How to manage my debt & debt collections agencies

BlueSkyProspero

Hi all,

I have accumulated just over £15K of debt over the last 3 years, due to a nightmare situation with the property I own having damp and my having to live elsewhere whilst paying the mortgage and being unable to let it out. I have got into debt using credit cards to get by on a day to day basis, and by not paying utility bills. I have exhausted all possibilities regarding claiming any compensation / insurance for the damp damage and having employed the services of a lawyer I know my only option now is to pay for the repairs and try to sell the property and hope beyond hope I manage to cover the costs of everything through the proceeds.

Anyway, in the meantime I have £15K of debt. The good news is that as of 2017 I have managed to gain new employment and a higher income, so I am no longer going into debt each month just getting by, and my income just about covers my outgoings.

The bad news is that I'm afraid I stuck my head under the carpet for 6 months and all the debts have been transferred to different debt collection agencies during that time. I am getting all the phone calls, sometimes up to 10 a day. I am terrified to check my credit file - no point really - and I know that I need to pick up the phone and speak to these people. I am also riddled with shame and guilt over how I have managed this - I know this doesn't help and I am trying to think practically, but nevertheless I have been feeling pretty rubbish about myself.

I did have an arrangement with StepChange as I was paying each creditor £1 per month, but that stopped last summer and I am now on my own as Step Change say they can't continue working with me after 2/3 years, although they are happy to advise informally.

My question is how best to approach these agencies? Although my income is better than it was, I still don't have any surplus income to pay off the debt in large chunks and am scared this will go on forever.

I assume I can't consolidate all this debt into one as no lender would touch me, so i guess I am going to have to deal with each creditor? There are 8 individual ones.

I would be grateful to hear your thoughts and advice on how I should proceed.

Thank you

sourcrates

Hi,

First you need to know the status of each account, you say they are with debt collectors, but have the debts been sold on, or are the DCA`s just managing the debts, or a combination of both ?

A quick look at any letters should tell you this, if they refer to "there client" then the debt is still with the original creditor, you would usually be informed in writing if a debt is sold on.

When the property sells, would you have enough to clear your debts in full ?

You really need to post an SOA on here so we can advise correctly on your next move.

Link here :

http://www.stoozing.com/calculator/soa.php

BlueSkyProspero

Thanks for your help so far. I have done the SoA below. I have estimated the value of my property based on Zoopla and based on getting the damp repairs done and the lease extended. Based on estimates I have been given all of this would cost me around 35K (20K for damp work / tanking / building work and 15K for the lease). As you can see if I were to sell the property for £180K then this would just about cover those costs. It does not include the costs of solicitors and estate agents, which I would estimate at between 10-12K total to include the current legal fees. Any additional money I can raise through the sale could go towards the debts, but it is tight.

It would be great to hear forum users' thoughts based on this.

Thank you!!


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2450
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2450

Monthly Expense Details
Mortgage................................ 400
Secured/HP loan repayments.............. 0
Rent.................................... 1000
Management charge (leasehold property).. 5
Council tax............................. 163.5
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 14.55
Satellite/Cable TV...................... 0
Internet Services....................... 12.45
Groceries etc. ......................... 125
Clothing................................ 25
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 210
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 21
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 7.5
Life assurance ......................... 0
Other insurance......................... 11
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 50
Emergency fund.......................... 30
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 2305


Assets
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 180000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(400)......0
Total secured & HP debts...... 130000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card..............2260......25........0
Lloyds card....................1500......10........0
John Lewis Card................1300......10........0
Council tax arrears ...........2600......75........0
Santander Credit card..........7800......25........0
Total unsecured debts..........15460.....145.......-


Monthly Budget Summary
Total monthly income.................... 2,450
Expenses (including HP & secured debts). 2,305
Available for debt repayments........... 145
Monthly UNsecured debt repayments....... 145
Amount left after debt repayments....... 0

Personal Balance Sheet Summary
Total assets (things you own)........... 180,000
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -15,460
Net Assets.............................. 34,540

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

angelpye

I can't comment on the rest as I am stumbling around myself but I had tanking done and found a company that did it £4000 cheaper than another quote I had - they came recommended to me by a friend who knows a few builders etc and they did a fantastic job which is of course all guaranteed. Worth shopping around - that company was 50 miles away but were more than happy to travel.

RuthnJasper

Hi. I strongly recommend getting in touch with Christians Against Poverty. They are helping me at the moment and, honestly, I wish I'd called them sooner.


They are helpful, non-judgemental and it isn't their practice to force religion onto you. My case worker has clients who are Muslim, Buddhist, Christian and atheist, as well as one who describes themselves as a white witch. They should be able to help you to work out what the right solution is for you and they will continue to support you throughout the process.


https://capuk.org/ - this is where you can find them online, and they have debt centres around the country.


Very best wishes to you; hope all works out well. x

National_Debtline

Hi

You can negotiate with your creditors yourself for now. We have sample letters on our website to help with that:

www.nationaldebtline.org/EW/sampleletters/Pages/default.aspx

Did Stepchange say they can only deal with you for 2/3 years because you were making token payments? If you have £145 per month for debt payments, as your SOA shows, I’m wondering if they might consider a DMP for you now.

James
@natdebtline