Urgent Advice - Loans/Credit cards now no job please help!

tightfistedmoneysaver123

Hi Everyone,

Please can anyone advise/help me on the following...

I have approximately £ 15k spread across 6 credit cards (with min payment on each one being between £50 - £90) and a Tesco personal loan which is approx £ 130 per month and ends in 2010.

The cards and loan were taken out 3-4 years ago when I was working full time, living with my ex-partner and on a good salary of £25k.

Now I am a single parent (baby boy 12 months) and was made redundant in December last year.

I am now currently behind with all my credit card payments (3 months) but have managed to keep up my loan payments.

I have a mortgage £ 125k (£ 650.00 per month) and at the moment I am claiming from a mortgage payment protection insurance which pays £ 500.00 per month and should do for the next 6 months.
Also obviously have C.Tax/Gas/Elec/TV Licence/Insur etc & Food...if you can count living on baked potatos with baked beans for breakfast, dinner and tea I am in a 'major minus money situation' and am sick with worry.

My only other 'income' now is made up of:

Income support (Approx) £ 236.50 p/m
Child Tax credit (Approx) £ 189.20 p/m and
Child benefit (Approx) £ 73.00 p/m

Total Income (approx £ 500.00)

I am at the stage now where the credit card companies are chasing me for arrears and minimum payments, but as yet have not quite gone as far as default notices.

I have written and explained the situation to each one (last month) and each one has sent me a 'Financial statement' form to completion.

Two of the 6 C Cards have payment protection insurance on them which I have now claimed.

My question is, where do I stand with regard to making a reduced payment proposal to each creditor when my income comes to less than what goes out. Do I have any extra 'rights' as a lone parent on benefits?

I would like all the interest to be 'frozen' can it? and how does a situation like this, if you keep in contact etc and agree on terms etc...affect your credit rating.

I have not used any of my credit cards for over a year, I cut them all up.
I wish that I had never ever had one as now they are taking over my life and are ruining it. Why couldn't I have learned to live as my parents did...if they didn't have the money...they didn't have it.

My capital one card which has payment protection insurance has 'stumped' me...they wrote me a letter to say I cannot claim on my protection insurance until my three months payments (£275.00) are paid to them immediately????
I rang them and explained that if I had that amount of money I would not be in arrears.

Trying to sort this out during the day with a baby that naps for an hour if i'm lucky is a nightmare in itself (HENCE THE TIME OF THIS POSTING)

WHAT SHOULD I DO ???
Please advise as I rang the CCCS yesterday and they weren't sure if Cap1 had the right do demand the arrears before the insurance could be honoured !!??

Any advice would be very much appreciated - Thank you

tightfisted moneysaver123

angelavdavis

Hi there, sorry you didn't get a response until now - I think you got missed somehow.

Sorry I can't answer the Capital One query but hopefully my responding will bump your post anyway so someone else might help out instead.

Full SOA: You need to sort out an SOA and post it up on here so the good folk can offer their advice on ways you could reduce your outgoings. Southernscousers sticky post will guide you through this.

Freezing Interest: Well done for notifying your creditors, but I would just repeat the letter with a copy of your SOA and use this template on nationaldebtline to request that they freeze the interest until your financial situation changes. Some might refuse, just followup with another letter (send all letter recorded and keep copies) - there is a template here for this purpose.

Benefits: Have you checked on www.entitledto.co.uk to see if there are benefits you are missing out on? You shouldn't have to pay council tax if no one is earning in the house. Let them know immediately.

Maintenance: Is your ex paying maintenance? I suggest you seek advice from CAB about seeking financial support from him.

Property: How much equity is in your property? Sorry to say this, but I think you might have to consider selling the house to clear your debts. Is the property only in your name or would your ex have a claim over this? If so, is he paying toward the mortgage? If he isn't yet he should be, this needs to be included in your claim against him. Also keep all proof of the payments you have made to the mortgage so you can argue that he hasn't supported you since leaving (this will mean he will get less % of the equity).

If your situation continues, your creditors will eventually want to put a charging order on your property and by this stage, the charges they will have added will mean you have even less equity left.

Income: Now the other aspect is increasing your income - can you rent out a spare room to a lodger to help you cover living expenses? Are you able to get work? Do you have anything to eBay - go through the house and drag out anything that isn't essential to get rid of it to build up some essential money for the real emergencies until you get some income. Chase and chase (put in writing and send recorded!) about the payment protection claims (see below re cap1). As soon as you have a little income, start paying £1 per month to each creditor.

Dealing with Creditors: Make a note of times you/they phone (keep pad by phone) and who you have spoken to (including surnames). If they start getting really horrible, ask them to remove your phone numbers from their files and only deal with you in writing. Post on here for a letter if they fail to do this. If any start mentioning court over the phone, that's the prompt to refuse to deal with them over the phone and instead to deal in written correspondence (because it is legally admissable).

Ref Capital One, Do you have a copy of the PPI terms and conditions ref the payments they say you need to make? Did you not claim immediately or have their demands to repay been since you made the initial claim? Personally, I suggest you write to them and state that, due to their feedback that they refuse to honour the PPI agreement, you consider the account in dispute which you would like them to resolve within the next 28 days, else you will report them to the Office of Fair Trading and the Financial Ombudsman. I believe if an account is in dispute, that they can no longer progress the account or place interest on it. I can't believe CCCS didn't recommend you do this.

Credit File: I can't deny it won't be detrimentally affected by all this, but the main thing is to get yourself financially stable in some way first. The credit rating will improve as a result of this.

angelavdavis

Duplicate post by the look of things!

http://forums.moneysavingexpert.com/showthread.html?t=506735