Author Topic: Advice Please  (Read 3824 times)

Lordeffingham

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Advice Please
« on: Jul 05, 2013, 11:03:06 AM »
Hello, I find myself at a point where my life is suffering greatly due to circumstances many of which are beyond my control, and feel ill, very unhappy and also quite bitter about the very unhelpful way my bank/creditors have acted when seeking their advice over responsible methods of sorting things out without defaulting or allowing myself to appear to be a bad debtor.
I appreciate many people will have suffered and found themselves in the same kind of situation I do now, but am angry about how an industry which has acted so irresponsibly and dishonestly, still seem to have the right to criticise and fail to help those choosing the option to seek an early and sensible consultation with them.
I have a good job with a fair salary and not massive debts, however my monthly running costs along with the actual mean reduction in my net pay over the past 5 years, and the obvious price hikes in most of the general cost of living expenses, allied to the fact my wife and I now have 4 adult children under our roof, has reduced my available monthly disposable income is almost zero.
We have had no holidays for 5 years, don't drink or smoke and don't ever go out or socialise, and it hardly feels like life is worth the effort.
My bank, the TSB, is the main creditor and have failed after 3 or 4 appointments to come up with anything which would help. I took out a consolidation loan with them in 2008, for a figure of £33,000 for which the payments were £505.00 per month, and these have been taken directly from my account, on time and without any issues, however the debt is still almost £10,000, with 22 monthly instalments left to pay.
I did speak and get advice from a debt charity, but found their suggestions really unhelpful and rather unrealistic.
I have decided that I am going to contact the TSB loans department and tell them I'm unable to service the loan payments from this point, and can easily example the obviously untenable situation my finances are currently in each month, and suggest that in fairness I feel after seeking advice from them and other agencies, I can now only afford to pay them £50.00 per month towards this debt.
I would appreciate your views and advice on the position I find myself in and if this means of freeing up some cash to actually use to live, is sensible and a fair proposition?
 

James Falla

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Re: Advice Please
« Reply #1 on: Jul 05, 2013, 04:36:55 PM »
Hi there.
 
Sorry to hear about your situation. You mentioned you have already had advice from a debt charity. May I ask what they suggested?
 
I am assuming that you are a home owner? That being the case and if you can only now pay £50 a month towards your debt possibly the best option open to you is a Debt Management Plan (DMP). This is simply an agreement to reduce the payments  you make towards the TSB debt to the amount you can afford (ie £50 a month). Of course TSB don't like it but if you can afford to pay no more then there is nothing else you can do. If you are currently banking with Lloyds then you will need to open a new account elsewhere to protect against the possibility of them taking money you do put into your account to offset against the debt.
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Lordeffingham

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Re: Advice Please
« Reply #2 on: Jul 06, 2013, 02:14:37 PM »
The advice I got was seemingly quite basic and bordering on stupid in my view, almost childlike, ie suggesting I sell all my assets, car/house to offset or reduce my outstanding debt to a level which would help make the payments more manageable, however quite clearly I cannot live without my car and this suggestion seemed to suggest a rather idiotic stance in essence.
I will discuss the option of a voluntary payment in the region of £50.00 with the TSB, and realise though they may have to negotiate or accept a lower payment, changing to another bank may be unavoidable.
I have held a long standing account with the TSB, which sees in excess of £2000 per month move in and out of it, and am wondering if they will maybe see sense in allowing my account to remain with them, and give me some assurances that after the arrangement we agree to, that they will refrain from any temptation to take any further or additional monies, as they may see fit.
I appreciate they may play hardball, but my account remaining with them would seem a sensible option for both mine and their benefit, however I do understand your point and realise this might be something which is unavoidable.
We currently live in a rented property which unfortunately does have very expensive running costs, though it would not really be a viable option to consider moving property due to the large size of our family and the location and relatively reasonable rent.
I do own a property, a small terraced house in Salford which my mother in law lives in, and which I purchased from her and her husband some 5 years ago, prior to his death some 4 years ago. It is worth between £70,000 and 80,000 and I owe £60,000 on it. I have explored a further advance on the mortgage, however all current lenders seem to want too much equity for this to be a viable option, and I did also enquire with my Building Society if there was any way they might allow me a mortgage holiday or similar, but they again were completely unhelpful in this regard.
I have always remained an honourable debtor and have never failed to discharge any legal debt, or had any CCJ's etc, but the frustration in the inflexibility of the financial institutions is making me wonder why I am really that bothered.
I appreciate your advice but am still unsure of what position declaring that I cannot continue paying the large monthly repayment will have, and whether or not they are obligated to accept whatever figure I offer them?

James Falla

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Re: Advice Please
« Reply #3 on: Jul 08, 2013, 12:50:12 PM »
Hi there
 
Given the situation with your property I believe a debt management plan is certainly the way forward. In my experience you have to expect the worst which is that Lloyds TSB will suddenly start to become extremely unhelpful as soon as they understand that you are not in a position to continue repaying their loan. My advice would be to open a new bank account asap. Then even if you do not need it you have it in the background just in case.
 
In terms of accepting a reduced payment amount, Lloyds are not obliged to do anything. However if you present them with your income and expenditure information and from that it is clear that you are making your best offer of repayment they will generally accept this as they understand you cannot get blood out of a stone.
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