Feels like im going under!

sourcrates

NiteEyez1980 said:

Hi Guys,



My wife and I need a fresh start so January 2023, from food, to finance to everything can be met with a fresh approach (i.e. bare minimum), and from now I will budget down to the last penny (professionally I am very good at budgeting so will go down to the last ounce, as we badly need an emergency fund for tyres, mot, service etc, yet this always gets eaten into - and then Mr CC takes up the slack) 

As someone who this has strung out, and probably isn't in the best place mentally on this, can you let me know what actions i can expect from them?

Once they get the message, I assume I will be bombarded by calls (easily avoided as no landline) and letters.

what the next steps after that?

Debt collection is a very, very slow process, missed payments may be allowed to accrue for up to 3/4 months on an account without much in the way of contact, any longer than that, and the letters will start to arrive, creditors will also try to phone you, to ascertain why you have not paid.

Next, your accounts would be transferred over to your creditor's collections dept, who will again attempt to contact you, this collection activity may continue for some months.

The next stage will likely be an external debt collector may be engaged to obtain payment, they will run through their series of collection letters with you, and attempt to call you as well, usually after around 3 months of no contact, the account would be returned to the original creditor.

At this point a commercial decision is made, either the debt will be passed to another DCA to attempt collection, or it may be sold to a debt purchasing company, or it may be deemed uncollectable and side-lined, it`s the creditors decision to make.

Somewhere along the way, the account will (hopefully) have been defaulted, so all interest will have stopped, original creditors very rarely take action through the courts, that is left to debt purchasing companies, if you ignore them for too long, the best point in time to start debt management is when your debts have been defaulted, it can take a long time for this to happen sometimes, so its best judged on a case by case basis.

I re-call you mention "bailiffs" in an earlier post, any and all legal action for consumer debt must adhere to the civil procedure rules, this involves a process where a "letter before action" is the first step in the legal dance, if arrangements are not made at this point, next will follow a claim form, should a CCJ be awarded against you, and you make no attempt to pay it, then a creditor has a few further options, they can garnish your wages, they can engage a bailiff to call on you, they can place a charging order on your home.

None of this should be a worry, because once up and running, as long as you are paying your DMP, no further action will usually be taken to recover the debt, as a homeowner you have to be careful about how far you push things with creditors, as your home is a valuable asset, and non-payment of an unsecured debt can, very rarely, lead to a charging order being issued, so you must keep that in mind with every decision you make.

NiteEyez1980

Hibguys

Been off this week. Whole face is killing me, Abcess burst so have had the lesion hurting, pain in face, swollen face and all the side effects from the painkillers and antibs you can imagine.

I think I am so run down and stressed that my body has basically waves a white flag.

OK, sourcrates had responded on the stepchange and I'm not sure my mind is in the right place to accurately digest the advice.

My wife has a call from our mortgage broker who got a 'secured' loan company to ring her offering her a way out at about 10% interest which would save us about £300 a month.

She explained our plan and he has basically put the fear of God into her that we will:

Lose our house
Have bailiffs knocking our door
Never get credit again
Mortgage taken away
End up in court 

She has totally gone the other way now and doesn't want to do the plan. 

I was going to do it in Nov and now she has visions of a Eastenders, the moons get evicted from the Vic scenario on Christmas day. 

No joke this will be a marriage ender. If we (I) do this and the harbinger of dooms prophecy comes true! 

elsien

I think I'd be putting a complaint in to the secured loan company about misinformation.
Turning an unsecured debt into a secured one gives a far higher chance of losing the house if things go pear-shaped. 
You’re In Debt: What Can Your Creditors Actually Do? (moneyaware.co.uk)

I hope you start to feel better soon. 

Makingabobor2

I agree with @elsien there

Hope you feel better soon. 

kimwp

NiteEyez1980 said:

Hibguys

Been off this week. Whole face is killing me, Abcess burst so have had the lesion hurting, pain in face, swollen face and all the side effects from the painkillers and antibs you can imagine.

I think I am so run down and stressed that my body has basically waves a white flag.

OK, sourcrates had responded on the stepchange and I'm not sure my mind is in the right place to accurately digest the advice.

My wife has a call from our mortgage broker who got a 'secured' loan company to ring her offering her a way out at about 10% interest which would save us about £300 a month.

She explained our plan and he has basically put the fear of God into her that we will:

Lose our house
Have bailiffs knocking our door
Never get credit again
Mortgage taken away
End up in court 

She has totally gone the other way now and doesn't want to do the plan. 

I was going to do it in Nov and now she has visions of a Eastenders, the moons get evicted from the Vic scenario on Christmas day. 

No joke this will be a marriage ender. If we (I) do this and the harbinger of dooms prophecy comes true! 

So, you've been given all the information that there is to give and is needed to decide on your next steps, so I think it might be worth you re-reading the thread, but in summary:

Your SOA shows that you don't have enough income to pay more than your expenses (unless you cut back, but you probably need to start saving that new money for when something goes wrong, currently your tooth (much sympathy for that, tooth pain is awful!)
......so there is no money to pay this suggested 10% loan and you will likely default on it.

It is much worse to default on a secured debt than an unsecured debt.

Re-posting another poster's comment:
With unsecured debts, the debt is not secured against anything like your house or belongings, hence the name and also the higher interest rates (as the creditor is taking more of a risk). So bailiffs shouldn't be an issue. https://www.investopedia.com/terms/u/unsecureddebt.asp 

NiteEyez1980

This has really set me back where my wifes concerned. I'm fuming.

My wife has asked if we can/should default on the ones without 0% interest as a middle ground as in theory 2 of the cards equate to about £150 a month.

The thing is because a 'pro' has told her this (and tbh my wife is quite a fearful person by nature anyway) , as soon as anyone pitches up at our door she's going to go into a meltdown, think I've lied, on a 1 way path to ruination and iall be looking at a divorce. 

Makingabobor2

Oh dear....I really think you need to get your wife to read all the comments and advice you have been given on here. The people advising you here, really know what they are talking about and are not giving advice for any financial gain to themselves.....unlike any loan company that you may talk to.  If you follow the advice on here, you will NOT get people knocking at your door, but if you take out a secured loan of any sort and then can't pay, then you may well do. You do not have any spare funds to do anything other than follow the advice you have been given.  Please, please get your wife to read this thread and other threads on here. 
Good luck and I do hope the tooth improves. 

NiteEyez1980

Hi guys 

To clarify THERE IS NO WAY IN HELL that i/we will consolidate or take another loan out.

The mortgage advisor is a friend of wife and was calling us up to basically confirm the cancellation etc of the original remortgage that was due in October.

They got talking and when she was asked what we are going to do my wife explained. The advisor worked my wife into a frenzy and got a loan company to phone her. 

They only asked a few questions quoted a 10%Apr (at least) and then instilled the 'fear' 

I 100000% appreciate the advice and support.

Ina perverse kind of way to ease my wife in and shown her, do I just default on the non 0% Apr to show her? 

Retireinten

I second getting your wife to read this thread from start to finish... Get her to read it today!

If you want to massively increase the risk of losing your house then go ahead and change unsecured debt to secured debt.

If you default the new loan you could lose your house.

The 'pro' she is using is being paid to sell you a secured loan. Either that or she really hasn't fully explained your situation to him... either way his 'advice' is not appropriate for you.

If you default an unsecured debt the worst they can do is send a few letters, make a few phone calls, add a bit of interest and if they are minded to, take you to court eventually... where you may be ordered to agree to an affordable payment plan (but if you can't afford it, the courts won't make you pay).  

HOW DO I KNOW THIS?

I've managed debt collection teams on and off for years...we really don't have much power at all and we have to consider cost versus scope for successful debt collection at every stage in our debt collection strategies. Most debt collection agencies go down the default/court route in the hope that the threat of a trashed credit rating is enough to get you paying.  But once it's trashed, it's trashed!

In your situation defaulting is the best way to go, you simply can't afford the repayments as they are or wrapped in a 'cheaper' (monthly) but riskier secured loan. You will default eventually, best to do it now so you can take control sooner. 

NiteEyez1980

Honestly there is No Way we will consolidate or take a loan, I guarantee that