Debt problems

[Oldham lad]

Good morning all

I am now going to try to put down as much information as I can think of to see if anyone here can give me a little inspiration in to what I with my limited knowledge see as a lost cause.

A little bit of background on myself I am married with two kids (14 and 8) and have been a self employed plumber for 12 years and have just yesterday had to sign on unemployed due to the fact that I cannot generate enough money to cover my out goings.

Ok here we go

I have six credit cards 3 have insurance against unemployment and 3 have none


They are

Yorkshire Bank Visa (insured)

Credits limit £11900 …..Current balance £10219.17

Minimum monthly payment £306.32
……………………………………………………….

MBNA Visa (insured)

Credit limit £4500….current balance £3927.51

Minimum monthly payment £104.18

……………………………………………………………

First direct Visa (insured)

Credit limit £4900…Current balance £4363.79

Minimum monthly payment £126.92

………………………………………………………………

RBS MasterCard (no insurance)

Credit limit £5700…Current balance £5119.55

Minimum monthly payment £115.00
……………………………………………………

Halifax MasterCard (no insurance)

Credit limit £5500…Current balance £5340.62

Minimum monthly payment £115.64

…………………………………………….

Capital one Visa (no insurance)

Credit limit £3000…..current balance £2556.89

Minimum monthly payment £ 89.78

I also have a Argos store card (insured)

Credit limit £1020…current balance £456.41

Minimum Monthly payment £24.98


None of these cards are in arrears and never have been


Loans

I have two loans one is for my Van for work

Loan £9332.87 (commenced 143/04/06) (uninsured)

Duration 60 Months

Lender GMAC

Monthly payment £ 215.21


And one is a personal bank loan

Loan £12600 (commenced 24/7/07) (uninsured)

Duration 84 months

Lender First direct Bank

Monthly payment £202 .67


Mortgage

Balance £48,705.13

Lender the Woolwich

Monthly payment £378.92

Commenced September 2002

Not insured

Loan attached to property

Balance £89,219.67

Lender Nemo personal finance

Monthly payment £892.45

Commenced March 2006

Insured


That is the complete amounts of debt I have accumulated most of it as a result of borrowing to pay off existing debt.

Total amount owed to Credit cards

£31,427.53

Total amount to loans

£21,932.87

Total amount on property

£137,927.80

Overall debt

£198,288.20



My monthly outgoings just to meet the payments on these loans (and I admit I have used credit cards to meet most of this) are £2,572.05


My income varies depending on the hours I work recently I was working sub contract for a firm and was earning £600 before tax £480 after tax and still could not manage the out goings and now I have been laid off I am unable to secure work through advertising I have had to sign on unemployed.

The monthly income to our household will now be

£225 (wife’s monthly wages)

£216.81 Child tax credit

£37.88 working tax credit (that will most likely be cancelled now I am unemployed)

£110 child benefit

And whatever I get from DSS


So I have been advised to declare myself bankrupt and have looked in to this only to find out that to become bankrupt I must pay £150 court costs (that may be wavered if on benefits) and £335 for the cost of the hearing.

It has also been brought to my attention that it is best if my wife also goes Bankrupt or my creditors will attempt to hassle her due to some of the cards and also one loan is in both names to do this will cost another £150 + £355.

Considering my wife has a personal loan in her own name it would be beneficial to us if she did follow this advice but the problem is we simply do not have the money to do it with.

My home when I had it valued two months ago is apparently worth £150.000 but being in the building trade and monitoring the price of similar property in the area I would say a more realistic value would be £140,000 so I think it unlikely the official receiver would force a sale


Now I think I have laid out my circumstances as much as see them and hope that you good folk here will be able to answer a few of my questions/doubts/uncertainty


Obviously the first thing is I am pretty sure Bankruptcy is my only answer to my unsecured loans so my first question is

Will I have to pay the cost of the trial (I know court costs are wavered) I mean the £335 x 2 = £670 and if so is there any help I can get with the payment



I know Bankruptcy normally only lasts for 12 months but considering the large amount I owe is it likely that they may impose a 15 year period on me ( I have read they may do this in certain cases they feel have been aware of the impending problem and like me have borrowed to starve it off).


In the event of my home coming under a repossession order how much notice will I get and what kind of assistance can I expect from the council in getting rehoused?


If after the bankruptcy I get a job would the official receiver put an attachment of earnings on my wage?

I understand that once bankrupt my van will be repossessed but we have a car that my wife uses to take the kids to school and that I would most likely use should I get work it is only worth about £800 would the receiver take that as well.

Will my children’s bank accounts and belongings be touched?

Lastly obviously has any one got a better idea than going bankrupt?

Thank you in advance for your help and advice

[Paule]

Re: Debt problems

Hi Oldham Lad

Well thats a great post to start, you have laid out everything nice and clear, which makes it a lot easier for people to help you.

Are you in arrears yet with any of these, or are you just about to start failing to make payments?

Have you contacted the Insurance companies for the insured CCs yet? what did they say?

I presume that as you say you always make your payments on time, you have no charges on your cards?

We have an income expenditure sheet here Legal Beagles

Which will help break down everything and see what your priorities debts are.

If you are only just about to start failing in payments, you may be able to get repayments schedules in place for the time being.

I, as well as others on the site, will have a further look into the details you have posted and will advise you some more soon.

I am not up on Bankruptcy details, so others will be able to advise you a bit better on that aspect of your query

PKea

[Amethyst]

Just couple questions to add to PKeas post.


Can you clarify what you mean when you say insured ?

The repayments on this loan secured to property seem high, is there any reason why you didn't extend your mortgage as opposed to taking a seperate loan ? Just wondering.

What is the value of your home currently ? £140,000 est.


Regarding your income, and WFTC - i trust you have had a full appointment with the JobCentre to discuss everything ? They are very good at telling you exactly what you will be entitled to, and in your circumstances there should be a lot more than simple jobseekers.

Tell me what you have applied for and what you have been told thus far by the dss.


Also - who have you been advised to go bankrupt by ? not saying thats not the answer but theres a lot to explore before heading down that route.

[Oldham lad]

Re: Debt problems

All my debts are so far not in arrears but that will unfortunately change quite quickly
And have not yet informed any of my creditors of my unemployment.

I have only signed on via the telephone so far and have to go to the local job centre for an interview tomorrow when I will hopefully find out more about what I am entitled to

The insurance that I have one the three credit cards is (I hope) the standard cover that will pay minimum payments for up to 12 months of my becoming unemployed.

The insurance I have on the home owner loan is supposed to pay the full amount of the monthly instalment for up to 12 months but I have been told by a financial advisor that it may not cover me because I am self employed and that I should not have been sold the insurance in the first place.

I was advised to go bankrupt by a lady I spoke to at the CAB a few months ago when things were not as bad as now but even then she thought it would be the best thing to do

Basically I took out the loan because it was easier to obtain and the company did not ask as many questions, I now realise why this was as I have been told that Nemo are notorious for upping the payments once they have you. The initial loan was for £70,000 and the repayments were £701 per month I only found out later that the insurance cost £20,000 and that it was paid as a lump sum and not charged weekly as I had been lead to believe, this has in reality increased the loan to £90,000 as I found out when I read the small print.

[Amethyst]

Re: Debt problems

brilliant.

[Amethyst]

Re: Debt problems

Basically I took out the loan because it was easier to obtain and the company did not ask as many questions, I now realise why this was as I have been told that Nemo are notorious for upping the payments once they have you. The initial loan was for £70,000 and the repayments were £701 per month I only found out later that the insurance cost £20,000 and that it was paid as a lump sum and not charged weekly as I had been lead to believe, this has in reality increased the loan to £90,000 as I found out when I read the small print.

Regarding this - do you have the original paperwork - credit agreements/ T&C's etc ? If so do you have a scanner ?

Loan Agreement Secured by a Legal Charge or Standard Security (Non Regulated) ?

6.2 You shall indemnify us against all reasonable legal and other costs and expenses incurred by Us in attempting to obtain repayment of the unpaid monthly payment or of such balance and interest.

7. Payment Protection Plan
7.1 If You have selected the Nemo Personal Finance Limited Payment Protection Plan, You authorise us to pay to the insurers the cash price of the insurance and to add this sum to the loan.
7.2 You will receive the benefits of the selected Payment Protection Plan the details and limitations of which you acknowledge having received before signing this Agreement.

If not we can get them so don't worry will just take a couple weeks.

If we can get this bit going asap there might be some action we can take.

The insurance I have on the home owner loan is supposed to pay the full amount of the monthly instalment for up to 12 months but I have been told by a financial advisor that it may not cover me because I am self employed and that I should not have been sold the insurance in the first place.

Indeed - we need to see a couple of your policy documents for these insurances and we can get that sorted / claimed back etc. although I would rather they were valid and you could claim on them. Sooooooo more details about your employment status at the time you took out policys, saying you were laid off kind of implies employment so really do need that clarified.

I have only signed on via the telephone so far and have to go to the local job centre for an interview tomorrow when I will hopefully find out more about what I am entitled to

Write it all down and come back tell us.....if you are unsure of anything ask her. They are really good. Ask about council tax and housing benefit too. You may be entitled to some as your wifes income is low. Worth an ask anyway.

[Xena]

Re: Debt problems

The insurance that I have one the three credit cards is (I hope) the standard cover that will pay minimum payments for up to 12 months of my becoming unemployed.


Hi, need to clarify here - were you self employed? Because the rules regarding PPI alter the situation enormously.

[Paule]

Re: Debt problems

Another Thing to mention

DONT BE AFRAID TO ASK

Whatever ever it is, no matter how small it may seem.

We have all been in debt situations, some worse than others, and there are plenty of threads on here regarding them.

Ame has pointed you in the right direction to get the ball rolling.

Another Quick question regarding this

The insurance I have on the home owner loan is supposed to pay the full amount of the monthly instalment for up to 12 months but I have been told by a financial advisor that it may not cover me because I am self employed and that I should not have been sold the insurance in the first place.

In what capacity did you see the financial advisor, were they involved in the setting up of this plan, or was this a visit afterwards?
Just wondering what advice you sought from them?

PKea

[Amethyst]

Re: Debt problems

Just putting some links on here - don't worry you don't need to read them its just easiest to put them on your thread where they are relevant.

Payment protection insurance (PPI) – Refunds of single premiums : FSA Money made clear – Unfair contracts
regarding refund of missold single premium PPI


News article re NEMO loans and PPI
PPI changes too late for millions | This is Money


Nemo's PPI policy
http://www.nemo-loans.co.uk/pdfs/policy_document.pdf
page 6,9, 15

[WendyB]

Re: Debt problems

Might also be able to get working tax credit in wife's name, as income is low. I believe you can swap this over/apply again, if you expalin the situation to WFTc dept.

[Amethyst]

Re: Debt problems

This probably all sounds a bit confusing at the moment - just information gathering now, then we'll sit down and work out your options and get a plan together.

[Oldham lad]

Re: Debt problems

Hi guys

To answer your Questions

Amethyst

I do have the original paperwork here.
I have just been reading through the unemployment protection cover and I am pretty sure that I do qualify as I have been a self employed sole trader for 12 years and have accounts to prove it so I think that claiming should not be a problem.

Xena

I have not yet informed the c/c companies about my unemployment as I intend to do this once I have spoken to the people at the job centre.
I should think that the insurance I have with them will be adequate because like I said I have been self employed for 12 years and have only used credit cards for the last nine or ten years so I would have stated on my application my type of employment.

Pkea

The financial advisor I spoke to was someone who we had contacted via a friend to see if he could help reduce our outgoings and it was while he was looking through our paperwork from Nemo that he mentioned this.

I at first thought he was just giving us a sales pitch and belittling the other company so he could push his own product but when after a couple of days he rang us to say there was nothing he could do to help reduce our debt I felt that he might have genuinely seen a problem and it is something I have always had in the back of my mind.

Thanks to all of you for taking the time to try and help me out it really is genuinely appreciated.

[Amethyst]

Re: Debt problems

Cool - any chance you can scan up a copy of the agreement ? for the Nemo loan

I know its unregulated but will still help.

[Oldham lad]

Re: Debt problems

Might also be able to get working tax credit in wife's name, as income is low. I believe you can swap this over/apply again, if you expalin the situation to WFTc dept.

I wondered about that Wendy but due to her only working part time (10 hours per week) I don’t think she qualifies as I am pretty sure that to claim WFTC you have to be doing a minimum of 30 hours.

[Amethyst]

Re: Debt problems

if she only works 10 hours she should be able to get income support too, pop it on your list to ask tomorrow.