Fed up, tired and confused!

rich_finch

Hello everyone!

I could really do with some good advice!

2 and a half years ago me and my wife bought our first house (1 bed home for £110k). We took out a 100% interest only mortgage and at the same time also borrowed £25k both from Northern Rock. The £25k loan was for home improvements and consolidation.

Everything was fine for 6 months until my wife started taking some heavy medication for a problem she had suffered with for a long time. The medication made her extremely drowsy and then eventually very depressed. A few months in she had no option than to quit her job leaving me to pay mortgage bills, loan etc.

We both struggled on thinking we could get through and that the NHS would sort out my wifes medication so she could get back on her feet and back to work.

A year and a half passed and nothing was any better it had got far far worse. By now I had borrowed more money from credit cards and a secured loan to pay bills, debts and living costs and my wife was still no better as she had been neglected by her doctors.

Things had go so bad I was having to find an extra £700 a month on top of my salary to survive? This was impossible!? Life was becoming very painful!

I managed to scrape together some of the £700 and family members were amazing! I never fell behind on the mortgage and loans but credit cards where impossible to pay?

We had now run up around £50k of debt altogether.

We went to CAB several times which I didn't find that helpful? one guy said go bankrupt and the other said debt management? but both agreed if we could sell the house and move back with parents then that would be the best idea of all.

We decided to sell the home! we sold it last December for £130k which enabled us to pay back mortgage, fees (early redemption charge, estate agent fees etc) and the secured £15k loan.

We then moved in with my wifes parents back in March and now we had no bills etc etc to pay, freeing up money and make life a little more bearable.

Unfortunately my wifes health got worse and she eventually ended up in hospital with anemia and had to have a blood transfusion. Caused due to medication she is on.

It has now been 5 months and physically and financially things are a lot healthier! My wife is a lot better after getting some attention from the NHS. She is now also on incapacity benefit (£300 a month) and is working a set allowed of hours at a local pub which does help financially and for her it means she can start having a life again as she spent nearly two years in bed sleeping and feeling very ill. I also recently got a 4k payrise.

All creditors are being paid and almost all are in the clear apart from 3 who are with debt collectors (wifes overdraft with natwest £1500, wifes egg c/card £1500 and my Amex card £2800) but we are paying them a set amount each month. Plus we now have money left at the end of each month to save.

Unfortunately though we are still without a house or flat and as you can imagine life at the in-laws is very difficult for everyone.

Hope this hasn't gone on for too long and that some of you are still reading? as this is where I need your help..........

My wife and I have had some disagreements recently.......... I want to stick it out with the in laws for another 6 months to save the extra cash we have to either pay more debt or for a deposit to rent a flat. I am also due a bonus at work soon which should help clear one of the 3 debt collection agencies..the idea being in 6 months we could rent somewhere...........

.. My wife on the other hand would like to go down a debt management route? but is also very keen to rent somehwere.

My argument with her is that we are now almost in the clear with all the creditors (all credit cards are within their limits and loan payment have been up to date for ages) and if we can use the extra money that is coming in now we can clear the debt collection agencies so our credit rating can be repaired. My wife spoke to someone at Gregory Pennington who said they will take all our debt and reduce the monthly payments by £200 and we will be debt free in 7 years? but wont this mean a bad credit rating for seven years plus going backwards by being in trouble with the creditors all over again!!!

QUESTION FOR YOU: What is the best option?

I look forward to hearing from some of you with your opinions. Thanks for reading!!

TallGirl

Sorry to hear you have had such a hard time of it but also pleased you managed to get out on the other side. I think you did the right thing in selling the property you could not afford and moving in with the inlaws. It must have been hard but thanks to that you have now almost come out on the other side.

I think you are doing the right thing in paying back what you can afford at the moment and see no need for you to use a fee paying debt management company such as Gregory Pennington. They will charge you the first payment up front and then a set percentage of your monthly payment until the debts are cleared in full. Why not speak to the creditors and see what they will accept from you. If you are due a lump sum you could even see if they will accept a full and final offer considering your circumstances and you wifes illness. If you want debt advice please contact one of the free debt advice agencies such as CAB, Payplan or CCCS.

Also if you post on the Debt Free Wanna Be board they may have some more suggestions and migth be able to look at your income and expenditure to work out a realistic debt repayment plan without the charges.

Hope this helps.

ailuro2

I agree with TallGirl, the people over on Debt Free Wannabe know much more about how to help you than the people reading mortgage free board, pop over there, someone will have an idea or two for you.

My advice - well done for getting through your trying times, it's not much longer to go now, and if you can persuade your wife that you'll have a different roof over your heads by, say, Christmas time that might be enough to hang on in there and pay the last bit of debt off. With a good credit score you'll be able to rent somewhere nice, with debt still hanging over your head you may be more limited to where you rent.

Hanging on till Christmas will see the housing market biting hard, and there will be many more people renting out proprties because they can't get them sold, so you might pick up a bargain if you can sit tight....the paper the other day said rents looked o be coming down a bit too.

Best of Luck, it must be very hard staying with in-laws, and from a woman's point of view, I hate sharing my kitchen with anyone else.;)

lethal0r

good luck. seems u r past the worst. keep going.

JayZed

rich, you seem to have managed an extremely difficult and distressing situation pretty well. It sounds as though you're very much back on the right track entirely though your own efforts.

I agree with the posters above on two counts - I don't see any benefit to you in going down the debt management track when you're dealing with the situation so well yourself; and you'll get better advice and support on the debt-free wannabe board than you will on the mortgage board.

Dithering_Dad

Hi, I've just read your thread and have to say that I was really impressed with the way you turned everything around and how you've gotten yourselves back onto your feet.

I understand why your wife now wants to move on with her life, which includes getting your own place. I should go onto the DFW board as others have suggested and post an SOA (there is a sticky to explain how to do this). This will allow you to see if you have enough income to rent (no point in having your own place if you just continue to run up debts) and the good people of the DFW board will help you with ways to manage your current debts better.

Good luck!