Help required with best option for large amounts unsecured debt

[gerrardrocks]

Hi,

been reading up on the forums for a while, like a lot of others I’m in a mess. I’ve got a lot of unsecured credit that as interest rates have risen, has become unmanageable, 

It’s pretty embarrassing facing up to it, and I probably should have done this a lot earlier instead of robbing Peter to pay Paul.

All debt is currently up to date but I’m paying out more than I get in. If I don’t face this now, I’ll end up missing priority debts out within a month or 2 max, or leave my disabled wife or kids short.

Mortgage debt- £180000 over 2 mortgages, payments £1600 per month- TSB & 2nd charge from oplo (taken out to extend the house and build a shower room to help my wife)

tsb open since 2007 and oplo 2019

Obviously they (with my ct and utilities) are must pay.

unsecured debts current balances 

Aqua card, £6000 £300 pm opened 2016

MBNA cc £14000 opened 2019 £250 pcm

Tesco card 1 £3000 opened 2019 £90 pcm

tesco card 2 £1000 opened 2016 £40 pcm

vanquis card £2600 opened 2013 £146 pcm

very £4500 bnpl due November opened 2018

virgin money card £9300 opened 2019 £245 pcm

zopa credit card £3000 opened apr 2022 £90 pcm

zopa loan 1 £9700 only opened jan 2023 £300 pcm

zopa loan 2 £8200 opened march 2022 £220 pcm

nb - I’ve had a number of zopa loans paying off then refinancing- so I’ve been in debt to them for about 3 years

sky mobile devices - £2700 - £146 pcm opened 2019

elfin market - £1900 - £90 pcm opened 2020

Livelend loan £7500 - £246 pcm opened 2019

mycommunity bank - £9200 - opened 2021- £300 pcm

novuna - £521 - £23 pcm opened 2019

secure trust - £850 £21 pcm opened 2022

TSB unsecured loan - £20000 - £491 pcm - opened 2022

TSB credit card - £3500 - £100 pcm - opened 2007

duologi finance - £2000 - £70 pcm - opened 2021

ive also got studio account with no balance, 1 capital one card with £500 with no balance

I’ve a car that could possibly fetch £12-14k (camper van I did up) but if I just sold that, and carried on, that would literally only buy me a couple of extra months.

i figure I’ve got to do some kind of arrangement with TSB. They are my current account provider, and following the advice here I’ll setup a parachute account with starling. However they also have my main mortgage, happy to take advice from here.

I have to pay very, I’ve family who work in the back office. I couldn’t face them chasing me for payment.

I earn approx £4500 after tax pcm, have 2 kids and a wife whom cannot work due to illness, and built a lot of the above up when building costs overran, and later burying my head in the sand.

All solely in my name

i would be happy to setup pro rata payments that are sustainable, but if I have to play hardball to get there- so be it.

thanks in advance for the understanding.

 

 

[dx100uk]

two points -

stuff very - throw the morality card out the window.

keep your van.

get all your income going into your parachute A/C .

stop paying ALL non priority debts now

the quicker they default you the better.

THEN look at entering each one into your pro rata scheme as each registered default appears on your credit file.

never never ever respond to talk/text/phone.

ignore the deforestation coming your way.

i will guess as you have not said, your credit file is clear - no registered defaulted dates yet?

dx

 

[gerrardrocks]

Thanks for the reply,

Point noted re:very, and my van, appreciate it. 

credit file still clean currently.

I’ll get the parachute account and income sorted for there.

then stop all payments to non priority debts.

ignore all until defaults registered

then offer, in writing only, pro rata payments based on proportion of the individual debt vs available spare funds?

I’ll keep reading all the self help materials here in the meantime so I’m ready.

 Thanks again 

 

 

 

[dx100uk]

magic wish everyone else bothered to do their reading up like you obviously have here.

 

regards

 

dx

 

[fkofilee]

Please do keep reading up and make sure you keep all letters for your benefit. Store them somewhere safe. 

I would suggest Monzo or Starling for opening a parachute account - Some retail banks are owned by other ones and right to offset may occur. 

The 2 I mentioned are not owned by any big bank and could be good to manage our money going forward during this time (Spend Analysis on both is great!) 

[gerrardrocks]

Going to buy a filing box to store them.

Starling looks good, that’s who I’m going for. 
I really like the idea of the money management aspect of it too, going to need it

Thanks

Edited June 11, 2023 by gerrardrocks

[comebackjimmy]

As a long standing member here I have loads of experience in not paying these kinds of debts and find the advice here sound.

I would totally agree with DX in post 2, keep your van.  (I got a VW bay window 1974, she is not going anywhere!).

In your situation I would stop paying the unsecured debts, including VERY, stuff the morality and shame.

I would also establish a savings account and put as much as you can afford that you would otherwise have paid towards your debts into that account.   All of those debts will eventually be sold to debt buyers and maybe one to two years down the road one of those buyers might successfully beat you in Court (though if you follow the advice here then a good chance that wont happen) and if they do then you have a reserve available to pay that debt off before they get it secured on your property.

If after six years you have got those debts to the Statutory Barred stage you will have a nice little pile of money to do something with.

Given the shear number of debts you have got you might consider buying a car boot mobile phone and a pre pay SIM and advising your creditors of phone number change before you stop paying.   Once the onslaught of calls starts your car boot phone can take all the calls whilst it sits on your kitchen window, leaving you in peace!

[London1971]

For the love of all things holy, stop paying them all. All that matters are your essentials, Mortgage, Food, C tax etc etc.  

[gerrardrocks]

Really appreciate the non judgemental responses, thanks means a lot.

that’s a really good idea about the savings fund, I’ll see if I can do that.

As for the phone- will that work? Or do you think they’ll just go back to my existing number? 

 

[comebackjimmy]

With regard to the phone it cant hurt to try.

My guess is that the creditors will start to use your new number and keep a record on their system of the old number.

However, I speculate that when they sell the debt on they may not pass on the historical number, just the new one, but it IS just speculation, cant hurt to try, other wise you will get six to ten automated calls a day, not necessarily a problem if you have the right mental attitude but they will be using automation to call you so why not use your own automation to answer them!

by the way on the one occasion I tried this it worked.

[gerrardrocks]

Quick update- 

I’ve completed an I&E with step change, all online,  so that I’ve a realistic budget and they advised that if I entered a dmp around £450 pcm- so I’ll aim to put that aside as a contingency each month. Obviously not intending to do this but at least I’ve got a reference number and have a budget worked out in a similar manner to the library on here.

I’ve got my Starling bank parachute account setup, next step is to set my wages up for being paid into there, and I’ll create a sub savings account for the savings fund.

I’ve cancelled all my non priority direct debits. 

[dx100uk]

8 minutes ago, gerrardrocks said:

Obviously not intending to do this

10/10

 

dx

 

[comebackjimmy]

Suggest you put your savings with someone other than Starling, try ford money or Marcus from goldman sachs or similar on line accounts.

There is always the possibility down the line that Starling will freeze your account for some reason, they may not like your new credit record or something else.

You will at least have access to your savings for the period of the freeze.

Might not hurt to get another current account as well, a few on line out there.  I am paranoid now and don't trust any bank.

[gerrardrocks]

Thanks for the advice on the savings accounts, I’ll go with the ford one looks easy to setup. For the 2nd extra bank account, would monzo or chase be suitable? 

[gerrardrocks]

Just read your post again, surely they couldn’t totally freeze it if the account itself is in good standing- not saying that they couldn’t inform me of a closure, but not withhold funds from wages etc- how would I be expected to feed my kids? 

[comebackjimmy]

Happened to me twice.

If they think you are dodgy for any reason they will report you to the national crime agency and suspend your account and refuse to speak with you until the NCA advise that they are not interested.

Either of those accounts, or both would be good.