Preparing for the worst...

[Arkwright]

Ok folks, here's my situation and any advice would be more than welcome.

It is very, very likely that by the end of January I will be unemployed. When that day comes I will find myself in the following position.

Mortgage = £800 per month
Credit card = £7000 outstanding
Personal loan = £5000 outstanding
Business overdraft with personal guarantee = £10000 outstanding

I have never defaulted on any of these debts and have put my house up for sale. If I'm lucky enough to sell my house I may have around £12500 equity after paying solicitors etc.

So my question is this. Do I start the process of getting in touch with all my creditors now before I start missing payments, or do I wait until the worse happens.

If I get in touch now, how do I approach them all?

Many thanks for reading.

Steve

[postggj]

Re: Preparing for the worst...

for a start, yes, tell your creditors your situation and request a payment holiday

thats normally a month, tell them you have put your house on the market

ask also to freeze interest

remember

your priority debts come first

roof over head
council tax
food

etc etc

[labman]

Re: Preparing for the worst...

freeze interest AND CHARGES!

Sound advice as always from postggj!

I would then suggest you contact someone like CCCS or the National Bedtline to see what they advise about your situation.

A sincere well done for taking action so early on before it actually happens. It will make life a lot easier for you in the long run. If you have other debts on credit cards etc.... I'd be very tempted to cut the cards up so you cannot be tempted to get into more debt andobviously (I'm sure you've probably already done this) start trying to save all you can and minimise spending.

Basically anything you can do now to minimise the inevitable shock will be to your benefit.

You will get as much help as we can give from this site as well, so ask away about anything at all.

[SpringerSpaniel]

Re: Preparing for the worst...

I would wait until you know for definite, so as not to worry them unecessarily, then write as suggested above reequesting freeze interest and charges and give payment holiday on unsecured borrowing. There are downloadable templates you can use on this site.

[Arkwright]

Re: Preparing for the worst...

Hi Guys

Thanks for your initial replies. I really don;t know what to do for the best to be honest, the probable scenario come the end of January is completely alien to me. I'm 48 years old, worked since I was 15, never been out of work, never been in debt other than my mortgage, never missed a payment on my mortgage or anything else for that matter. The potential debts I'm facing have all been accrued in the last 18 months as I've desperately tried to save my business, firstly by taking a personal loan to pump a bit of capital into it, then asking for and getting an overdraft when the loan didn't help and finally using a credit card to help pay for stock in an attempt to continue trading. However, all these measures appear to have been in vain and after 9 years managing to keep the business afloat and provide a very modest standard of living, I'm having to accept defeat. It saddens me greatly as at my time of life I could do without the stress. Sorry for pouring out my problems, but just thought it would put my situation in context.

[labman]

Re: Preparing for the worst...

I'm sorry to hear of your sad predicament. It must be soul destroying after nine years of your life invested in it.

Are your skills in an area where you are likely to be able to gain employment elsewhere? Do you have other skills / qualifications that could help get you employment?

If the issue of having a vastly reduced income is temporary then obviously it changes the way you could handle it to the way you would if you are expecting this to be a longer term issue.

[Arkwright]

Re: Preparing for the worst...

Are your skills in an area where you are likely to be able to gain employment elsewhere? Do you have other skills / qualifications that could help get you employment?

If the issue of having a vastly reduced income is temporary then obviously it changes the way you could handle it to the way you would if you are expecting this to be a longer term issue.

Unfortunately I have spent my entire working life employed in a variety of manual jobs. Have a lifetime of experience without any recognised skills/qualifications. I live in one of the highest unemployment areas in the country where all unskilled work is going to school leavers who get paid minimum wage.

So at this moment in time, I have no idea if my unemployment is going to be a long or short term issue, therefore I'm also unsure on how I need to handle my impending debt crisis.