Redundancy, remortgaging and debt

nachocheese

Hello all,

Just a quick one for a quick advice.

So my husband has just been made redundant. We have lot of debt. And can remortgage from 2nd of February.

I was looking at doing self managed DMP.

A few of my credit cards need paying today 30/01. 

My question is: do I stop paying them now to start the process of defaulting? Or after 2/2 when we remortgage?

Thank you

RAS

Go into your your account on existing provider's website now, select the best option and fix. Can be done 3-6 months ahead and requires no credit check, providing you are up to date on the mortgage.

You could try a mortgage advisor now but if you've already got a sizeable amount of debt and redundancy that's likely to impact on the value and rate anyway. But before you do that ask on the Mortgage forum here as there are some very good advisors who'll respond.

nachocheese

RAS said:

Go into your your account on existing provider's website now, select the best option and fix. Can be done 3-6 months ahead and requires no credit check, providing you are up to date on the mortgage.

You could try a mortgage advisor now but if you've already got a sizeable amount of debt and redundancy that's likely to impact on the value and rate anyway. But before you do that ask on the Mortgage forum here as there are some very good advisors who'll respond.

Thank you for your reply.

I have tried to do that already and the earliest date we can fix is 2nd of Feb as our mortgage expires 2nd of August. In this current situation we will stay with current provider.

I just don't know what to do with my credit cards for now - pay today before we fix? Or start not paying now with the view with defaulting to do self managed DMP? 

RAS

Since there isn't a credit check when you renew, it doesn't matter which you do from the point of view of your mortgage.

You might be better having this month's credit card payments in an emergency savings account? And do make sure that is adequate before you start a DMP. And that the accounts have defaulted, as that reduces the length of time your credit record is damaged.

nachocheese

RAS said:

Since there isn't a credit check when you renew, it doesn't matter which you do from the point of view of your mortgage.

You might be better having this month's credit card payments in an emergency savings account? And do make sure that is adequate before you start a DMP. And that the accounts have defaulted, as that reduces the length of time your credit record is damaged.

Thanks for replying, such stressful time redundancy is totally out of the blue and after long service too. 

Re your first point - that is what I was thinking but wanted to confirm as my brain is really frazzled as we are both in total shock!

Re your second point - agree with all, as I have been reading this forum for long time so understand the steps for DMP (or at least the general idea)

Brie

Hopefully the redundancy came with a decent payout - admittedly some companies are better than others.  

My best guess (though RAS is an absolute expert) is that if you don't pay your cards now that that even if the bank did check the card companies wouldn't have a chance to report a missed payment.  And it would only (presumably) be one missed payment rather than a defaulted account at this point.

Hope things get sorted sooner rather than later for you and you weather the storm.  Don't forget to breathe in the meantime.  It will help relax you and allow you to think more clearly.

nachocheese

Brie said:

Hopefully the redundancy came with a decent payout - admittedly some companies are better than others.  

My best guess (though RAS is an absolute expert) is that if you don't pay your cards now that that even if the bank did check the card companies wouldn't have a chance to report a missed payment.  And it would only (presumably) be one missed payment rather than a defaulted account at this point.

Hope things get sorted sooner rather than later for you and you weather the storm.  Don't forget to breathe in the meantime.  It will help relax you and allow you to think more clearly.

Thank you for taking time toi reply. We are in shock But hopefully there is a light at the end of the tunnel. 

fatbelly

Brie's instinct is correct. If you fix your remortgage on Monday, there would not be time for anyone to report a late payment, not that it matters.

And RAS is right that the money is better in your emergency fund.

It sounds like you are embarking on a journey Start a thread on Debt-free Diaries?

nachocheese

Hello all, a quick update: so I thought (saw somewhere? No idea... Where did I take these 6 months from?) that we could renew our mortgage with Santander today, but their app now says 4 months before end of the deal - which will be in April.

With my husband losing his job this month and me starting on my self-managed DMP (which equals missing CC payments) where do we stand with remortgaging now? Is it advisable to still repay my CC debt until we lock in with Santander in April?

Thank you in advance

sourcrates

Credit card is non priority debt, and can be ignored for now, you have no income so do not prioritise non essential debts, ever.

As per the previous post, a re-mortgage with your current lender should be fine as no credit checks are done, but can you afford this now with no income, have you a plan B??.