What would you do?

PM22

Of course I can repay 200 per month from January, when my course is paid off 

Maskface

Am I reading your state of affairs all wrong?

If you've got £235,000 cash assets but only owe £12k I can't understand why you're even on a payment plan with Stepchange? Or is your flat the cash asset? Because technically it's not because you still have to sell it to get the cash. 

 "I owe someone £500 I owe someone else £1550"

If those people or your creditors saw your SOA above that you had £235,000 in cash assets they might wonder why you still owe them money? 

There seems to be a lot spent on electric and gas, your son could still help more than he is and might be a little more frugal himself if he had to contribute towards the electric. 

Groceries you're probably able to save on too. Try experimenting with the cat and find a cheaper food it will eat, like we did. It is possible. Farmfoods is cheaper for cat food, save their vouchers too for cheap washing powder etc.

Check out the Old Style boards too for meal planning ideas. You probably have enough basics in the cupboard to make a lot of meals very cheaply with the right ingredients. Cook in bulk and freeze it.


Good on you for laying it bare, it is never easy but there do seem some outgoings you could move about and changes you could still make. You may have to go cold turkey for a while on some of the things you've taken for granted. Ultimately you do need to look at your spending as many people earn a lot less but are still able to manage. 

How old is the very old car? How much of the money set aside for maintenance gets spent on it? You put aside £300 a year. Our last service cost us £800, tyres, exhaust, service, MOT. I don't think you are saving enough for the car and could possibly move money from elsewhere in your outgoings to top that up.

When push comes to shove, your car won't be seen as essential neither will £90 on a mobile phone or copious amounts of dental products. £350 on groceries may also be pushing it a little so yes, they could in theory go for a ccj or attachment to earnings because there will be some money technically still disposable although it's unlikely. However that's not really the issue for now. There are savings you could still make before it went anywhere near that.

You said you are trying to decide if you should sell up then say you can't downsize. You could potentially sell up and downsize, just get a new mortgage to include the debt to cover a smaller place so that may be worth looking at. Perhaps over a longer period. A £70,000 mortgage over 20 years at 3.49% interest rate is a total of £410.07 per month with interest being £203.58. Over 15 years it's £506.12 and interest only the same so still cheaper than what you are paying now. These figures are from any mortgage calculator app. Your mortgage is currently a third of your salary and could be less than a quarter, including all your debts paid off.

Your emergency fund of £10 isn't going to do much in an emergency so perhaps put that elsewhere.

PM22

the 235k cash assets refers to the flat that i live in.....my car is 2012

If I sold the flat, I could use th emoney for rent and pay off all the creditors to get them off my back 

Maskface

PM22 said:

the 235k cash assets refers to the flat that i live in.....my car is 2012

If I sold the flat, I could use th emoney for rent and pay off all the creditors to get them off my back 

That's only a ten year old car, which by today's standards is not really a very old car.

Most people would prefer to stay in their own property rather than rent especially when the mortgage is only a quarter of their salary and It costs over two thirds of their salary to rent a one/two bedroom in Crawley.

Having read the previous links there appear to be a number of inconsistencies in the various SOA's provided on different threads which make it difficult to help.


I wish you all the best.

PM22

Actually my car is 12 years old, just checked and I would use the equity to pay the debts and the rent which would last until I’m about 55, then I don’t know what I’d do 

fatbelly

You mentioned ccjs earlier.

If you are making token payments through stepchange there is little chance of a court claim. 

They may sell the debt to a debt buyer but then you just pay the new owner.

Debt buyers (like Lowell) tend to go for a ccj to stop the debt from going statute barred, but that will never happen while you are making payments.

PM22

I didn't know that 

sourcrates

What you must remember is that all unsecured credit debts are deemed to be non priority debts, which means they are the last to be paid from the pot.

Its rent/mortgage/council tax, utility bills and food which are the priority debts.

Everything else, no matter how hard they may bleat, or scream, is a non priority debt which can either be paid as per your disposable income allows, or not at all should it be unaffordable.

No legal system in the world can make you pay what you do not have.

PM22

I must try to remember this...I have terrible anxiety over it all at the moment and Step Change still haven't set up the token payment plan as they're so busy and so the creditors keep hounding me

enthusiasticsaver

Maskface said:

Can't you just release a bit of equity to pay the debt off? £12k is nothing in the greater scheme of things when you've got £150k equity to play with. With that much equity you might get a better mortgage interest rate if you renew it. Ignoring the debt is a bad move as you risk a ccj and then creditors can apply for an attachment to earnings. You'll also struggle even more to get a mortgage.

The house and mortgage are not in her name.  Creditors will not apply for CCJs as she has no assets to speak of except presumably a deed of trust stating the equity is hers.