Need Advice Please

Smokey_the_parrot

Hi Everyone

I talked to CCCS this afternoon and could do with some advice from you guys (these thoughts cropped up after I'd finished talking with them)

At the moment I am unemployed hoping I shall find work in December. The advice was to talk to my creditors straightaway to stop anymore payments being taken out of my account for a while.

I owe
Cahoot Flexiloan £8115.40 Payment of £162 pm interest rate 15.9%
Lloyds TSB Loan £15017.36 Payment of £380 pm interest rate 6.9%
Lloyds Credit Card £14968.93 Payment of £300 pm interest rate 19.589%

My question is since I bank with Lloyds do you think they will do anything to my current account like freeze it?

My main worry is that I don't want to lose the house I live in - there is no mortgage to pay and at the moment the house is still in my fathers name he has been deceased for 2 years he didn't make a will but I have the authority to dispose of his estate but I never bothered getting the house transfered into my name - could I still lose it if I am forced by my creditors to go bankrupt?

When I get a job I still feel that I cannot any longer afford the minimum monthly payments on the loans - can anyone see a way out of this for me as I want to pay my creditors what I owe them.

How badly will it affect my credit rating when I notify my creditors that my circumstances have changed - I have been wondering when I get work whether it would be cheaper to extend my lloyds loan back to 25,000 and get 10000 paid off the credit card which has 3 times the interest rate.

My original thought was to get a secured loan or mortgage on the house and pay off the lot but CCCS advised against this. Just want to be debt free ASAP any advice is welcome.

Many Thanks
Smokey

Snaggles

Hi Smokey!

Firstly, I think the CCCS are right in saying it's not a good idea to get a secured loan to pay off your debts. In any case, if you are not currently working, you would really struggle to get one - you would definitely be looking at the sub-prime market, and this means any interest rate you were offered would be high.

If you are unable to make payments on your debts, this WILL affect your credit rating - if your creditors register a default, it will stay on your file for 6 years, and obtaining further lending WILL be more difficult.

Sorry, don't mean to sound all doom and gloom, but at the same time, there's no point in me lying and saying it wont have any effect.

Are you looking for work at the moment? What sort of line of work do you do? Do jobs in your field come up fairly regularly? Once you are working, the CCCS may be able to assist further, possibly with a DMP (debt management plan). At the moment, because there is no money to offer your creditors, they can't do this.

What I would suggest is that you open a basic bank account somewhere (with a bank that you DON'T owe any money to), so that any income you do get can be paid in, and wont be taken by Lloyds for loan repayments (they may well try and take money out of your account once they become aware that you are having financial problems).

Good luck with your job hunt, hope you find something soon.

MKDon

Great post by Snaggles as always.

Hope this will bump it up a bit because there are a number of issues that need to be addressed (title to the house, benefits etc), hopefully someone will respond in the morning.

Snaggles

MKDon wrote: »

Great post by Snaggles as always.

Thank you!

*blushes furiously*

Smokey_the_parrot

Thanks Snaggles

Yes I am looking for work and hope to find a job within next 4 weeks. I am the only applicant for one job (not been advertised yet and I am hopeful they will interview me first) they have asked my previous employer for references so I am expecting an interview date soon. Salary range is 14,000 to 16,500.

I have 23 other applications in, waiting for closing dates to terminate. Also been to temping agencies and one of them said as soon as I submit an up to date CV (working on that today) they think they will be able to find work for me within 2 weeks however it may be a temporary contract. But it will mean I get paid weekly instead of monthly. My career has been Office Manager/PA/Administrator. So I don’t think it should be too difficult finding work. I am also looking for extra work in any field on an evening/weekend.

A debt management plan sounds fine to me if my creditors would accept it. I was only concerned about my credit rating being affected because I was considering consolidating the debts to a more manageable figure. After these debts are cleared I have no wish to get into any more debt so credit rating wouldn’t matter.

The reasoning behind considering a mortgage/secure loan was that if my creditors were going to force me to go bankrupt on the unsecured debt I’d lose the house anyway so I was just trying to find a way to keep it. The payments would reduce to somewhere around £275 pounds a month in comparison to the £842 a month I pay now. When I’m back in employment I know I could cope with £275 a month but would struggle on the current figure I have to pay. At the moment my credit rating is very good; I have never defaulted or been late on a payment ever.

The other option available would have been to increase the personal loan to 25,000 for around the same monthly repayment of 380pm and lop 10,000 off the credit card that has an APR of 19.589%. Then transfer the balance remaining to 0% credit card offers. Then once that was paid off do the same with the cahoot loan put it on a credit card and shuffle them at 0%. This obviously would be a better and cheaper option than a secure loan on a variable rate for 25 years. However I presume it would be well nigh impossible to do the above if my credit rating suffered.

The one thing I am worried sick over and its giving me sleepless nights is losing my home, the CCCS said it’s unlikely but there is a slim chance I will.

My most pressing need at the moment is to find a regular income

Any advice is more than welcome if others can see a different way around the problem once I have found work.

Thanks once again
Smokey

aarhus_2

bumpity bump

MKDon

Hi Smokey,

Good luck with the job hunt, it sound like you are doing as much as you can to find something quickly. Temp jobs can lead to full time, some employers like to "test drive" new staff as temps, then make them permanent once they have proven themselves reliable and capable of doing the job, it worked for me

One of the problems with taking out secured debt to replace unsecured is that there is a greater risk of losing the house. You could try making a budget to include "token payments" to your creditors, making those small payments will show that you are not trying to avoid the debt, but just having a few problems paying the full amount at the moment.

Have you applied for Council Tax benefit etc while you are unemployed? The last thing you need at the moment is the council chasing you for money.

RAS

Hi

Can you take a lodger? To get you over the hump? You can get up to £4,500 per annum before you have to pay tax on the income.

What is the maximum on your Cahoot Loan?

With respect to the estate, are you suggesting that you have Letters of Administration?

Since your father died intestate, are you sure that under intestacy rules, the whole house goes to you and roughly what is the value (any IHT to pay?)

MKDon

By the magic of MSE DFW, along comes RAS, who has picked up on my concerns regarding the house. If OP doesn't mind, I'll read and learn

Great idea about the lodger BTW, but some people done like their personal space invaded, me included. However, sometimes needs must!!

Smokey_the_parrot

Hi Mk

Thanks for the post.

I thankfully will not have the council chasing me for money I have always paid my council tax in full as soon as the bill has arrived – so I assume I will be getting some money back off them. (However I guess in the future I will be paying them monthly).

I have been drawing up a new budget to include token payments it was one of the suggestions CCCS made the nice man said even just offering my creditors £1 they would have to accept that in my circumstances at the moment. However it would affect my credit rating but not as much as defaulting and not communicating with the creditors.

Thanks for your time MK appreciated.

Smokey

Smokey_the_parrot

Hi Ras

Thank you for your response.

The maximum on the Cahoot loan is £10,000 (However not done anything with the credit available on it – didn’t seem right to knowing I could very well struggle to pay it back – but have it in mind when I’ve found work to maybe use part of it to clear any debt on credit card I couldn’t transfer to a 0% card).

By the way does anyone know what the maximum amount is that you can transfer to these 0% cards? Could I have more than one 0% card at a time? Split the debt on the existing card between two of them?

Regarding the estate yes I have letters of administration – no thankfully the estate falls well below the IHT level. Yes the whole estate goes to me there are no other surviving members of my family.

Regarding taking in a lodger, well that’s always a possibility however I tend to think like MKdon here I don’t particularly relish the idea of someone invading my space – but then again if it made the difference in whether I could keep the house or not I’d take the lodger. Thanks for the info about how much I could earn before having to pay tax didn’t realise that I thought I’d have to pay tax on all of it.

Thanks a lot for taking the time to respond

Smokey