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Need some urgent advice...paying back creditors(5 Posts)
I'm really hoping that someone can help as in trying to do the right thing I fear I've got myself in trouble
I've been paying back a mortgage company for a shortfall on property, I'm now solely responsible for the debt after exh declared himslef BR.
I was told at the beginning that the amount was final any anything I contributed towards it would reduce balance. Every 6 months they do an income and expenditure assessment. I have other creditors, bank loan, credit card and store account. They have always been aware of this and I've explained before once the smaller manageable ones are paid off I would increase my payment to them. I've made a payment to them every month which they have always told me is a good arrangement.
However, this month they have told me they won't renew my current arrangement and the consequence of this is without an arrangement in place they will pass my debt to a debt collection agency. I asked what why this has changed as circumstances are exactly the same.
What they want me to do is go to the CAB and set up reduced payments to everyone with the biggest proportion going to them (I can see that this makes sense but at the moment everyone is being paid albeit unfair to the mortgage company).
I feel naive and completely stupid that this never occurred to me before, I realise they are not a charity but I stupidly plodded along knowing I was reducing the balance.
Because I'm desperately trying to get out of private rent I'm doing all I can to reduce everything to repair my credit file. Setting up the plan that they want would ruin everything.
I had to come clean to family as previously they weren't aware of the situation. It was a very messy break up and I left with absoloutely nothing other than a lot of debt that wasn't mine.
Because they want to help me they offered to pay off my other debts which I'm extremely grateful for to allow me to sort the massive one out.
However, whilst looking for info online I found something about payments being reversed to other creditors because they were made unfairly, this was about bankruptcy but does it apply here too? I'm not currently on any form of DMP or BR, I was just trying to do the right thing and pay everyone back rather than only give them a tiny bit of what I owe I'm now really scared that I'm going to get in further trouble and feel awful for the family that have helped me out.
Don't feel like there is an end on sight of all this at the moment and feel completely stupid that I didn't know any of this about creditors
any defaults that have been added to your file? any defaults will remain for 6yrs whether paid or not so that wont improve your credit file unless you pay in full! you wont get a mortgage with defaults on your credit file im afraid
i also meant to say that if you prefer creditors and you subsequently go or are made bankrupt the offical receiver has the power to overturn the transactions. You should seek advice from stepchange or CAB as soon as you can as they will help you set up a payment arrangement with all your creditors
There is always an end in sight.
Stepchange or CAB are good. Do not pay the vultures that take your first 3 payments then a percentage to "manage" your debts. They do nothing you/stepchange/CAB can't do.
You need an I/E done. A good I/E will include some money for the little things not just your rent and bills. You need money to live, especially when you're on a long term plan to being debt free.
What's left after the I/E should be divvied up between your creditors on a pro rata basis.
First - Priority debts
-Anything secured (car, hire purchase on white goods etc)
-Also anything that was a priority bill, council tax, utilities etc.
The 6 month review is there for you too. The idea behind them is to ensure they're not forcing you into financially difficulty as a result of the arrangement, you're let with enough for food and you've not fallen behind your priority bills as a result of the arrangement.
You'd be surprised how many creditors will accept £1 a month with an I/E that backs it up for unsecured things.
Unless you're in arrears with your bills or have priority debts your mortgage should be your priority with a view to paying more on the smaller ones when that is cleared.
You'll get there.
Have you looked into bankruptcy for yourself? Have you any idea how long it would take to clear the mortgage shortfall by paying the most you can each month.
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