What would you do?

Maskface

enthusiasticsaver said:

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. 

If it is an unsecured debt they can apply for a ccj if it isn't paid. They can also apply for an attachment to earnings which is a lot easier once a ccj has been granted. A car is an asset. As a former debt counselor for a bank I was quite surprised you advised her to just ignore her debts because they will get written off eventually. I think that's quite irresponsible and dangerous advice which Martin certainly wouldn't advocate on here, and which we both know will make her situation a hell of a lot worse. 

stymied

Given the high interest rates, does that mean your debts haven’t yet defaulted? If I’ve understood these boards correctly that’s the first step if you’re going for a DMP. Someone please correct me if I’m wrong.

Have you put in complaints on the grounds of affordability to the payday lenders?

Hopefully one small step at a time will help you feel you’re on firmer ground. Neither selling up nor working more than the occasional Saturday sounds like a good move right now.

Have you pursued looking for a job closer to home?

PM22

I only work 12 miles away from home and definitely cannot find a job closer, nor could I face changing jobs again. I have Bipolar disorder type 1 but I am doing alot better than some people with this disorder who cannot even work. I just think working more will destabilise my condition. I'm fed up. I'd die of shame if I got a CCJ and an attachment of earnings and my employers knew

fatbelly

I've had a look at your soa and considered your question ''what would you do?'. To be clear, I'd stay where I was.

You can afford the mortgage, the council tax, gas electricity and water, and around £80 per week for food. That's good.

There isn't much left for debt repayment but they're all non-priority so token payments for now. If there's a gap before that starts, so much the better as they can issue a default and freeze interest and charges.

If you can get out of your overdraft, fine. Otherwise open a new account with a different bank, switch all income and direct debits into it and the £250 to Natwest just becomes another debt.

I think you need to keep on to ILM to drop you on mental health grounds. The worst case scenario is that it becomes another debt. There's a letter you could adapt here

https://www.nationaldebtline.org/sample-letters/write-off-debt/

I'd also have a go at getting rid of the 118 debt and payday loan (there's a link for 118 within the article)

https://debtcamel.co.uk/payday-loan-refunds/

The friends will have to understand you can't repay ATM

I'd review things in six months. 

Oh, and it seems you are only getting Child Benefit. I think you could get a similar amount in Universal Credit - check https://www.turn2us.org.uk/

Maskface

But they won't because you are making repayments. The issue is working out where you can make further savings in your budget and a number of areas have already been highlighted which you don't seem to have commented on. Particularly how much you could be saving on your mortgage.

PM22

I haven't made payments for months

Maskface

Then you need to scroll back and look at the suggestions people have made after going through your SOA. 

PM22

The mortgage is in my ex husbands hands. I’ll ask him to fix it

Sewn

I wouldn't move to rented, reason? you mention using the equity to pay off your debts and pay your rent for a few years, but the key issue is you need your Bipolar to be stable so you aren't having the manic spending sprees otherwise you will just rack up the debt again, are you on medication for this? are you being reviewed regularly? obviously I'[m not going to offer medical advice but unless the reason for the debt is addressed, what will stop it happening again?

sourcrates

PM22 said:

Like ditch the car and cycle to work….24 miles a day, when most of the time I can barely survive I’m either high or suicidally low….it takes a lot for someone with my disability to make changes and the changes suggested don’t answer my burning question. Should I stay and ride it out or move into a rental to get the creditors off my back. 160k equity will pay the rent for a decade….hopefully I’ll be dead after that 

I know its difficult when lenders are hassling you for money, but really, all you have to do is tell them in writing that you cannot pay due to your current financial and mental health situation, and that you are seeking advice from one of the debt charities'

Tell them to put all collection activity on hold, and only contact you in writing from now on, no phone calls or emails/texts etc.

Explain that this is your statutory right under GDPR regulations.

There is nothing stopping you making token payments should you wish too, why wait for the 3rd party to get into gear, although its only a short term strategy, I think in your circumstances it would ease the pain to some extent, the sooner you have even a temporary arrangement in place, the sooner collection activity will stop, as that appears to be the pressing issue here.