a six month break would allow us to pay off £1,000 a month and my thinking is we can't afford any more credit anyway so is it such a big deal? Thoughts??????

My bank account (first direct): I have a £1000 overdraft, plus loan plus visa (£1000). I asked for a break on the loan but instead the bank offered to close my account and let me pay of 1% of the money owed until it was paid off - I really don't want to close my account and which bank would touch me again if I did do this? First Direct say that they could ask me to close my account anyway - could they do this - these are pretty exceptional circumstances.

We owe £16k on the credit cards as we already had a pretty high balance prior to this happening but it was manageable.

Help!!!!!!

Emma

Not much help, sorry, I am sure some other experts will come along soon with some better advice, Post up your Statement of Affairs, which is basically income and expenditure and debts.

Thinking about you

SFx

Conor_3

OK....

The car. No idea about how mobile he is so this may not end up being any help. If he is offered the highest rate for mobility, you can use this to pay for a car on the Motability Scheme. You hand over the Mobility part of the DLA to the scheme and you get a car. My sis in law got a wheelchair adapted Fiat Doblo 1.9i with A/C for £700 contribution. You can then hand your car back to the finance company with no penalty. That would give you £360 you don't have to find.

How much equity do you have in your house? Is any of the finance secured on it?

PLease post a SOA as well please.

misspoppy

Hi

I suggest you contact the council welfare team for help completing your DLA form. They are very experienced at this and know what the DLA is looking for. I'm sure you won't have too much trouble. If you get full rate mobility you can choose to have it as cash or as a vehicle. You might want to have it as cash so you can pay for your current car.

I think you should contact one of the debt charities for advice as your problems aren't likely to improve you can contact National debt helpline amongst others who will give you free advice. Martin has an article at the top of the previous page called problem debts this might help.

Good luck

Conor_3

misspoppy wrote: »

Hi

If you get full rate mobility you can choose to have it as cash or as a vehicle. You might want to have it as cash so you can pay for your current car.

That is probably the worst thing you can do if you're still paying for your car.

If you get it in cash, you're still £200 short and have the insurance, servicing,repairs and breakdown recovery to pay.

If you get a car on mobility, the only thing you have to pay for is petrol. Everything else is included.

Emmaizzy

Hi thanks for your advice

I will try and get the SOA done today if possible but its difficult with Izzy as he is not at all mobile and has also gone blind.

The Channel Islands are not part of the UK so the benefits are not the same. We don't have the mobility scheme running in the UK where you can hand over the money and if you like lease a car.

I'll add this info further up as well - sorry should have pointed it out before.

Thanks for the advice - its feels much better to get it out.

Thanks
Emma

saffronflowers

Sweetheart - you will get thourgh this I for one promise to help as much as I can.

These people maybe able to give you some advice if I think of any mroe I will post

http://www.headway.org.uk/

jo1972

Emma, ignore above post.

Just wanted to send you a virtual hug and hope that your son gets on well with his recovery. What an awful year you've had.

You are in my thoughts.

Jo.x