Desperate for help

chipsmum

If I am honest, I have lived off credit for more than 20 years. Taking unsecured loans to pay credit cards and then just running up the credit cards again. When house prices were rising I had plenty of equity in my house so increased my mortgage a couple of times as well.
I have a well paid job (of 32 years) - £44k per annum and currently have no arrears on any of my loans or credit cards but that is only because I have robbed Peter to pay Paul each month. I have now reached the stage where I am using 98% of my available credit and have run out of options for borrowing any more money. My cards will all be maxed out within a couple of months and my total expenditure is probably around £500 more a month than I earn. My company has frozen pay rises for the last 2 years and my annual bonus of around £4.5k has also been stopped. This has helped me to scrape by in recent years by using it towards my monthly outgoings. I have cut my expenditure in every way recommended in this forum but cant get cheaper loans or 0% credit cards as nobody will lend to me now due to the amount I already owe. I am scared to total it up but guess it is around the £100k mark yet I still have an Experian credit score of 999.
I am at my wits end and dont know where to turn. I worry about debt constantly and cannot sleep for fear of losing my home. My mortgage is actually very cheap as it tracks at 0.24% above the base rate until 2012. I have thought of selling my house and trying to buy a cheaper property but dont know if I would get another mortgage and would have to pay a large redemption penalty so dont think I would be any better off with a smaller mortgage but a higher interest rate.
I feel like a totally hopeless case. I have read everything I can about IVAs, Debt Management Plans and Bankruptcy but am totally confused.
I dont actually want my debts written off - I have incurred them and am willing to pay them off even if it takes me to retirement age but can't see anyway of doing this so that I have a monthly payment I can afford and with interest continuing to mount.
Is there anyone on the forum who has had debts this big and managed to find a solution that didnt end up in bankruptcy and homelessness. I know I need professional advice but am so embarrased that I am struggling to take that first step. If I knew that others had amassed this amount of debt and had come out the other side, I think I would feel more confident to ask for help. As it is, I am just becoming more and more desperate and depressed.

pure_dead_dopey

Hi Chips Mum

You need to post a SOA and have a look on the CCCS website and do the Debt Remedy. You don't have to give your name and it will give you options to think about. We were in a very similar position just after Christmas and are now on a DMP, long long road to go, but I am sleeping at night and can see that it will get sorted, even if its going to take a while. A DMP does mean you pay your debt back, but hopefully, if you can work with one of the debt charities, your creditors may stop interest and charges, we have 22 creditors and so far 20 have stopped interest and charges, two months in, so it can be done.

Post the SOA and lets see if we can help some more.

Good luck

PDDxx

gonzo127

well what can i say congratualtions on taking yoru first step by posting on here that you need help

now the next scary thing is doing the SOA (statement of affairs) http://www.makesenseofcards.com/soacalc.html this will put down all of your finances in black and white, scary yes, but on my life it is so powerful you cant believe how much better it is to actually have got it all together in one place

now without seeing your SOA it is hard to suggest the best course of action for you however the one option that is about which people do not seem to know much about is the DMP (debt management plan) these are run by the debt charities for free such as the CAB, CCCS national debt line or payplan (or some fee charging companies for those crazy enough to take them on when there is a free option)

basically a DMP is a agreement between your creditors and the charity (or even yourself if you want to do a self manged one) where they freeze interest and charges and you pay a set amount each month to each company based on how much spare money you have on your SOA (split by how much you owe each one so the one you owe most to gets the highest % of the money) however this will TRASH you credit score for 6 years and you will not be allowed to get any further credit without breaking this agreement until it is paid off

DVardysShadow

chipsmum wrote: »

. My cards will all be maxed out within a couple of months and my total expenditure is probably around £500 more a month than I earn. My company has frozen pay rises for the last 2 years and my annual bonus of around £4.5k has also been stopped. This has helped me to scrape by in recent years by using it towards my monthly outgoings. I have cut my expenditure in every way recommended in this forum but cant get cheaper loans or 0% credit cards as nobody will lend to me now due to the amount I already owe. I am scared to total it up but guess it is around the £100k mark yet I still have an Experian credit score of 999.

Add it up. It is the debt which will bite you, not the answer.

As for the credit score, I imagine the highest credit scores are reserved for those who are closest to being swallowed by their debts.

You should be able to take action now to prevent your cards maxing - just stop spending, while you sort out your SoA.

bloojeans

I was embarrsed and ashamed but hey, most of us are in the some boat, paddling like hell to keep afloat. You amongst lots of fab friends on here. Dont think you can shock any of us. Well done for making a start.
Its a great relieve when its out in the open. I was terified to tell my husband and there was hell to pay but we got over it and its heaven now not having to hide stuff and dive for the phone or turn it on silent. My phone was on silent so much DH was going to buy a new one, he thought it was broken !!!

Jox
Jo x

frizz2

Do you have any equity in your property? Could you borrow some money on your mortgage and pay a lump sum off your debts? Not all of it perhaps by budgeting you could pay off some of the debt without putting it all on your mortgage.
I would ask alot of people for advice, Citizen Advice Bureau, Bank managers etc. Do lots of research to find the best way forward. Cut back all non essentials and start planning how to pay back. Good Luck

frizz2

Also, I forgot to add get some good books from the library about saving money. I get so much inspiration from other people stories it helps me stay focused on keeping my spending down.
You are not the only one in this position! I wish you luck and share with us what your next steps will be

chipsmum

I have gone through the budget process on the CCCS website and they have given me a booklet with my Debt Remedy solutions which are either Trust Deed or DMP or Self-Managed solution. I was favouring a DMP although it will take a lot longer to clear my debts this way than with a Trust Deed. However as I live in Scotland, I have now also been advised about DAS - Debt Arrangement Scheme. This sounds very similar to a DMP but guarantees that all interest will be frozen and that no further action can be taken by my creditors (unlike DMP where interest MAY be frozen and creditors can still pursue further action).
I believe DAS is only available in Scotland. Are there any other fellow Scots out there who have used this option ?

RAS

Hi

One Scottish OP to send a pm to is coolcait whi is in Scotland.

Can i also suggest that you think about things like taking lodgers if you have room, as you can earn £370 is per month without it affecting your tax situation. Not great but a couple of years of that would make a major inroads on your debts.

katsu

Read Hypno's diaries. She had huge debts (of the level of yours and has amazingly reduced them so is well on the way to being debt free. She has done this without a DMP even (I believe).

Good luck.

RAS

Jacks is pretty stunning too - around £97K?