HSBC payment protection

roger_the_cat

Some years ago I took out a £10,000 loan with Payment Protection from HSBC. Unfortunately about 1 year later I lost my job due to divorce etc. and I'm now at home looking after my children. I had not read the small print that said I was only covered for 12 months. When the protection ran out I used my savings to meet the payments until they also ran out. I was no longer in a position to meet the payments so I'm now paying Metropolitan Collection Services a token amount per month. I should be clear in 150 years.

It has been 3 years since I 'defaulted', my Equifax report says I have 3 more years of bad credit. I can't even get a mobile phone contract. Is there anything else I can consider, such as bankruptcy etc. I do not have a mortgage, I lost the house in the divorce and now live in privately rented accommodation.

BWZN93

Hi and welcome!

You need to post a full SOA so we can see what might be the best course of action for you. There is a sticky thread at the top of this forum that should show you what info is required.

Good luck!

Jo x

roger_the_cat

SOA as requested

Monthly Incomings:

Total - £1,183.13

Monthly Outgoings:

Rent - £675
Gas - £20
Electric - £20
Water - £22
TV Licence - £11.61
Internet - £15
BT Phone - £19
Mobile - £20
Food - £200
Car Insurance - £42
Road Tax - 15
AA Breakdown - £5
Petrol - £80
Home Insurance - £8.34
Life Insurance £31.23
MCS - £5


Car service & repairs - ?
Clothing - ?

Total: £1,189.18

Balance: -6.05

Debt: MCS - £11,383

RAS

Hi

Your credit problems will not just be due to your default. No paid income, private rented accomodation etc will also affect you. Have you made sure you are on the Electoral Roll? Also, if your ex had financial problems or has had then since, and you are linked to him, that will affect your rating.

Anyway, I think most people here would suggest that you stay away from mobile contracts and use PAYG if you are in financial difficulties. You need to look at your usage anyway, as you should be able to shave a tenner of this.

Have you checked that you are getting everything to which you are entitled on www.entitledto.com?

How many are you feeding on £200, as this is an area where you might be able to make major savings. Go over to the Money Saving Old Style board for help.

And do you really, really need a car, as that would free up a lot more money?

BK might be an option, but will affect your credit record for 6 years and you have to declare it for ever if you are asked. This can make private rented accomodation and unsecured credit difficult for more than 6 years.

Have a chat to folk on the BK sub-board about the implications and talk to one of the debt charities listed above.

Finally, have you checked that you could have claimed the PPI if you had done so inside the year? if not, ythen you might be able to claim mis-selling.

roger_the_cat

Hi RAS,

I recently moved but will be on the electoral roll soon.
My ex had no serious problems and we had a clean break divorce.
My mobile is PAYG (Virgin).
I have already checked entitledto.com and believe my benefits are correct.
I feed myself and two boys (7 & 9) but I must admit this figure also includes some clothes bought at the supermarket.
I am getting a little part time work at the moment so I need the car.

Thanks for the info about BK. It has put me off going down that route.
I did claim the PPI but it only lasted for 12 months.

Do you know what will happen to my credit history in 3 years time when the "default" comes off? Will MCS or HSBC register the token payments?

msmicawber

Hi,

Do you really need the life insurance? If you cancelled it, you could make larger payments towards your debt.

I'd check whether you can get car insurance and breakdown cover cheaper - they both look very high to me. I found this for another poster yesterday, where you can compare breakdown cover and prices:
http://www.get-quote.co.uk/

Also, Quidco is giving up to £26 cashback for RAC breakdown cover, 15% off Gem breakdown cover, £20 off Green Flag breakdown cover and so on. You can check better insurance deals using Martin's tips.

roger_the_cat

Thank you for your thoughts. I should have been clearer in my original posts and SOA. The Life Insurance is a combination of insurance, pension and a loan repayment taken out on it, all with the same company.

I don't mean to knock the suggestions that have been made because they are very good ones, however I have tried many of these. I renewed my car, house and breakdown insurance in June so a long wait to renew again. I have to pay monthly, including the added interest (£66.33) because I'm not in a position to pay a lump sum. I get 15% off breakdown cover because it is all with AA.

Home contents insurance: £89.69 + £11.02
Car insurance: £405.92 + £55.31
Breakdown cover (inc. relay): £92.25 - £13.54 = £78.41

msmicawber

Hi Roger,

No offence taken! I still think you're paying over the odds and that it may be cheaper for you to pay bank charges a couple of months and pay your breakdown and contents insurance as lump sums. You don't need to wait until it's time for renewal to switch again. If you managed to make some cashback (which you wouldn't receive for a couple of months anyway), you could either throw this at your debt or hold onto it and use it for the kids at Christmas.

I do understand how tight things can be - I'm a single parent myself and was in receipt of benefit top-up until very recently. I used to think I couldn't afford to pay things up front, but with the help of this site, realised that I couldn't afford not to.

How come your car insurance is so very high?

roger_the_cat

I have just checked my car insurance again on confused.com and it still comes in at around £400. I don't know why. Even if I were able to shave £50 per month from my total outgoings, it would still take me nearly 20 years to pay off the debt.

The children are with my ex for part of the week so my time with them is too valuable to give them to a child minder and work full time.

I will take your advice though about paying the lump sums. Thank you.

tallyhoh

When you get a part time job will it be enough hours for you to claim working tax credit? and are you claiming housing benefit at the moment? Looking at your figures if the children are living with you, you shoulbe be entitled to some off your rent.

tallyhoh

Hi Roger,

Are the children regarded as living with ex full time or you. Sounds a funny question but if the live with you, you can get more benefits.

I dont know how it works when you share a proper 50%. It certainly worth looking into.