Debts - remortgage? confused

bygones

Hello. I have a fairly specific question that I hope some of you experts will be able to help me with.

My history:

I have a joint mortgage with my partner which we took out when I was earning £24,000 per year. A few years ago that income dropped significantly when I was dismissed unfairly from work (I did get some compensation) and decided to start working from home. My partner is also a home-worker, but brings in very little income. I have been fairly successful but am still currently only earning about £12,000, and in receipt of working tax credit.

Over several years I have built up a few credit card debts, which I have always managed to transfer around on to 0% deals so didn'€™t feel too bad about.€“ I was just biding my time until I was earning fully. However, last year I became ill and was unable to do as much work as normal. Over the last few months I have been relying on my current 'in use' credit card to feed us, with my income just about covering other bills. I also have a loan I am about halfway through. I recently scared myself, adding up all my debts and finding I have about £16,000 of debt! I am also, stupidly, scared to tell my partner!

The second problem I have is that we are planning to move (hopefully this year) to a place of a similar price. Our mortgage is only around £30,000, with the house worth around £130,000. We therefore considered that this would not be a problem for the mortgage company (ING). However, I realise that they will take all my debts into consideration when we apply for the mortgage. I had planned to extend the mortgage / have enough from the sale to pay off all my debts at that time, but that won'€™t work if they won'€™t give us the mortgage because of the debts!

My question is, therefore, is it worth applying to ING for a further / remortgage now to consolidate my debts, so that the mortgage is the only debt we have when we want to move? Do you think this would be an effective way of dealing with it? I am now much better and back to working full time, and also on a course to improve my qualification so that I can get more / better paid work. I can also see that, if I am not having to pay out so much on the cards each month, I can feed us without resorting to more debt! I am concerned that dealing with the creditors to reduce my payments will affect our ability to get a mortgage.

CloudCuckooLand

You need to tell your partner. Working as a team, you will reach a successful conclusion more easily.

A place of similar price, is presumably pretty similar in features? Why spend thousands on selling and buying, when you have those debts?

Your partner may well push for the move, if not aware of the debts, but may not do so if the situation was explained...they can hardly blame you, for illness and job loss. Its not like you've spent it all on tat.

I fear you may stuggle to get £46k on such low income, with dependants.

Get to the debt-free wannabe forum for great advice and support.

Consolidation needs to wait, in my opinion, until you have a decent period of time behind you of consistent work and income, and with the support of your partner, so that you know the overall picture - suppose your partner also has £16k in debts that they are scared to talk to you about - its going to require a different approach...

Sit down and get it all out in the open. Sleep on it. Then plan a way out.

originalmiscellany

Well said Cuckoo. Transparency and honesty is needed between the 2 of you - so you know exactly where you are. I imagine, it'll take a few days to calm down, but compared to the inevitable stress you've been under in lying about your financial affairs, it'll be worth it - think of it as lancing a boil, get it into the open so you can heal the wound and get better.

Be strong, and let us know how it goes.

bygones

Hi, sorry I didn't realise how long it had been since I posted this! Thanks for the replies, both of you. I will tell him, I know I have to; it should be fine anyway, don't know why I feel so stuck!

We want to move to somewhere further north (scotland) where we can get the sort of place we want. I just feel that, as we have so much equity in the house we could get on a better footing and move on. Anyway, I'll try to let you know how it goes. Thanks again.