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short term debt help

edited 30 November -1 at 1:00AM in Loans
6 replies 1.5K views
rich_and_teerich_and_tee Forumite
3 posts
edited 30 November -1 at 1:00AM in Loans
Hi all,

New and green so please be gentle.

We have found ourselves in the position whereby we have just lost a third of our monthly income and cannot make ends meet for the next 6-7 weeks, previously the weekly income was enough to cover the bills as they came up individually and leave enough spare to not be skint.....

I have rekoned that with budgeting we should be able to meet commitments by 7 weeks from now (and regularly from then on by having a money pool), but in the mean time some things can be paid in full, others would be tolken payments. My main concern would be the mortgage that is due within the next 5 days and I only have a 3rd of it available. Due to a massive cockup by the bank 4 months ago, we got into a months arrears on the mortgage, this is now cleared by making up the payment over three months, but the mortgage company were very difficult to deal with over that, threatening legal action for missing a month, when the month hadn't ended yet (they wrote the letter the day after the payment had been due). This leads me to thinking they are unlikely to be sympathetic this time and would like a suggestion on how best to get over this and the subsequent six weeks.

Any help will be greatfully received

Replies

  • Firstly I thought the days of the inflexible mortgage was dead! Obvious it is not. At the first opportunity I would ditch the mortgage for another one.

    On a short term debt, the good Mrs Freddie jacked in her job at the beginning of September to work for somebody else, the only problem is she doesn't get paid until 25 Oct, so I arranged an overdraft at my bank until I get paid in November. This was to ensure that our Mortgage was paid.

    I found this to be the cheapest way to get a short-term advance, but be careful to check exactly how much it will cost.
  • Thanks for the reply,

    Unfortunately thats not an option for me, I have only a basic account and they wont allow me anthing other than direct debits and a cash card.

    Is there anyway I can get them to accept a tolken payment over the difficult period, i have every intention of catching up asap.
  • hopefulfoolukhopefulfooluk Forumite
    2.4K posts
    1,000 Posts Combo Breaker
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    Hi Rich (appropriate name for this board!) :)

    Without seeing what your budget is and who your debts are with it's very difficult to comment on how to improve your situation, although there's usually things that can be done that you won't have thought about (everyone thinks in different ways and what you may have thought of, someone else wouldn't and vice versa).

    What I will say though is that mortgage debt is an absolute priority - if you have other unsecured debts then if the s*** hits the fan you must always stop your payments to them before even thinking about stopping paying your mortgage. If you did this would you be able to pay your mortgage? Remember that if you fall behind on your mortgage the lender has every right to take your house from around you without too much hassle on their part but unsecured loans and credit cards require months and months of court action and you not playing the game before they can even come remotely close to taking something like your house off you.

    Hope this is of some help, and good luck.

    Chris
    Getting married to fellow MSE-er Lazymoo on 5/2/11 (brought forward by 8 months!!) :) :grinheart

    Unsecured debt: £0 :D (and intending to keep it that way now...)
    Mortgage balance: £153,308 (MFW once our wedding bills are paid!)
  • Most mortgage lenders will wait until 3 months arrears before they start court action so if they threaten anything like that try and check your terms and conditions. The banking code says that lenders should be sympathetic towards those in difficulty I would complain if you get poor attitude i expect if its a high street lender they should be okay.

    saying all that, pay as much as you can to the mortgage and dont forget to check if there are any costs, charges or default interest added onto the missed payments.

    Good luck
  • ReaperReaper Forumite
    7.1K posts
    Part of the Furniture 1,000 Posts Photogenic
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    I used to work in a building society and they did not consider to to be in arrears until 2 months payments had been missed.

    If they were asked to give a financial reference they would still give full marks if you had never been more than a month in arrears.

    Now I have to say that was a long time ago and the policy of only one company, but even so if you are going to have the money available shortly then missing 1 payment shouldn't matter that much. Don't make it 2 though.

    Normal advice is to tell your mortgage company now before it happens. They prefer the idea of somebody like yourself planning ahead rather than stumbling into debt with their eyes closed, and you may find them more helpful.
  • Hi Guys,

    Thanks for your replies and guidance.

    My mortgage company is not a mainstream lender, we remortgaged last year for various different reasons ans they were about the only ones who would touch us(according to the financial advisor). It appears that they are only bothered about getting their money on or before the due date.

    Made the bed and lie in it i guess.

    Well on balance I have recalculated and they will get their full payment, 7 days after their due date, but only two days after the end of the month, but at least it is a full payment.

    Anyway, thanks again for your kind advice.
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