what should we do?

sira_2

Hi, just after some advise please. I am currently on a DMP with CCCS about to go into my third month. Our debts are an extortionate £43,000 & we are paying a pitiful £92pm. Some creditors have stopped interest one is threatenting Charging Order & i dare say more will follow as even though theyve stopped interested theyre not happy with the small payments and who can blame them? As it stands it will take 38yrs to pay everything off & i am really struggling this month on the plan. I worry about every little penny we spend as there just never seems enough & worst of all xmas is coming. Keep thinking if im like this now how an earth am i going to cope for 39yrs?!! So hubby & i have decided that the way forward may be selling our house as there is some equity left. Just had it valued at around £190,000 to pay off mortgage will be about £135,000 leaving approx £50,000 left after legal & estate agent costs. So now my dilema is what do we do next, do we 1. Pay off our debts (in hope they will take a reduced final settlement figure) & rent & start over again knowing we may never get back on the property ladder or 2. Plough everything back into a new mortgage & downsize the property then stay on DMP paying in more from what we save in mortgage payments or 3. Go for the same size mortgage still downsize property then pay off the more demanding creditors & keep going with DMP or maybe even try for an IVA. The problem with that is will i get a mortgage, havent any CCJ's, not sure of defaults but have been issued notices from a couple of creditors, & will i get the same amount of mortgage with a downsized property? Our current mortgagees said we can transfer the mortgage & would be happy to consider us as we havent missed any payments but a new application would have to be made so i take it a credit search will be done, & subject to how much the new property is in comparrison to how much we want to borrow. Any suggestions or comments would be greatly received. Many thanks.

trying-very-trying

Sorry, I can't be very helpful, but if you post up a full statement of affairs, see the sticky on the front page of this forum, I'm sure you'll find loads of people to help. The problem with selling the house is making sure you won't reach the same position again.

dubgirl

Hi Sira, just wanted to offer some moral support and let you know you are not alone. As you can see from my signature, I owe almost as much as you. We are paying £65 a month on a DMP with CCCS as this is all we can afford and it is indeed scary and daunting to think of the number of years you could be potentially paying the DMP.
Like trying suggested post up your SOA and there will be plenty of bods who will be able to make really useful suggestions.

sira_2

Ok well been wanting to do this for a while so here goes this is including what the CCCS have budgeted us for;

Outgoings


Mortgage 866.00

Council tax 122.00

Gas/elec 120.00 (paying extra £20 towards arrears as they messed up)

Buildings/contents insurance 48.00

Tel includes landline, line rental & 2 mobiles 60.00

TV licence 5.00

Tv rental 42.00

Life & savings insurances, mortgage cover 120.00

Car tax 19.00

Car insurance 18.10

RAC 16.00

Fuel 90.00 (use about £50)

Fares & travel 61.00 (daughter school bus fees no other option)

Food 339 (for 4 but i average 300.00)

school meals 80.00 (but daughter does take pack lunch most days)

Pet food 20.00

Clothing 53.00

School trips 10.00

Hair 16.00 (cut hubby's & sons myself)

Medicines 10.00

Opticians 20.00

Hobbies, pocket money & emergencies 60.00

Total outgoings £2265.00

Incomings

Hubbys 1539

Mine 656.00

Benefits 162.00

Total outgoings £2357

leaving £92.00 for CCCS

Please pick away guys any help greatly received. Trying very hard to stick to this budget but something else seems to always crop up & i dread the time when the car needs work doing!

Gemmzie

sira wrote: »

Ok well been wanting to do this for a while so here goes this is including what the CCCS have budgeted us for;

Outgoings


Mortgage 866.00

Council tax 122.00

Gas/elec 120.00 (paying extra £20 towards arrears as they messed up)

Buildings/contents insurance 48.00 This seems high, try uswitch.com to see if you can get it cheaper, then use quidco.com for cashback. We dropped ours to £30 something a month from about £50 and got £120 lovely cashback that the creditors don't see

Tel includes landline, line rental & 2 mobiles 60.00 Can you go to PAYG?

TV licence 5.00 Is this right? I thought it was £11.61 per month

Tv rental 42.00 This is high, buy a cheap TV with two months money or try Freecycle or Ebay. Rental is dead money with TVs etc

Life & savings insurances, mortgage cover 120.00

Car tax 19.00

Car insurance 18.10 Again, cashback from Quidco can make a big difference if you can get a decent quote from one of their suppliers

RAC 16.00 Do you shop at Tesco? Could you use Clubcard Deals to pay for this

Fuel 90.00 (use about £50)

Fares & travel 61.00 (daughter school bus fees no other option)

Food 339 (for 4 but i average 300.00)

school meals 80.00 (but daughter does take pack lunch most days)

Pet food 20.00

Clothing 53.00 Try Ebay?

School trips 10.00

Hair 16.00 (cut hubby's & sons myself)

Medicines 10.00

Opticians 20.00

Hobbies, pocket money & emergencies 60.00

Total outgoings £2265.00

Incomings

Hubbys 1539

Mine 656.00

Benefits 162.00

Total outgoings £2357

leaving £92.00 for CCCS

Please pick away guys any help greatly received. Trying very hard to stick to this budget but something else seems to always crop up & i dread the time when the car needs work doing!

Hope that helps

PasturesNew

Mortgage 866.00 - I won't suggest you go interest only for a couple of years and use the £200 saved to pay off your higher-interest-paying debts as I don't know what I am talking about.

Gas/elec 120.00 (paying extra £20 towards arrears as they messed up) - £100 seems excessive to me. Surely you can make savings to cut this down to half. Turn off lights. No standby. Turn down heating thermostat/put on jumpers.

Buildings/contents insurance 48.00 - no comment except hunt around for cheaper next time

Tel includes landline, line rental & 2 mobiles 60.00 - no comment as you're probably tied in

Tv rental 42.00 - eh???? Buy a 2nd hand one outright for that! OK, it's smaller, but it'd be £42/month extra to you

Life & savings insurances, mortgage cover 120.00 - no idea if these are essential or could be dropped for a while.

Food 339 (for 4 but i average 300.00) - you can still cut this back a bit. That's £2.50/day for each person - but the kids are already spending £2/day on a school lunch.

school meals 80.00 (but daughter does take pack lunch most days) - £4/day for a school meal (I assume that's 2 meals/day?) You can do better with a good packed lunch. You can even get food flasks cheap in Asda, which you can put meals or soups into as it's winter soon.

Clothing 53.00 - seems a lot. You must have enough clothes by now!

Hobbies, pocket money & emergencies 60.00 - not sure how this breaks down and how you actually spend it. Keep a diary to see. Might be able to shave this in half. Hobbies can go for starters.

If it were me, I'd be tempted to cash in the house. But that depends on how mortgageable you are afterwards and what that buys you in your area. OR ... you could take a break from buying and rent. Housing market (in my opinion) is looking like things will drop in price so better to sell now, clear your debts and enjoy life renting.

(Land_of)_Maz

I know some people see owning their own property as a really important investment and something to leave their kids. But you are lucky in the fact that you have your house and this is possibly the solution to your financial problem and will leave you with a still sizeable amount of money to put aside for your kid(s) future once everything is paid off. Or to restart the rest of your debt free life as a family.

You've got the rest of your life to save something for the kid(s) and you can give them a better quality of life in the longer term. (altho I'm not saying they are affected by the situation as things are at the moment. I suspect your kid(s) are oblivious and very happy with their lot!)

39 years is a long time to be on a DMP plan, better (IMHO) to cut your losses now while house prices are still up and sell.

Appreciate that finding somewhere to rent is not as easy as it seems, do you have a plan b for somewhere to stay if you sell soon and haven't been allocated a house. Are you restricted to areas you want to live for work etc? What is the rental market like in your area? Better to go with a housing association than look at private rents as they only go from year to year max and can be unsettling for family life. Housing association/council homes are pretty much yours for as long as you want them.

Imagine if you do sell your house, not only will you have, say, £300(guesstimate) a month in rent as opposed to £800 in your mortgage, you wont be paying the £90 a month out either. You and your family would be £600 a month better off and that's without cutting back on any of your expediture!! Plus you will have some left over money in the bank.

Something to think about? Good luck with whatever you decide to do Sira. I'll read your thread with interest.

lotty41

Hi, selling up & renting has been on my mind too, be debt free but worried about not having a secured home for the children.
I've never heard of renting privately from the council, is this really possible and has anyone done this, at least that would give more security for our families. If someone out there has privately rented from the council or rented whereby you could stay for more then a year or two I'd be grateful for more info.
All the best to you whatever you decide to do....lotty

sira_2

Thanks for all your replies & good advise. Today went to see an Independant Advisor who went through everything with us & between us we have decided our best option is to sell & rent for a while. We're actually ok about this as we had kind have come to this decision in our own minds just needed to be assured we were doing the right thing. However, he did have a look at our current mortgage & thinks we have been diddled big time & suggests we go to the F.S.A with a complaint which i might follow up dare say a bit of compenstation would help our situation!! Anyway on the return home we went to look at some new houses being built to discover some are for sale under shared ownership scheme & as i work for the council we do qualify to apply, this could be the lifeline we've been looking for as we would only need a £40,000 mortgage for a 25% share with rent of £300 sounds too good to be true!! Just wondering if anyone has any advise or knowledge of these things please as never been something we've considered before?

Hopeful1

I can't comment on the buying, selling, renting of houses unfortunately.

With regards to full and final offers they are likely to accept lower payments if it would take a long time for you to repay the debt.

I did wonder if you have any charges on any of your accounts that you could reclaim and use to reduce the balances? Obviously bank charges can't be reclaimed at the moment but requests should still be submitted. However, you can reclaim credit card charges and i am currently fighting for catalogue charges to be returned.

Another thing i have done is make requests for copies of credit agreements under the Consumer Credit Act 1974. 1 catalogue did not have an agreement. Without this it is illegal for them to chase a debt. With this information i have negotiated a reduced settlement figure.

Template letters agreement requests can be found on the Consumer Advice Group site. If you haven't visited this site - you should! It really is worth a look before you make any decisions.

Good luck

tyllwyd

The 'life and savings insurances, mortgage cover £120' - that's a big chunk of money. What does it include? Is it an endowment for your mortgage?