little library lady finally faces facts - advice appreciated

little_library_lady

Hello all

Time to finally face up to the fact that I am never going to be able to pay off my debt by paying just the minimum payments. I’ve been struggling with debt for the past 20 years. Some are in my name most in my partners. All are my debts incurred solely by me over the years. My partner gave me permission to put some in his name to take advantage of low interest rates (which have now risen). I have been paying off debt with at least the minimum payments over this past 15 years!

We (my partner and I) both work. I take home between £1100 -£1300 and he takes home about £1000 per month. I have the option of redundancy in 2016 (approx. £30,000) or re-deployment earning around the same. However I think I might be safer opting for re-deployment as it’ll be a steady income for us - we have children under 16. Our mortgage is currently sitting at £29,800 and will be paid off in 5 ½ years. However we cannot lose our home under any circumstances. It would just tear us apart. I have a pension plan but of course can’t access that for 30 odd years.

Barclaycard: £9,191 – 24.9%
Marks and Spencer: £4,749 – 26.9%
Marks and Spencer: £2,740 – 27.9%
Barclaycard: £1311 – 26.9%
Capital One: £1743 – opened around year 2000 – 19.1%
Virgin £925 – currently 0% interest for the next 30 months
Next: £325
Debenhams - £375 – 33% - opened approx. in year 2005
Santander Overdraft: £3000 – (£30 per month fee) opened in year 1993


I finally took the plunge last week and phoned StepChange who were really nice. I still haven’t phoned my creditors (plan to do that tomorrow) to explain I’m now on a DMP. I’m just putting it off for fear of them being unpleasant and telling me I have to keep to the minimum payments.

My credit rating is shot to pieces as although I’ve always paid the minimum amount I usually pay it about 2 weeks late incurring late fees as well as interest.

Stepchange have told me based on our budget I can afford to pay £204 to them to forward to my creditors but on working it out we will have approximately £300 per month left over to live on (doesn't include food) which can be put into a pot in case some creditors get nasty and demand increased payments and also to save toward paying off the debt in larger amounts. The £204 to Stepchange will pay of the debt in approx: 8 years (if interest stopped), however if saving additional I would like to be able to pay it in five years.

What I’m worried about at the minute is if some creditors like Barclaycard and M&S don’t stop interest – what do I do – as my debt will only then go up and up through late payment fees and interest! (I'm really worrying a lot over this so any advice appreciated). Does anyone have any experience with any of these creditors? Who is more likely and less likely to stop the interest and who is not? : (

Anyway new year, new basic bank account and a plan to finally get out of debt!


- Little Library Lady

bearcat16

Hello, and welcome.

Firstly, things are not as bad as you might think. (I would dearly love my mortgage balance to be £29,800!) and your total debt of ~£24,000 is not THAT big.

My first question though is your income.... you (and your OH) seem to be on minimum wage despite having been doing your job for enough years to be entitled to £26k in redundancy.

Is this right?

little_library_lady

hi. thanks for your reply. yes partner's income is around £200 per week take home and my salary is around £300 per week net. I've worked for the same place for 23 nearly 24 years. I used to take home a lot more but my hours and consequently salary were reduced a few years back. So yes the redundancy amount is correct.

I think I'm going to have to opt for the redeployment though as we need a regular wage in our house and if I do that I can still keep my length of service.

sourcrates

Hi,
First thing you should do is a CCA request to all relevant accounts, the ones I have listed below will qualify :


Barclaycard: £9,191 – 24.9%
Marks and Spencer: £4,749 – 26.9%
Marks and Spencer: £2,740 – 27.9%
Barclaycard: £1311 – 26.9%
Capital One: £1743 – opened around year 2000 – 19.1%
Virgin £925 – currently 0% interest for the next 30 months
Next: £325
Debenhams - £375 – 33% - opened approx. in year 2005


Assuming all the above are pre 2007 accounts, I would think it fairly unlikely that any of them will still retain original paperwork.


CCA would not be relevant to overdraught debts unfortunately.

Santander Overdraft: £3000 – (£30 per month fee) opened in year 1993


Info here :


https://forums.moneysavingexpert.com/discussion/709639

bearcat16

Just my opinion, for what it's worth, but if I had been working for the same company for 23 years and they hadn't promoted me and were still paying the minimum wage, I'd be out of there like a shot.

That redundancy payment is equivalent to approximately 2 years of your current income, that's a long time to find a new job!

Only you know what you'd be comfortable doing, and it's very easy for me to say "I'd do this..." when it isn't me taking the risk, but for what it's worth, this is what I'd do:

Take the redundancy and repay half of the debts - the ones with the highest interest.
Then try to shift the remainder onto as many 0% cards as possible.

At the same time, find another job. Almost anything you can find will pay either the same or more than you currently receive. When you find one, and you have been there a few months or so, pay the rest of the debt off (or at least, whatever isn't on 0%).

That way you'll avoid having to go onto a DMP, you'll have no debt and therefore no repayments, and therefore more money to live on, and the same or a better income.

As I say, it's easy for me to say.

Is the job you do something you could do at another company? Would it be easy for you to find a new job in the same field? Or are you open to the possibility of doing something else entirely?

One thing you have in your favour, is that the world is your oyster. You don't have a high salary that you'd need to replace, so you can do just about any job you like and not suffer a cut in income.

little_library_lady

bearcat16 wrote: »

Just my opinion, for what it's worth, but if I had been working for the same company for 23 years and they hadn't promoted me and were still paying the minimum wage, I'd be out of there like a shot.

That redundancy payment is equivalent to approximately 2 years of your current income, that's a long time to find a new job!

Only you know what you'd be comfortable doing, and it's very easy for me to say "I'd do this..." when it isn't me taking the risk, but for what it's worth, this is what I'd do:

Take the redundancy and repay half of the debts - the ones with the highest interest.
Then try to shift the remainder onto as many 0% cards as possible.

At the same time, find another job. Almost anything you can find will pay either the same or more than you currently receive. When you find one, and you have been there a few months or so, pay the rest of the debt off (or at least, whatever isn't on 0%).

That way you'll avoid having to go onto a DMP, you'll have no debt and therefore no repayments, and therefore more money to live on, and the same or a better income.

As I say, it's easy for me to say.

Is the job you do something you could do at another company? Would it be easy for you to find a new job in the same field? Or are you open to the possibility of doing something else entirely?

One thing you have in your favour, is that the world is your oyster. You don't have a high salary that you'd need to replace, so you can do just about any job you like and not suffer a cut in income.

hi. thanks for this. I understand what you're saying but if I paid off half my debts with a possible redundancy amount and half to my mortgage I'd still be left with finding a way to pay what's left of the mortgage and the remaining debt and not have a job. Our credit rating is low and the chances of being accepted for another card are extremely low; also I want to get out of that rut. I'd get jobseekers benefit (contributions based) and perhaps a little tax credits. but that's it. Also unfortunately the field I'm in is slowly dying out and it's just not that easy to get a job in it any more that' s why the regular monthly salary appeals. I'm still weighing up the options though so I do appreciate your advice.

bearcat16

little_library_lady wrote: »

hi. thanks for this. I understand what you're saying but if I paid off half my debts with a possible redundancy amount and half to my mortgage I'd still be left with finding a way to pay what's left of the mortgage and the remaining debt and not have a job.

Sorry I think you misunderstood, when I refer to your debts I do not mean the mortgage, I'd just keep paying that as usual.

I mean the other, non-secured debts. The reason I'd pay half first is so that you'd have some money aside while searching for a new job. Once in the new job and settled, then pay the other half of them.

However, it's just a suggestion and I can fully appreciate how you don't want to give up regular income. I just think you could get that regular income at practically any other (related or non-related) job.

little_library_lady

sourcrates wrote: »

Hi,
First thing you should do is a CCA request to all relevant accounts, the ones I have listed below will qualify :


Barclaycard: £9,191 – 24.9%
Marks and Spencer: £4,749 – 26.9%
Marks and Spencer: £2,740 – 27.9%
Barclaycard: £1311 – 26.9%
Capital One: £1743 – opened around year 2000 – 19.1%
Virgin £925 – currently 0% interest for the next 30 months
Next: £325
Debenhams - £375 – 33% - opened approx. in year 2005


Assuming all the above are pre 2007 accounts, I would think it fairly unlikely that any of them will still retain original paperwork.


CCA would not be relevant to overdraught debts unfortunately.

Santander Overdraft: £3000 – (£30 per month fee) opened in year 1993



thank you sourcrates.

I just checked some old emails and the marks and spencer cards were taken out September 2006. Capital One in the 90s. What does it mean in law if they can't provide me with the original agreement? Is it the document that I signed?

Thanks.

sourcrates

little_library_lady wrote: »

thank you sourcrates.

I just checked some old emails and the marks and spencer cards were taken out September 2006. Capital One in the 90s. What does it mean in law if they can't provide me with the original agreement? Is it the document that I signed?

Thanks.

Hi,

It may mean they would be unable to seek a judgement against you in court, if they could not provide the correct paperwork.

For pre-April 2007 accounts, they should send you a copy of the document you signed, although there is no requirement for a signature.
They should also send copies of the terms and conditions in force at the time the accounts were opened.

This is a hotly debated subject, and the exact effect it could have on you is unclear, some creditors shy away from debts that can't be proved, some don't.
You may not have to pay the full amount if paperwork dosent exist, you could settle for a lot less than is owed, you could, also walk away from These accounts as well.

I would send the CCA letter to all the accounts I listed, inc your £1 postal order with each one, and see what comes back to you, that's what I'd advise you do first !!

What you do after that would depend on what they send you.

northerner999

You are in a great position with the mortgage. You may wish to consider requesting a payment holiday.

Nothing major, but I image three or four months' worth of mortgage payments would make a real dent into your most expensive debts.

And do give serious consideration to redundancy. That kind of money could deal with your top four fee-incurring debts, leave you money to live on (plus partner's salary), request a mortgage payment holiday (using redundancy as cover, say six months), and set to finding yourself a new job. You could attempt other money-making schemes in that time, too, lie, online surveys (when working from home I made a tenner a week doing this), ebaying any junk in the house etc.

theoretica

When do you need to decide on redundancy by? I guess from your user name that you work in libraries - which I know are a very hard field to find employment in, but could you spend some time looking at jobs which would use your experience? (The Guardian still seems to be one of the places to look for ads.) As you are part time could you apply for another part time job to fill the gap and give you some income if you took the redundancy?

I am concerned when you say that you are going on a DMP, but some of the debts are in your partner's name - if they are to be included won't he need to go on one too?