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Defaults coming

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jones_guitar
jones_guitar Posts: 172 Forumite
Part of the Furniture 100 Posts Combo Breaker
edited 23 August 2024 at 9:49PM in Debt-free wannabe
Hi, I posted here recently. This past year was the worst year I had in a good while.

I was in and out of employment and ended up living at home with my parents.

I won't go into it, but I ended up 15k in debt.

I got a new job. However, am fearful of the future. I feel I am better off saving an emergency fund and defaulting everything. I do have two mortgages. The second has an 11.4 interest rate. In all honesty was my priority.

So far nothing as defaulted. Any advice would be appreciated.

Aqua CC, Vanquis, Lendeble Loans, Zable CC, Virgin Money CC, Zopa CC, Samsung Finance.

This isn't a decision I am proud of. But, I'm screwed if something happens work wise.
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Comments

  • fatbelly
    fatbelly Posts: 22,993 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    The debts you list are nonpriority.

    However, the 11.4% mortgage sounds horrendous. Before the defaults hit, can you move that to a better rate?
  • Na, I missed payments already. I was in the middle of remortgaging when I quit a job.

    It is only a.small second charge at £35,000. But, yes getting rid of this is.more important to me.
  • stu12345_2
    stu12345_2 Posts: 1,576 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 24 August 2024 at 8:28AM
    you say you're screwed if you lose your job. yes the first 2 years in a new job is the worst, you get very little employment law  protection if they decide to get rid of you.

    imo I'd save min 3 months worth of payments to cover life's outgoings ( excluding consumer debts repayment amounts)and keep paying that high interest mortgage at same time.

    but keep it below £6000 if you need to claim any  DWP benefits if you ever lose your job through no fault if your own.

    consumer credit debts can take a backseat in the meantime.just monitor what letters they send you 

    emails and phone calls can be ignored 
    Christians Against Poverty solved my debt problem, when all other debt charities failed. Give them a call !! ( You don't have to be a Christian ! )

    https://capuk.org/contact-us
  • I read some comments about some creditors not defaulting? Is there any guidance about when default should appear?
  • stu12345_2
    stu12345_2 Posts: 1,576 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 24 August 2024 at 9:43AM
    3 to 6 months is the norm
    Christians Against Poverty solved my debt problem, when all other debt charities failed. Give them a call !! ( You don't have to be a Christian ! )

    https://capuk.org/contact-us
  • fatbelly
    fatbelly Posts: 22,993 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    The guidance says 2-4 missed payments but it mostly seems to be ignored

    https://www.scoronline.co.uk/key-documents/
  • Hi Stu, what did they do for you?
  • stu12345_2
    stu12345_2 Posts: 1,576 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 24 August 2024 at 10:22AM
    they gave me a debt relief  order, dro , when others would not., is that what you mean

     I did the long dmp, didnt want to do it after a period of time, I wrote cca letters, they all came back valid, I tried full and final settlements, could only afford one of them, which was decent,

    so, I dropped hours at work via a new job, asked for write offs, only one accepted.

    then went for dro, as a nuclear option to get out of debt and keep  my car, CAB or moneywellness hit me with barriers.

    but Christians against poverty were not awkward and got dro yesterday via them
    Christians Against Poverty solved my debt problem, when all other debt charities failed. Give them a call !! ( You don't have to be a Christian ! )

    https://capuk.org/contact-us
  • Brie
    Brie Posts: 14,772 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    If you have a mortgage presumably you own a property in which case unfortunately you won't be able to get a DRO that stu suggests.  

    That said I do suggest you talk to some debt advice agency to help you get things sorted.  StepChange, NationalDebtline, CAP (that stu suggests) or CMA (Community Money Advice) will all help you contact your creditors and come to some arrangement with them.  There are other organisations that do debt advice as a business but are best avoided as you end up paying them rather than your creditors.  CMA will help organise a DIY debt management plan and all correspondence can be through them if that makes things easier for you.

    Meanwhile I suggest not to ring, text or email anyone but to do everything by post so that none of them get too many contact details for you and have ways to harass you.  Or set up a dedicated email address that is just for your debts so you can separate them from your personal life.  

    Short version of advice is to stop paying all the cards/loans and keep plugging away at the mortgage.  Tell the card/loans that you won't be paying until further notice.  They will come back and ask for a budget to verify you can't afford to pay.  The debt advice agencies are ace at doing these which is why it's great to engage with one of them.  

    Best of luck sorting it - it will take a while but loads of people succeed.  
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  • Rob5342
    Rob5342 Posts: 2,425 Forumite
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    Brie said:
    Tell the card/loans that you won't be paying until further notice.  They will come back and ask for a budget to verify you can't afford to pay.  The debt advice agencies are ace at doing these which is why it's great to engage with one of them. 
    If you are planning to do a DMP then I'd advise that you stop paying the debts, say nothing at all to them, and dont set up anything up with Stepchange/Payplan until you have defaulted. Stepchange/Payplan act to recover as much as possible for the people you owe money to, that approach can make things twice as bad for you. 
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