Help - any advice?

mercexe

Hi all,

Really stressed, worried and depressed right now as our finances are being stretched to the extreme. I hope people won't judge or criticise me, we have NOT lived an extravagant lifestyle but have had a number of major issues affect us. We are in our late 50s and the children are just about to leave home.

In summary, we owe around £50,000 on credit cards and have a £20,000 loan. We have a £200,000 interest-only mortgage on our home. Our house is currently on the market for £375,000. We sold it back in January for £380,000 but it fell through when our buyers' couldn't get a mortgage. Since then we've had little interest, and dropped the price to £375k even though the agents said it's worth £380k.

Monthly income is around £2,500. Mortgage is about £650/month and credit card/loan repayments are about £1,500. So you can see why we are struggling.

Is an IVA or bankruptcy the best option here? I don't know what to do anymore, we've just about kept our heads above water but in the last couple months have started missing credit card repayments, no doubt trashing our credit scores in the process :eek:

Thanks for any advice.

Hannah_10

Well you're doing the right things in letting us know a littl of your situation, we could use a little more. Can you do a SOA please? Here's a link that explains SOA's and has an easy-peasy calculator thingy too...

https://forums.moneysavingexpert.com/discussion/107280

Once we've had a good look and we can see what the state of your affairs really is then we can say stuff that is considered, rather than that is guessing.

HappyMJ

mercexe wrote: »

Is an IVA or bankruptcy the best option here?

No, only because of the level of equity in your house. Selling would be the best idea but you may just have to sell for a price you don't want.

You currently have £110,000 of equity and along with a smaller manageable mortgage of around £110,000 you could easily buy another house and clear all your debts.

mercexe

Hannah_10 wrote: »

Well you're doing the right things in letting us know a littl of your situation, we could use a little more. Can you do a SOA please? Here's a link that explains SOA's and has an easy-peasy calculator thingy too...

Once we've had a good look and we can see what the state of your affairs really is then we can say stuff that is considered, rather than that is guessing.

Oh, thanks for the info. I'll get all my paperwork together and fill in that SOA tomorrow. Thanks again, really appreciate it.

mercexe

HappyMJ wrote: »

No, only because of the level of equity in your house. Selling would be the best idea but you may just have to sell for a price you don't want.

You currently have £110,000 of equity and along with a smaller manageable mortgage of around £110,000 you could easily buy another house and clear all your debts.

Thanks. But would we really be able to get a £110k mortgage on a £220k house? Especially given our age and not-so-perfect credit file?

Miss_Poohs

No real advice, just wanted to say good luck and the fab peeps on this board will do their level best to help.

HappyMJ

mercexe wrote: »

Thanks. But would we really be able to get a £110k mortgage on a £220k house? Especially given our age and not-so-perfect credit file?

Yep, I don't see why not. What age were you thinking of retiring at? Mortgages can usually go up until you are 70 and even then they won't kick you out on the streets if you haven't made the last few years payments.

mum2one

Just wanted to say good luck as well from me, I know nothing about the houseing market, but am quite nifty at looking over an SOA, (do try to be gentle).

For one reason and another most of us as had a bad runof luck and the cards going wrong, hopefully we're get you on the right track. Theres a lot of lovely people on here xx

Hannah_10

There are three main ways people go into debt...
Flying the sick son home from Australia... Ok so not all of us had a situation THAT extreme, but a lot of us got caught out with debts because we had life-crises and debt was the lesser evil.
Incomming and Outgoings not mathcing... This is the most common, when you have too much month left at the end of your money and you're not even sure where it's going, but it sure is in a hurry to get there. One day you count it all up and it's horrifying.
Wild abandon... I think I have seen maybe half a dozen people on MSE who got into debt by being totally uncaring and living the high life till the loans ran out and to hell with the consequences. I know of precisely none in real life.

And even if you HAD got into debt because you were cracking open the champers in the penthouse suite of 6 star Dubai hotels every night ... So what? I mean seriously? This is a board for people who want to get out of debt. You want to get out of debt. I for one don't really care where it came from, I only care to see you rid of the burden.

Your credit rating is not beyond repair in any way shape or form yet. My initial impression is BR or IVA both sound wrong, I think we can probably get you on a DMP as a holding strategy until the house is sold and then you'll walk away debt free and with some capital, even if you then rent rather than buy... But until I see some numbers then that is officially a guess.

Try to get some sleep tonight and we'll go through the numbers tomorrow or whenever you're ready. There isn't a debt problem that hasn't got a solution, and this forum are a lovely lot, everyone will do as much as they can to help you find yours. It's gonna be ok.