What should I do? Against the Wall!

braken2000

Good morning everyone.

I could really do with your help guys as my mum is so up against the wall I think she has gone through it.

Where to begin...

She has been signed off work for the past 7 months and recieves very little in the way of income (just SSP which will turn to incapacity benefit). As such, we have been living off credit cards to survive (buy food etc).

She has racked up a debt to the tune of:

Credit Card One: £15000 (Maxed Out)
Credit Card Two: £2000 (I think)
Credit Card Three: £5000 (I think)
Overdraft: £1000
Secured mortgage: £25000
and the cherry on the top, working tax credits have "apparently" been overpaid and that goes to the tune of £4500

Because the main credit card (Credit Card One) is maxed out we are ever-nearing the point of no return. We cannot afford the minimum payments easily (It is either the minimum payments and no food or food and no minimum payments).

What should we do?

One of the main problems is the mentality of my mum. She believes that her credit score is everything. It is very good. But what use is it if it does not help with the debts.

I have suggested bankruptcy out of s sheer lack of other ideas.

If she were to go down this route, would she lose the house and would debt collectors be sent?

I am really worried about her and could really do with some help to get her out of this sticky situation.

Thanks in advance

Braken

trying-very-trying

Just reading this through quickly. If you go br, I'm sure you would lose the house if you have one. DMP might be a bettr option if you want to keep the house, but it will require your mother admitting that she has a problem.

If you can pop up a soa http://forums.moneysavingexpert.com/showthread.html?t=107280
The good guys on here will come up with loads of advice on how to cut back.

trying-very-trying

Are you sure that your mum is getting all the benefits that she is entitled to. There's a link to entitled to but I don't have it.

Found it http://www.entitledto.co.uk/

Broken_hearted

Contact the creditors ask for reduced payments and interest frozen explaining why. Send them a SOA if they ask. As for the credit score its tough she has to get past it being so important, there is very little maybe even nothing she can do to save it.

braken2000

I think we have tried to get reduced payments. They just were not having it.

Mmmm. What to do.

Broken_hearted

So you try again. If you can't make the payments you need to keep trying to get them lowered try with a full SOA and token payment.

trying-very-trying

It could be worth looking at one of the free debt counselling agencies, like payplan, national debtline, cccs or even citizens advice. But it sounds a bit like your mother hasn't yet realised the seriouseness of her situation.

Floss

Contact CCCS or National Debtline for help with handling the creditors.
Does your mum get any help with her mortgage?
Ask Tax Credits for a breakdown of how the overpayment has occurred.

Can you post a statement of affaors, togive us an idea of where your mum's money goes (see MSE Andrea's nwebie's thread for help).

Good luck :hello:

Floss x

christabell

Your mum will be able to have the interest of the mortgage paid from week 39, will she ( and you) go along to the CAB and get some proper advice? Please see what else she can do, e.g. transfer gas and electricity, phone bills, set a budget for food. I do hope she will get the help she needs

braken2000

I think we have had the mortgage frozen. But I will look into that. I am going to get a financial statement put together. It could prove some info to you guys.

Once again thank you for your help. You lot truely are the most helpfull people around.