Little advice please

JWM

Hello, not sure if I'm in the right place but here goes.

We have a big mortgage (about £170k now). I was made redundant but luckily found another job but paid less. The mortgage was the max we could borrow on my old salary. Well we currently have a loan of approx £15K and 4 CCs totalling £38k - 2 on life of balance deals.

Well we have cut back EVERYTHING (will post SOA tonight at home) but are still negative each month with the minimum payments. Had my light bulb light month and want to change things NOW. We have £10k of usused credit cards and a 5k overdraft but I'm going to try not to touch either.

First thoughts - the mortgage is reapayment. I am going to ask them if we can change to interest only and increase the term to reduce payments while we try to clear the other debts. Does anyone have any experience of the Abbey? I'm not going to say we're having problems - just 'looking at options' and see what they say.

Second - is there any point speaking to the CCs Loan comanies and asking them to reduce payments/interest for a while to help us?

Thirds - DMP. Not sure about this. We are managing. No payments missed. No arsey phone calls. Seems extreme for what we need to do.

I would like to say that we fully intend repaying everyone, but have to be practical. Have ebayed eveything and cut expenditure to the bone.

Many thanks in advance.

dancingfairy

Have you thought about maybe transferring some of the cc debts on to the spare cards? you might find they offer you some good deals for balance transfers and it may be cheaper than what you are currently paying?

How much are you short each month?

I am a little confused how you have credit cards and a dmp? are they not included in the dmp?

How disciplined are you? you would need to use any money you would save from not paying all the mortgage to pay off the ccs so you would need to be disciplined. How long would it be for?

I would have thought speaking to the card companies would be better than asking about the mortgage but I would seek further opinions before you approach anyone as you don't want to cause yourself more problems.

Good Luck
df x

JWM

Sorry - I meant go on a DMP to pay off all the debt (whilst leaving the mortgage as it is).

Take your point re mortgage, also who knows what will happen in the future re health, job etc. But a DMP sounds final and scary, and not sure if I can handle the pressure from the CCs etc to pay more as we have never even missed a payment.

RAS

Well done for getting back into employment so quickly.

I would recommend that you put up you SOA here so that folk can see what the extent of the problem is.

You might be able to get some slightly better CCs, even at the moment, so at least try it.

You mention your income but not your OH? Is s/he not working? If not, then seriously consider the possibility as every £1000 income for the second person is worth the same as you getting £1,600 more money.

Once we can see twhat the APRs are it will be easier to advise you.

RAS

Post up a statement of affairs (SOA) - http://www.makesenseofcards.com/soacalc.html use the format for MSE button at the bottom when you've done it

JWM

Sorry OH's income is included in the mortage amount but the debts are in my name, I applied for the CCs as I earn more.

Actually OH has his own credit card so we actually have £12.5k of unused credit cards.

Not sure about juggerling the debt though as with the transfer fees charged and the fact that I haven't seen any good transfer fees around this seems just like prolonging the debt?

I know increasing the mortgage is too but that seems like a better option to me.

Thanks for your thoughts - keep them coming! Its such a relief when you try to sort things out isn't it.....although I'm still waking up at night in a cold sweat.

JWM

Was just brave and phoned the Abbey, have got quotes for increasing the term to the max (staying on repayment) and going interest only. The lady was very helpful and I feel much happier now. The revised figures have given us lots to think about.

However, I wonder if someone could give me any pointers re payment arrangements v DMP as I just don’t think we’re in a huge fix and just need a few years breathing space. Am I fooling myself though?

Will post SOA tonight when I have bills to hand as I’m at work at the moment.

My heart is still hammering though – got myself in quite a state before calling –that’s why I don’t think I could handle the DMP!!

RAS

Hi

well done for making that call and finding out the situation.

It is not really sensible for us to make any other comment until we can see the situation in the SOA.

JWM

You're right of course.....but now I'm here I feel like I NEED to sort it out - I have the debt busting bug!

Although I just thought - got my first CC as an 18 year old penniless student - it was £5000 21 years ago - and have been in debt (if you count the mortgage) ever since!

I shouldn't be I must :rotfl: :rotfl:

JWM

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 1039
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 3009

Monthly Expense Details
Mortgage................................ 1094
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 224
Electricity............................. 40
Gas..................................... 80 high but the best deal I could get. Hope to have a surplus
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 12
Satellite/Cable TV...................... 25 includes TV, home phone broadband
Internet Services....................... 0
Groceries etc. ......................... 250 with 3 packed lunches daily Clothing................................ 20 for 9 year old DS
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 98 3 bus passes
Childcare/nursery....................... 199
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20 includes buildings
Life assurance ......................... 35
Other insurance......................... 8.25 gas boiler ins
Presents (birthday, christmas etc)...... 28
Haircuts................................ 10
Entertainment........................... 40 cineworld pass and trips with son
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 2205.75

Assets
Cash.................................... 0
House value (Gross)..................... 250000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 250000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(1094).....4.9
Total secured debts........... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
NR Loan........................15000.....274.......5.9
Egg CC.........................14500.....290.......5.9
A&L............................14866.....325.......18
Abbey CC.......................4704......96........16
M&S............................4161......104.......3.9
Total unsecured debts..........53231.....1089......-

Monthly Budget Summary
Total monthly income.................... 3,009
Expenses (including secured debts)....... 2,205.75
Available for debt repayments........... 803.25
Monthly UNsecured debt repayments....... 1,089
Surplus(deficit if negative)............ -285.75

Personal Balance Sheet Summary
Total assets (things you own)........... 250,000
Total Secured debt...................... -170,000
Total Unsecured debt.................... -53,231
Net Assets.............................. 26,769


Looking at it it doesn't look too bad. If I could reduce the mortgage, chuck all the spare cash at the debts we'd be OK in a couple of years. Thoughts please?

sarriep

According to your SOA you are £285 short of being able to pay your minimum payments on your loans - do you manage these or are you borrowimg more to pay them off?
Sx