Help Im New! Advice On Debts And Options

purple-pear

Please Can Anyone Help With General Advice Dont Know What To Do Crying All The Time And Feel So Depressed......

To Start With I Own A Property Worth Approx £220,000 Got A Self Cert Mortgage With A Secondary Lender In My Name Alone The Repayment Is On Interest Only And It Takes Up All My Partners Wage.....

I Also Have A Fialing Business With My Mum Who I Owe Half The Money 2 As She Currently Has The Debt In Her Name But I Have Joint Responsibility So Currently The Loan We Have Is Being Payed On Her Credit Card And The Rest Through Doing An Odd Party Selling Handbags (long Story) But I Need To Find Her Half Of The Money.

My Credit File Is Currently Good So Think I Can Borrow More To Sort This Out.... I Pay The Min Payment On All The Cards And Then Put It Back On Each Month Neer Paying Anything Off As I Cant Afford 2. I Also Have A Loan And A Big Overdraft.

No Equity In The House Only On Fixed Rate Until Next Year And Cant Swap To Another Lender As Now Have No Equity. Would Like To Try And Keep House??

Do I Stop Paying Eerything When I Have Paid My Mum Back? Then Try And Negotiate F+f Settlements With My Credititors Or Let It Get Passed To Debt Collection Agency And Set Some Money To One Side Now When I Get More Credit To Try And Settle These For Less.

Iva An Option But If It Fails Will Thy Automatically Make Me Bankrupt? Or Would I Be Better Goin Bankrupt And Keeping The House As I Have No Equity Told It Wouldnt Be Taken? But Then If Mortgage Payments Go Up And I Am Already Bankrupt If House Was Reposssessed Would I Be Left With The Debt From The House Repossession Shortfall In My Name And Bankrupt Or What?

Or Do I Do A Dmp And Then Try And Negotiate With Creditors?? Aaagghhh Dont Know Head Spinning......

Got A 12 Month Old Little Girl Just Want To Enjoy Her.

Any Replies Appreciated Soooo Much.

poorandindenial

hi purple-pear

It sounds like your situation is pretty complicated so you might want to contact one of the debt charities:

http://www.moneysavingexpert.com/loans/debt-help-plan#help

and if you need advce on your business then you might want to get in touch with business debtline (I think they are www.bdl.co.uk) the sister organisation to national debtline.

In the meantime, the easiest way for us to help you is for you to complete a statement of affairs and post it up (there is a SOA calculator at www.makesenseofcards.com)

Before you start trying to borrow your way out of this do keep on talking to us and also do speak to one of the specialist charities in the link above as borrowing more may well make it worse in the long run.

As far as IVAs go, they are often not as suitable as peope think (largely because of the publicity some shonky companies give them) You amy have already seen it but here is Martin's guide to IVAs:

http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

I wish you every success in getting a handle on this and look forward to yur SOA if yu feel up to posting one. (if you do you may want to do it joint with your partner to make things a bit easier)

purple-pear

THNKS FOR QUICK REPLY KNOW IT IS V COMPLICATED AND DONT THINK ANYONE CAN HELP THY WILL ADVISE EITHER IVA OR BR AND I DONT FANCY EITHER.

IF I DEFAULT ON PAYMENTS HOW LONG WILL IT BE ON MY CREDIT FILE IS IT 6 YEARS EVEN IF U HAVENT CLEARED THE ACCOUNT BY 6YRS?
:rolleyes:

savingholmes

Welcome purple-pear

Could you post a statement of affiars using makesenseofcards (another website) so that we can understand the scale of the problem and offer more specific advice? You would list all your income, outgoings, debts including aprs and minimum payments and the value of any assets... You then reformat it for MSE and post it on here...

I did that about 2-3 months ago and it has made a huge difference already.
Good luck!

purple-pear

This is it cant believe how bad it is.....Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 1150
Benefits................................ 100
Other income............................ 100
Total monthly income.................... 2750

Monthly Expense Details
Mortgage................................ 1170
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 60
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 5
Mobile phone............................ 60
TV Licence.............................. 10
Satellite/Cable TV...................... 20
Internet Services....................... 10
Groceries etc. ......................... 250
Clothing................................ 10
Petrol/diesel........................... 250
Road tax................................ 5
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 300
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2475

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 220500

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 220000...(1170).....0
Total secured debts........... 220000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA CARD......................4500......100.......0
EGG CARD.......................3000......70........0
MINT CARD......................3500......120.......0
HIRE PURCHASE CAR..............8000......170.......0
BARCLAYS LOAN..................15500.....220.......0
OVERDRAFT BARCLAYS.............4000......30........0
NATWEST CARD...................4000......100.......0
Total unsecured debts..........42500.....810.......-

Monthly Budget Summary
Total monthly income.................... 2,750
Expenses (including secured debts)....... 2,475
Available for debt repayments........... 275
Monthly UNsecured debt repayments....... 810
Surplus(deficit if negative)............ -435

Personal Balance Sheet Summary
Total assets (things you own)........... 220,500
Total Secured debt...................... -220,000
Total Unsecured debt.................... -42,500
Net Assets.............................. -42,000

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.

MyLastFiver

Purple Pear,

This isn't as bad as it looks. You have money over each month (£275) to pay to your creditors. I would advise you to go down the Debt Management Plan route first. Ring Payplan. When I set up my DMP in June I had £320 to pay towards total unsecured debts of £60k. Every one of my creditors accepted my offer. OK, apart from one, but they have now accepted that that's all they're getting, and have stopped hassling me about it.

I'm presuming the business debts you speak of are not included on your SOA. I have no experience of business debts so can't offer advice, apart from saying that by paying them with her credit card, your mother is turning a business debt into a personal debt. If I was her I would stop this - now.

Don't try to borrow your way out of this - just accept that in terms of meeting the conditions of your credit agreements you have reached the end of the line.

I'm now nearly 6 months into my DMP, living within my means, getting no threatening letters or phone calls, sleeping soundly at night and enjoying my baby son. If I were still juggling credit cards around, applying for loans, trying to organize myself to make 10 different minimum payments every month, etc etc, I would still be a wreck.

The establishment wants to separate you from your baby by forcing you to flog yourself to death working just to make debt repayments. !!!! them.

Stop trying to spin the plates - just let them fall. It's a great feeling.

Good luck.

purple-pear

Would Love To Enter Dmp And Feel At Ease However Worried As Read Loads Of Posts Saying Ok For First 12mths And Then Thy Start Adding Interest And U Can Be Back To Square One. Also That Credit File Affected For Years Until Debt Repayed. Was Thinking Of Iva But Then People Are Saying Bankruptcy Is Better If Have No Equity In The House As I Could Keep It. Just Want To Sleep Again, Save My Relationship And Enjoy My Child.

Only Reason I Am Slightly Bothered Re Credit Rating Is Becuase When Houses Start Going Up Want To Down Size, Start Again And Get Another Mortgage As These Are A Rip Off. Need To Decide Quickly Whilst My Credit Rating Is Ok??

10past6

Consider a DMP to begin with, then look at the alternative options in more detail.

Look at my signature for futher details.

MyLastFiver

Fairy nuff - I understand your worries. You need to get expert advice but I doubt you can be declared bankrupt because you are not actually bankrupt! Plus bankruptcy will have a more severe effect on your credit rating than the defaults you incur whilst on a DMP. Not sure about IVAs but when I contacted Payplan the IVA they offered did not seem like a good deal for me, plus I think that it's easier for your creditors to get their hands on your property with an IVA. I may be wrong - you need to ask Payplan or National Debtline these questions.

As for creditors resuming interest charges after a year, well some will and some won't, but if you still can't afford the repayments then your creditors will have to either renegotiate another reduced payment, or else take you to court. The court will order you to pay what you can afford, and order your creditors to stop interest and charges. The only effect on you will be the CCJs on your credit file. But as your credit rating will be stuffed anyway, this doesn't matter.

I'm afraid that you will need to modify your medium and long-term goals in the light of your situation. You cannot afford to meet your creditors' agreed terms. Therefore, soon, you will default. Then your credit rating will be screwed anyway. Whichever option you take, it is unlikely that you'll be being accepted for mortgages for the next eight years, probably longer.

For me, coming to this realisation was the most painful leap to make, but once I had made it, the most liberating. Once you stop worrying about your credit rating, you will start to count your blessings. You have a partner, a baby, a nice house. Defaulting on your credit card payments cannot take these things from you.

Sorry - I don't mean to make things seem worse for you - just taking you through the drastic re-thinking of priorities that I had to make.

savingholmes

purple-pear wrote: »

This is it cant believe how bad it is.....Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 1150
Benefits................................ 100
Other income............................ 100
Total monthly income.................... 2750

Monthly Expense Details
Mortgage................................ 1170
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 60
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 5
Mobile phone............................ 60 can you get this cheaper on pay as you go - you need to try and get your contract down if you can or even sell the phones with the contract if you can
TV Licence.............................. 10
Satellite/Cable TV...................... 20 Do you really need this - can you get the internet including in your sky package?
Internet Services....................... 10
Groceries etc. ......................... 250 Can you look at the old style board for ideas on how to reduce this? Meal planning and taking a pre-costed list with you works wonders
Clothing................................ 10
Petrol/diesel........................... 250 Is there anything you can do to reduce this? Car share? Walk more? Reduce your number of trips?
Road tax................................ 5
Car Insurance........................... 40 Shop around using a cashback site like quidco when this is up for renewal
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 300 Can you get childcare vouchers thro work's payroll - to reduce your tax bill - effectively gives you nearly a £100 extra in your pay per month for £243 outlay if you can? Can anyone look after your child for free? Can you change your hours to reduce this bill?
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2475

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 220500

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 220000...(1170).....0
Total secured debts........... 220000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA CARD......................4500......100.......0
EGG CARD.......................3000......70........0
MINT CARD......................3500......120.......0
HIRE PURCHASE CAR..............8000......170.......0
BARCLAYS LOAN..................15500.....220.......0
OVERDRAFT BARCLAYS.............4000......30........0
NATWEST CARD...................4000......100.......0
Total unsecured debts..........42500.....810.......-

What are your APRs do you know? Can you move any of these to interest free or balance for life rates?

Monthly Budget Summary
Total monthly income.................... 2,750
Expenses (including secured debts)....... 2,475
Available for debt repayments........... 275
Monthly UNsecured debt repayments....... 810
Surplus(deficit if negative)............ -435

Personal Balance Sheet Summary
Total assets (things you own)........... 220,500
Total Secured debt...................... -220,000
Total Unsecured debt.................... -42,500
Net Assets.............................. -42,000

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

I've added some comments on where you may be able to cut back above...

Also consider the special occasions board for ideas for pressies eg snowman soup, flannel reindeers and flannel yule logs... A more positive focus than just looking at numbers

Also look at the £10 a day challenge to try and make some extra money on cash back sites, survey sites etc.

Also is a second job for one or both of you an option?

HTH and all the best! Well done for posting, that is the first step:T

whitewing

purple-pear wrote: »

Would Love To Enter Dmp And Feel At Ease However Worried As Read Loads Of Posts Saying Ok For First 12mths And Then Thy Start Adding Interest And U Can Be Back To Square One. ??

You'll be handling your budget very differently after a year of being on here, without being hassled all the time. Being able to enjoy time with your family will also maybe change your priorities. I can't see how anyone can think clearly when they are worried about payments all the time. Good luck in finding your solution.