What happens when I cant pay?

Iwanttobefree · 10 February 2018 at 5:26PM

Hi am on a DMP and owe about 22K to 10 different creditors (unsecured debts) and have been on it for a few years.

I used to have £186 a month to share between them, but I have failed my medical to get ESA support and have just also failed my tribunal appeal.

However both my physio and my GP say I must not work and my GP is signing me off indefinitely.

The outcome of this means that as my wife works more than about 25 hours at minimum wage, I will get zero benefits, meaning we are £109 a week worse off.

Until our mortgage finishes in about 7 years, we simply can no longer afford to pay them any more than £1.

In 7 years they can have £300 between them.

So what happens now?

Sorry if I sound a bit blunt, am on the verge of simply giving up, I cant take much more of this stress.

tallyhoh · 11 February 2018 at 10:06AM

Is there any chance you could claim working tax credit or pension credit (sorry not sure of your age)

Iwanttobefree · 11 February 2018 at 10:33AM

tallyhoh wrote: »

Is there any chance you could claim working tax credit or pension credit (sorry not sure of your age)

No unfortunately.

sourcrates · 11 February 2018 at 11:09AM

Hi,

You write and tell your creditors your situation has changed, back it up with evidence, and a copy of your budget, a letter from your doctor is also a good thing to include.

They can’t take what you don’t have, so spending more money taking you to court, for no gain, is not feasible.

Can I ask, is your house in joint names, or just yours ?

fatbelly · 11 February 2018 at 3:13PM

Iwanttobefree wrote: »

Hi am on a DMP and owe about 22K to 10 different creditors (unsecured debts) and have been on it for a few years.

I used to have £186 a month to share between them, but I have failed my medical to get ESA support and have just also failed my tribunal appeal.

However both my physio and my GP say I must not work and my GP is signing me off indefinitely.

The outcome of this means that as my wife works more than about 25 hours at minimum wage, I will get zero benefits, meaning we are £109 a week worse off.

Until our mortgage finishes in about 7 years, we simply can no longer afford to pay them any more than £1.

In 7 years they can have £300 between them.

So what happens now?

Sorry if I sound a bit blunt, am on the verge of simply giving up, I cant take much more of this stress.

You have to understand the difference between priority and non-priority debt. Your mortgage (if in arrears) would be priority. If you are behind with council tax, or electricity or gas, they would all be priority - because these organisations can actually do something, like evict you or jail you or cut off your supply.

The sort of debt that goes into a dmp is non-priority. Typically loans, credit cards, catalogues, old overdrafts. They can't do very much.

If you can't pay them then it's no big deal. You could ask them to write the debt off (but they probably won't). You could pay them £1 a month for the next 1000 years (but there is no advantage to you in doing that) or you could leave the problem to them.

Now they could take a court claim. It would be hard to enforce this. The best they could do would be a charging order but if the debt is in your name and the house is joint then it just gets recorded as a restriction at the Land Registry and we have a thread all about that (Charging Orders? The Myth). In most cases the debt just gets sold on and on for ever smaller amounts. After 6 years it becomes unenforceable.

In your case your finances are about to take a hit of over £400 per month. Non-priority creditors are probably the least of your concerns. You need to be putting a budget together to allow you to live as best you can on what is coming in. I would suggest you revisit a benefits checker like Turn2Us - you're on very low income and anything you can get, like council tax support, would help. You have nothing to lose by starting a PIP claim.

I would also suggest you get the best deals you can on electricity and gas but also stick to those who do Warm Home Discount as you are likely to be in the 'broader group' next winter and should pick up £140. Ovo and Eon are already in it and Bulb expected to join this year. Ovo and Eon have hardship schemes

Iwanttobefree · 11 February 2018 at 10:28PM

Many thanks

The house is in joint names.

The debts are mainly in my wifes name with about 7k besom in my name (but we've been doing one DMP)

I've been asking advice on employment in the employment section, one of the responses was

http://forums.moneysavingexpert.com/showpost.php?p=73865707&postcount=27

In that case, you and your wife both need to work. You're not eligible for benefits and have debts. Failure to pay them could result in a Charging Order or even an Order for Sale.

But that thread has got very judgmental by a couple of posters and I haven't got the energy or willpower to stay in it anymore.

In fact as the days go by, I have less and less willpower to do anything and more and more often while I have no suicidal thoughts as such, I really wish I would go to bed tonight and simply not wake up. The thought of this for years to come, and the judgmental comets by those that don't understand, well I think I'll be giving this site a miss for the next few months.

sourcrates · 11 February 2018 at 10:39PM

Don;t take heed of the trolls.

You have come to the right place.

Orders for sale are so rare nowadays that the number of them granted is no longer recorded.

A charging order will not be granted either, it would only be a restriction, as the house is in joint names.

Fatbelly gives you the route to take above.

Creditors will not take legal action if they know your budget cannot sustain payments of any kind, they don;t want to waste any more money for no return.

fatbelly · 11 February 2018 at 10:56PM

Carry on posting here. My previous post was based on you not being well enough to work as that was what you stated quite clearly.

If your health improves to the point where you can work, that's great - the right job can act as therapy as well as generating an income. I'm lucky enough to have found a niche like that. But I work every day with clients who struggle to find something suitable, and your health is the starting point for everything in life.

tallyhoh · 12 February 2018 at 9:19AM

Have you applied for PIP?

[Deleted User] · 12 February 2018 at 9:49AM

Hi Iwanttobefree,

Please keep posting, you'll get plenty of support here.

Sending lots of hugs your way xx

Iwanttobefree · 12 February 2018 at 11:09AM

Thanks all

My one main concern is Creation Finance. if your short on time, skip next bit.

Short version, they have been a pain, I complained to the financial ombudsman, the financial ombudsman in the way they handled my complaint, in my opinion is not fit for purpose.

They found in favour of Creation in every aspect.

Stupid things like me keeping copies of all the letters I sent them over 3 years, each time asking to only deal in writing, them denying receiving them, even though they were all sent recorded.

Ombudsman saying that as I cant prove I actually sent them, they are choosing to believe Creation that they never received them.

I even had a screen shot of me logged into my creation account where I typed a message to them in 2014 stating I only want to deal in writing, but the ombudsman said that all that proves is I was logged into the account and had typed that info in, it doesn't prove I clicked send.

In the end (after their findings) I completely lost it with them, asked them if they really thought I had typed various letters over the course of 3 years just to keep on my PC for fun.

Likewise while I said I borrowed the money hence should pay it back, I also questioned Creation for lending us more credit when we were always up to their limit.

I gave the ombudsman the following example.

If I went round your house for dinner and said:

Me: I'm a little stressed, lent a friend some money and they haven't paid it back"

Me they asked me if I could lend then £5000 5 years ago and I said yes, and said they could pay me back when they wanted, provided they pay a minimum of £50 a month.

Me: They only ever paid the £50 back. I felt a little sorry for them, so sent them another £1000, but they still only paid the minimum each month.

Me: after a couple of years I felt sorry for them again and sent them another £1000

Me: Then a couple of years latter my friend and his wife both asked me if I could lend them each some more money, so I lent them another £5000 each.

Me: Now they say they can't afford to pay me the minimum amount anymore, I feel really angry towards them.

I suspect your reply would be

You: Why on earth were you stupid enough to give them more money when they were obviously struggling to repay back the initial loan, to be honest, it's your own stupid fault.

That is how the banks etc act every single day of the week, that is effectively how Creation (or Sygma) acted towards us, that is why thousands of people are in debt up to their eyeballs with no hope of paying it back for many of them, that is why some are driven to suicide. It may be legal, but it's wrong.

Anyway, here's an actual quote of part of their findings.

The business has provided a copy of their application opening process. Having reviewed it, the application process is mainly an automated assessment where the decision is to either
accept or decline applications for credit. Applications which do not fit into either category are referred to an underwriter to undergo a manual assessment. Your application received automatic acceptance and therefore was not referred to an underwriter

In other words, as it's automated, they aren't responsible for accepting my application ?

They also stated

Sygma stated that credit limit increases from account opening until July 2015 went through the same type of review. They advised the limit increases and decreases are as follows:

!!!61623; 08/10/2012 increase from £4,000 to £5000
!!!61623; 08/04/2013 increase from £5,000 to £6,000
!!!61623; 08/06/2013 increase from £6,000 to £6,500
!!!61623; 09/12/2013 increase from £6,500 to £7,500
!!!61623; 06/02/2014 decrease from £7,500 to £6,500

When increasing credit limits, Sygma advised they notify consumers via letter. They have been unable to provide the actual letters they sent you, however they have provided a template. Having reviewed the template, I am satisfied they gave you the option to opt out.

Sygma stated you accepted the increases and did not contact them decline them or to be excluded from future increases. Even if these letters were not sent, I do not think it is unreasonable for you for to have called or contacted the business to decrease the limit.
The contact notes do not show you contacted them to decrease the limit.

And so on.

Completely ignoring the fact that I wasn't in my right frame of mind when applying for credit in the first place, this was at a particularly low part of my illness when I wasn't thinking straight at all, and ignoring the fact I was always maxed out and only made minimum repayments.

This is the very very very short version of our communications.

They even didn't uphold Creation calling my wife over 48 times in 2 weeks as harassment.

Anyway, that aside

We have 3 accounts with creation.

Wife account 1 owes £6004
Wife account 2 owes £4456
My account £4456

While the house is in both of our names, as we both owe debts to the same company, could that increase the chance of them forcing us to sell?

What happens when I cant pay?

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