Help! Going under!

BT55

Two years ago my partner (we are now splitting up) was made redundant, with only a couple of months redundancy payment. We put our property up for sale (£175,000), and borrowed money to send him on a plumbing training course and buy van/tools etc. The course took 10 weeks, during which time he was obviously not earning and then the business, also obviously, took some time to establish, so he was probably not really earning a proper income for 7 or 8 months. During this time our mortgage reached the end of it's fixed rate and jumped up by £200 month, which was followed by all the other interest rate rises etc. etc. etc.

As a result, have accrued loan and credit card debts of in the region of £60K-£70K (we probably had £15K when he was made redundant). The property has still not sold and we have now dropped the price to £162,500. The mortgage on it is £105,000, though, so there is almost enough equity in there to cover the debt - the balance will certainly be manageable.

Every month every penny is required to pay everything off, to the point where, the last 3 months, we have had to use credit cards to buy petrol, food etc. This month his worked has suddenly dried up and there are no "big jobs" in the pipeline to bring anything decent in and there is no way we can afford to make the credit card payments. (I am aware of the "priority payments" we MUST make to stay reasonably safe.)

SO, I have tonight made an appointment with the CCCS, which is in two weeks' time. They have advised me to open a basic bank account now and advise all the loan/card creditors that we are handing over to the CCCS and that we will make a nominal payment immediately prior to handing all over on 30th April.

Is that what everyone out there would advise, or is there another way? I personally have had an immaculate credit record all of my 50 years. He hasn't, but has been "clean" for the last 6 years (we've been together 7).

BT55

ltm07

Hi,please stick around as there will be plenty of good people on to give you advice. Good luck.

Seaxwyn

HI BT55, welcome to MSE.

I'm sorry to read of your troubles - and can sympathise, my debts were incurred in a similar way to yours - partner not earning, using credit cards to buy food etc etc. The good news is you don't have to 'go under', things can and will get better.

CCCS are very well thought of by people here - you are in good hands there.

If you can post an SOA (full summary of your incomings and outgoings) people may well be able to see ways you can improve your situation. See the 'first time posters' thread at the top of the Debt-Free-Wannabe forum.

Stick around, you will certainly get good advice and lots of moral support on here.

alone_and_fed_up

In a nut shell - Yes.

CCCS are very reputable and give excellent advice. You cannot pay these debts, so take the first step now, before you sink further into debt and 'trouble' with your creditors. Being proactive is always the best things especially with the credit card people.

hope all goes well

GeorgeUK

Can't really tell without seeing the figures, but if CCCS think a DMP may be the only way, then you have probably run out of room to manouver.

You could post up a SOA so we can see the income and expenditure
http://www.makesenseofcards.com/soacalc.html

Without a regular income it would be difficult to budget any possible solution. Trying to get 0% BT deals will probably not be enough - even if you don't pay PPI on the loans and can get back any CC charges.

With you splitting, it is important to keep an eye on the debts that are in your name only as well as the joint debts. Is the house in both your names?

I think the CCCS option is probably the only one you have open to you right now while you try to work out some repayment deal with your creditors.

Leaf

Hi.
We have recently found ourselves in the situation of struggling to meet our minimum payments with credit cards and battling to meet priority debts like gas, electricity, council tax etc.
I rang CCCS for advice and was advised to enter into a Debt Management Plan. The prospect of this was frightening as I was still hanging on to the pretence we could retrieve our credit rating. Truth of the matter was, our credit rating was pretty much shot anyway and the daily phone calls from credit card companies was really getting us down. No matter how much I tried to explain to them our circumstances, they were still trying to squeeze every penny, one even encouraging us to take out a further 'consolidation loan'.
CCCS were so understanding and practical. There was no judgements made, merely realistic and honest solutions offered. We are now on a DMP and the relief is immense. Every creditor has willingly entered into a repayment plan, frozen the horrendous charges that were levied every month and some have dramatically reduced the interest rate. The calls have stopped, we know exactly where every penny is going and, although a tight budget, we know we can meet all the payments.
It is a long term commitment. It will take nearly four years to clear the debts and a further six years before our credit rating is repaired. We are not able to borrow and I am pleased about that!
I now feel our health will improve because we are no longer under such stress, we have our home and can pay the bills we, in some instances, foolishly built up.
If you are at the stage where coping with debt is a real issue, I urge you to contact CCCS if only for a chat! They inspiried us to take positive action.

Good luck to all. It is a very testing time for many.

Leaf