Sound advice needed

naitch1980

Hi guys & girls!

I'm posting on behalf of my mum, she's in a real mess.
She earns approx £15k a year, which is £1000 take home a month, roughly.

Her mortgage is £250, but she's had to remortgage and that is about £150 a month as well. Add to that, her council tax of about £100 - she has tried a re-banding, but to no avail, Gas, Electricity, Phone etc

She is about £2k into her overdraft, constantly being charged (she's just taken the bank to court, we're awaiting a date at the moment) and has about £7k. I'm aware that some debt companies will help her if she has £8k+ of unsecured debt.
But when she claims back all her charges, will this mean that they will all take the money and offset it against her outstanding debt when she is in the middle of a debt management plan?

IT's become so bad that she is considering selling the house and renting it back, as she has about £100k of capital in the house price. But realistically, she will not get the £140k it is worth.

I myself have no spare cash to be able to help her, so any advice on how she can help herself would be awesome.

Many thanks in advance

robnye

did she remotgage to pay of some debts?
she needs to assess what she is paying out - by doing whats called an SOA 'statement of affairs',
she could post it on here and others will help identify possible savings.
another idea is a spending diary to see where her money is going on a day to day basis

the 'bank charges' case will now be frozen due to the impending court case.
So she needs to reduce her spending now

is she able to get another part time job?
sell stuff on ebay
do car boots

RAS

Can she go to www.entitledto.com incase she is entiteld to anything?

Are you living with her or is she getting the single person's council tax rebate?

How many bedrooms - can she take a lodger?

Irrespective of her bank charges, which are frozen at the moment, it is evident that ehr expenditure has exceeded her income for some time, so she needs to put up a complete SOA, see here

http://forums.moneysavingexpert.com/showthread.html?t=107280

Then people can help her. In the meantime, please do not let her increase the mortgage anymore, as securing unsecure debt is not a good idea.

She may also need to make an appointment to see a debt counsellor who will will need the same information.

http://forums.moneysavingexpert.com/showthread.html?t=107280

david_hellier

SOA please

liz105

Get her to open a new basic bank account ASAP with no overdraft facility with a bank that she is not involved with.

That way when any charges are refunded they will go into that account and the current bank wont be able to offset them.

Then she can start to pay off her overdraft bit by bit and treat is as a debt. Makes things much clearer to understand.

naitch1980

Just to let you all know, we contacted one of the charitable debt help companies, she's in the process of arranging a meeting with them I think.
I'll answer the individual questions above as time moves on, but thank you all in advance for your help!

dancingfairy

Definitely post the SOA when you get the chance- we'll be able to say where she could get a better deal and if she is paying over the odds for anything. Also when you have done a thorough budget and worked out what it should be ie she should have £20 a month left after paying the bills or whatever a spending diary can be really useful to find out where all the 'spare' money goes - it is easy to spend it without really knowing what on.