1/ Make a budget sheet. Write down what you income is and what your outgoings are. Sort out what the your priorities are as far as your outgoings are concerned. Paying your mortgage to keep your home is going to be more important than having a fancy holiday or getting yourself an expensive treat. Remember, just because you are being hassled for money it doesn't necessarily mean these are the first bills you should pay. You probably find that the less of a priority it is for you to pay something, the more communications you are going to get PRECISELY because those companies making the loudest noise know that your debt to them is unsecured. A mortgage lender will probably not contact you as much because they know they are safe no matter who you pay first. They've got your house 'by the walls' so to speak. So basically, look after your mortgage first....and make sure you contact your mortgage lender if you are in arrears or it's getting to squeaky-bum time.
* If you haven't paid your mortgage for two months and if you haven't contacted your mortgage lender then that lender is entitled to apply to the county court for a repossession claim. But even if you haven't done this, it ain't over....not by a long chalk honey as you can't be evicted without a court order.
So..... Don't worry so much about those things you can weather more easily, such as bank loans or overdrafts as in the short term at least, defaulting will only affect your credit rating, not take the roof from over your head.
So knuckle down (we all hate doing it) and DO YOUR BUDGET SHEET. If you can pay what you are supposed to pay contractually, plus maybe some towards the arrears, they are going to back off, as they required by the Financial Services Authority (FSA) to be fair and considerate. Them's the rules and are designed to stop them squishing your dreams like a bug..so don't panic.
IN THEORY, and that's a big 'in theory' (can you see what I did there with the caps lock on? Oh yeah) your lender is supposed to think about a repayment plan for you but don't hold your breath... These are people who got the trophy partner off the back of their bloated bonuses last year and may now be panicking as to how they are going to keep the other half in baubles and gym membership.....so you shouldn't waste time. Contacting THEM instead...GET PRO-ACTIVE.
You could as an example , ask for an interest-only mortgage for six months to tide you over, with the arrears added onto the mortgage. Lenders don't have to offer you another mortgage product, cheaper or otherwise but again, they are required by the FSA to be sympathetic. No....really.
If you phone up your lender and THEY say it's too late and is now being dealt with by lawyers, this is what is known in the trade as "A Party-Sized Bag 'O' Balls". It's nowhere near over.
If you get a court summons....make sure you turn up and get into the court itself. If you don't turn up, THEY win automatically. Be in court and be human and show that you are making some sort of effort.
And frog odds sake, don't agree to a new repayment plan that you won't be able to keep up just because it gets you off the hook in the short term. Mortgage company's agents (invariably solicitors) have a habit of strong arming desperate folks (even in the court waiting rooms) with deals that they say "you have to take". Sod them. It's up to the judge to decide what is reasonable and fair, not some no name random git with a valise and 90's aftershave. I mean really. How rude. The judge is going to be fair and they say that there ain't one in the country who actually WANTS to see a person homeless. So what else can you do?? Knuckle down...this is a bit dry:
• Can you work any overtime or extra shifts? Alternatively, negotiate a possible pay rise.? Stick with me here.
• If this is not possible can you take another part-time job? another ouch but .....want to keep your home?
• Could your partner earn more? (Now we're talking.... but approach cautiously and make sure you have two possible exits or a pointy stick)
• Do you have a spare room you could rent out? (Income received would be tax free)
• Are you getting all the benefits to which you am entitled? Fact sheets are available from www.direct.gov.uk
• Similarly, are you claiming all the tax credits to which you are entitled? The site www.taxcredits.inlandrevenue.gov.uk will show you clearly the credits you are entitled to. So top picking your proverbial and have a look.
• re you eligible for childcare vouchers? Visit www.childcarevouchers.co.uk for more information.
The next thing to do is to produce your budget. Helpful budget sheets and a calculator can be found at www.moneybasics.co.uk To do this you will need to:
• Find all your most recent bills
• Record everything you spend your money on (keeping a small notebook with you and writing all spending in it helps. hard but it's a one off)
• When food shopping take advantage of the "Spendometer" (http://www.creditaction.org.uk/spendometer.html) which you can download on to your mobile.
• Include all members of your family that spend money
Fill in your income after taking the above steps and then look at your spending. Once your budget has been completed take a keen look at it and ask yourself:
• What am I spending on non-essential items?
• Could I be paying less for expensive items like utilities? To help you go to a price comparison site like www.uswitch.com
• Can I make my money go further? Both this site and www.moneysavingexpert.co.uk have hundreds of money saving ideas.
Hopefully the steps outlined above will have improved your finances sufficiently that you will be able to meet your monthly mortgage payments and remove the threat of repossession. However if that is not the case you need to ask yourself "Dear sweet Jesus what else do I have to do?"
There may still be other options open to you:
• Are you able to downsize to a smaller home with the result that cash is released and that you can afford lower mortgage payments on the smaller property? Sounds dumb but may be possible still. Doesn't hurt to check it out.
• Could you switch to a different type of mortgage with your existing lender that would take the pressure off? Using an 'offset' mortgage product can be helpful if appropriate.
• Can you take out a cheaper mortgage with another lender? (This is probably an unlikely option especially if you are behind on your payments as companies have tightened their lending criteria considerably.)
• Can the lender suggest anything? If your problem is short-term such as being off work for a few weeks because of an operation, you may well find the mortgage company will be sympathetic and prepared to offer you a temporary payment "holiday" where they will agree to accept lower or even no payments.
• Have you made sure that you are paying your priority debts such as mortgage and council tax ahead of other less urgent demands such as credit and store cards? Non-payment of the former can result in more severe penalties to you than the latter.
• Even if repossession looks likely, seek time. Try and get the lender to agree that you try and sell the property yourself. It is in both your interests as the extra time may allow you to get a better price for the property and a lived in, furnished home is likely to be more attractive to potential buyers, rather than an auction house selling an empty, obviously repossessed property.
• If you and your partner jointly contribute to the mortgage payment, could your partner take over paying your share temporarily? Obviously if you are falling behind and your partner cannot make up the difference, then they too face losing their home even though they may have kept up to date with their share of payments.
The most important thing to do is to communicate with all involved. This involves talking to:
• Yourself! Many people who get in to a position of over-indebtedness go into denial, or are prone to seriously underestimating the amount they owe.
• Your partner and older children. Many people who end up in debt due to a change in personal circumstances, even when this is through no fault of their own, feel guilty and unable to tell their partners. In blissful ignorance therefore, they continue to spend as before and make no effort to either increase income or reduce spending. Partners also feel that trust has been broken when the other has been less than honest about their financial position. In an extreme example, a lady phoned our Helpline whilst there were people at her door to repossess the property, and her husband had not said a thing.
• Contact the Benefits Agency and other organisations outlined above to ensure you are getting all the help you are entitled to. Thresholds change frequently so just because you were turned down for something years ago does not mean that you are not eligible now.
• HMRC- if your predicament has arisen due to redundancy or short-time working, you may have paid too much tax under the PAYE system and are due a refund. Contact your tax office to check.
• Your mortgage company - your lender cannot be sympathetic to your problem if you haven't told them what it is! Always communicate in writing and keep copies of all letters sent and received. Only make offers you can realistically afford and back this up by sending copies of your budget and advise them of any change in your circumstances. Ask for their advice.
• Other creditors - once you have communicated with your mortgage company, (a priority creditor), ensure you write to everyone else you owe money to.
• Debt Advice agencies - if you have several debts it is vital that you seek free and confidential help from a debt advice charity. Contact the Consumer Credit Counselling Service (CCCS) on 0800-138-1111 or visit their website at www.cccs.co.uk . National Debtline's website address is www.nationaldebtline.co.uk and faith charities (oh the indignity of it all) such as Christians Against Poverty www.capuk.org also do a brilliant job.
Good luck. You're not alone.
Much of this information and more kindly nicked from
http://www.creditaction.org.uk/
No comments:
Post a Comment