50k unsecured debt need help

dave73

carlw wrote: »

Hi Dave

How have you got this level of credit and run up the debts? Im asking because i think it is as important to nip the cause of this debt in the bud in order to rectify the problem.

At first glace you are fortunate that you have a very large amount of equity in your property which could be used to clear your debts.

Your current level of debt is clearly not managable and you are missing payments, so your obtions are likely to be an IVA or a debt management plan. It may be easier and quicker to look at clearing your debts by using some of the equity in your house. I would not do this without first understanding how you got to this point. If you have a gambling problem for example you need to seek help with this otherwise you could end up running the debt back up. If its just living beyond your means for a long period of time then there is plenty of advice on this website that should help you manage you finances better.

You have taken the first step in sorting yourself out. Well done.

it was basicly living beyond my means and i was unable to work last year for 4mths so was living off credit cards but now just want it all sorted out

theoretica

Do you NEED a car? If you do could you sell the expensive one and buy a cheaper one? Could you walk further instead of paying parking?

You are paying a lot for phone/mobile/TV, can you ditch the satellite and watch online or freeview?

Do you have other possessions from living beyond your means which you could sell?

Hannah_10

Well done for getting your SOA up, it can be daunting.

2 Things leap out at me to start off. The first is that you do have money to pay the mortgage and your creditors you just don't have as much money as they'd like. This means that you could do a self administered debt management plan (the companies that adminsiter them are out and out rip off merchants). What that basically means is you look at your income and expenses and see what's left (in your case your SOA shows £297 a month left) then you divide that by your creditors and pay them back, albeit slowly. There are more complicated ways of interpretting that, but for an initial explaination that'll do.

This is where we get to the second thing that strikes me. Dave you say you ran up £52k in 4 months off work? That's like living on £15.5k a month. According to your SOA you earn less than that a year if your take home is £1200p/m. Something's wrong here. I think I might have an inkling what too. Your SOA shows you have nearly £300 a month left, do you really see that? Truthfully? Also looking at your SOA you live like a church mouse, spending less than a fiver a week on beer, DVD's, music, games, books and dating nice ladies all put together. You sure? Perhaps you're spending more than you think you are? Most people are.

Consider keeping a spending diary. All this actually means is get a notebook, keep it with your wallet and write down every penny you spend for a fortnight. Everything. Even if you shove some small change in the charity box or find some down the back of the sofa. If it goes in or out log it. A fortnight should give you a better idea where it's really going. A month is the gold star standard. I've done this and so have a lot of others here and it's mightily revealing.

dave73

ok ive updated my soa with all payments im making ive got some payment plans set up but have missed payments trying to pay everything else

dave73

Hannah_10 wrote: »

Well done for getting your SOA up, it can be daunting.

2 Things leap out at me to start off. The first is that you do have money to pay the mortgage and your creditors you just don't have as much money as they'd like. This means that you could do a self administered debt management plan (the companies that adminsiter them are out and out rip off merchants). What that basically means is you look at your income and expenses and see what's left (in your case your SOA shows £297 a month left) then you divide that by your creditors and pay them back, albeit slowly. There are more complicated ways of interpretting that, but for an initial explaination that'll do.

This is where we get to the second thing that strikes me. Dave you say you ran up £52k in 4 months off work? That's like living on £15.5k a month. According to your SOA you earn less than that a year if your take home is £1200p/m. Something's wrong here. I think I might have an inkling what too. Your SOA shows you have nearly £300 a month left, do you really see that? Truthfully? Also looking at your SOA you live like a church mouse, spending less than a fiver a week on beer, DVD's, music, games, books and dating nice ladies all put together. You sure? Perhaps you're spending more than you think you are? Most people are.

Consider keeping a spending diary. All this actually means is get a notebook, keep it with your wallet and write down every penny you spend for a fortnight. Everything. Even if you shove some small change in the charity box or find some down the back of the sofa. If it goes in or out log it. A fortnight should give you a better idea where it's really going. A month is the gold star standard. I've done this and so have a lot of others here and it's mightily revealing.

the debt has mounted up over the years not just the 4mths i wasnt working

dancingfairy

O.K this is how I would approach things.
Are you up to date on your mortgage - this is probably your priority right now.
You should pay the outgoings as listed in the top half of the SOA - your priority bills -ie mortgage, council tax, food - are you sure this is correct, clothes, electric, gas etc.
What's spare can go towards you debts - your SOA is showing at the moment this is approx 300 ish pounds but I suspect it is a bit less than this.
If you have missed mortgage payments then you need to get in touch with them and arrange a payment plan - ask if the missing payments can be added to the end of your term or see if you can spread the arrears over a period of time - remember that you have less than 300 a month to offer towards the arrears on top of your regular payment to them so be realistic.
The unsecured debts will need to wait whilst priority debts are dealt with - prioirity debts include mortgage, gas, elcectric, water, council tax etc - they won't like it but tough. I would write to your unsecured creditors and explain that you are having problems and that you are seeking advice and please accept 1 pound as a a token gesture for now.
Unless you plan to go bankrupt which is a possibility but not neccesarily your best option I would try and get on top of the priority debts and save the house.
Your options then appear to be 1) an IVA or 2) sell the house.
You could do a debt management plan but with less than 300 pounds to offer your creditors and over 50k in debt it will take many many years to clear (unles you are expecting great promotions as work) and is not very practical and it is unlikely your creditors will accept waiting decades to get their money back. If you loose the house by bankruptcy or failing to pay the mortgage then you will likely get less than the market value so it is always best to sell the house yourslef if possible - hence why you need to sort out any mortgage issues if neccesary. Also if you were to enter into an IVA it will be much easier if any priority debts are dealt with first.
I would take the SOA you have drawn up and appraoch the debt charities to see what they suggest for you. You can even enter the figures into an online calculator for CCCS and it will give you some rough suggestion. Try also phoning CCCS or National Debtline or your local CAB.
Best of Luck
df

dancingfairy

Forgot to add you also need a new bank account - I am assuming your bank with Halifax? as soon as they get wind of your problems they are legally allowed to take money from your Halifax bank account to pay off other Halifax debts - this works the same for other companies as well - any company you bank with and have debts with can take your money for themselves. To save them rinsing your account and causing more problems with the mortgage then get a brand new account - you will probably need a basic bank account due to what I suspect is a now damaged credit rating - try Co-op - you will then be in charge of who gets what and when and can get back on top of things.
df

elfen

This may sound silly, but when the new bank account is sorted, you NEED to arrange with your mortgage providers to start paying back the arrears. This is a PRIORITY debt, and takes all importance before any of the others - as not paying the mortgage could lose you your home, so the lion's share will need to go to paying back what you owe them. It's a matter of figuring out what you can live without, working out a doable budget (don't forget a little for getting a few tins of a weekend and watchinng the footy/DVDs at home)

barbarawright

What did you decide to do after the last time you posted? Presumably you didn't take out an secured loan (which is good)

https://forums.moneysavingexpert.com/discussion/1930589

dave73

barbarawright wrote: »

What did you decide to do after the last time you posted? Presumably you didn't take out an secured loan (which is good)

never went for a secured loan but things are just a mess and really need to sort it out