Default Accounts

Conan1Sett

Hello,

I currently have four accounts that are overdue and part of a Token Payment Plan. I pay £1 to:-

Aqua Credit Card
118 118 Credit Card
Santander Credit Card
PayPal Credit
Barclays Overdraft

The total is £6k.

The Step Change Charity handles my repayments. They only really offered me a Token Payment Plan and no other options. I was hoping that they would place a Charging Order on my property to cover the full amount but they didn't. Is this an option in the future possibly?

All creditors still send me reminders and statements. Are they supposed to terminate charges and interest? 

I just feel like there's more to come from the entire episode. A TPP is supposedly only a temporary 12 month arrangement.

sourcrates

You would be best advised to avoid a Charging Order, one can only be obtained after a CCJ has been granted anyway, and as all your creditors are only owed a little over a grand each, it`s never going to happen.

From the basic information you have given us, a TPP is only a temporary measure, if your financial situation has not improved after 12 months, and is unlikely too, then possible write off`s may be on the cards, I can`t say for sure as you don`t delve too deeply into your circumstances.

MovingForwards

You honestly do not want a charging order on your home. Congratulations for buying a property as it was looking dicey last year for you. Please don't try to consolidate and buy your way out again as you've seen it doesn't work and definitely don't think about adding it to your mortgage either.

If you put up a statement of affairs, we can have a look and see if there's better ways of dealing with this rather than dragging it out.

Conan1Sett

MovingForwards said:

You honestly do not want a charging order on your home. Congratulations for buying a property as it was looking dicey last year for you. Please don't try to consolidate and buy your way out again as you've seen it doesn't work and definitely don't think about adding it to your mortgage either.

If you put up a statement of affairs, we can have a look and see if there's better ways of dealing with this rather than dragging it out.

Well last time I was in this situation I was able to use a DMP to pay the balances. They didn't offer me that this time.

However, since I began the Token Payment Plan, I have £500 in extra monthly income. I will also have an extra £100 in extra monthly income starting January. Also at the end of the tax year I will get a rebate of at least £1k as it stands.

I am hoping, then, if no charging order...

...maybe I can begin a DMP when I submit my new budget?

Just what is the devil with the charging order by the way? It's just that with a charging order wouldn't the debt be covered? 

Is there a risk at all in any of this that I could lose my mortgage and home? My mortgage and all other bills and credit are up to date. 

MovingForwards

To get a CO it would mean they have a CCJ against you first, which increases the debt further, the CO increases costs again and a CO is just a way of enforcing the debt; they wait patiently until you remortgage or sell the property. Meaning you get less back from the sale as the mortgage company have first dibs, then the CO's and you get what's left.

A charging order, or several in your case, would prevent you remortgaging to a new lender as they'd expect the CO's to be paid off before lending the money.

As you've got an extra £500pm and expecting a tax rebate, there's no reason why you can't look to settle the debts, either in full or part. Quicker they're dealt with, the quicker your credit history begins to repair.

Post up a statement of affairs as without it we can't see why SC are saying token payments.

sourcrates

Conan1Sett said:

MovingForwards said:

You honestly do not want a charging order on your home. Congratulations for buying a property as it was looking dicey last year for you. Please don't try to consolidate and buy your way out again as you've seen it doesn't work and definitely don't think about adding it to your mortgage either.

If you put up a statement of affairs, we can have a look and see if there's better ways of dealing with this rather than dragging it out.

I am hoping, then, if no charging order...

...maybe I can begin a DMP when I submit my new budget?

Just what is the devil with the charging order by the way? It's just that with a charging order wouldn't the debt be covered? 

Is there a risk at all in any of this that I could lose my mortgage and home? My mortgage and all other bills and credit are up to date. 

The charging order process is in stages, and you have the opportunity to have your say at every juncture, but essentially yes, you would be putting your home at risk.

Although your debt is quite small, there is a vague possibility a CO could be granted, and although very rarely used these days, an order for sale can be made to the court, so yes, they could, in theory, force the sale of your home to re-pay the debt.

Now in practice, this is extremely unlikely to happen, but I`m just trying to get across to you the seriousness of having a charging order granted against you, it is something you should avoid, especially for a paltry 6k.

You don`t need permission to have a DMP, if you can afford payments, set it up yourself, you don`t need any 3rd party approval, just go self-managed.

Conan1Sett

Income: £500 per month
£285 per week
Total: £1640

Mortgage: £242
Council Tax: £110
Water: £30
Electric: £75-£100
EE: £120. Reducing to around £30 in December
Loan: £134
Loan: £161
TV: £14
Klarna: £15
G Drive: £2
Specsavers: £13

So I make it around £950. For sure I will use the spare cash from my reduced phone bill to make repayments. 

Do I have it right that all interest and charges are frozen when a default notice is issued? 

sourcrates

There`s about 101 things missing from that SOA, food/clothing/any car associated payments etc etc etc.

Please use this link, when completed, click the "format for MSE" button -

SOA Calculator (stoozing.com)

Interest and charges stop once an account defaults, yes that is correct.