husband just told me we owe £40,000.....

whatamessbooboo

We are in a mess and Im hoping I may get some advice here on just where to start.......
My husband is self employed and the last 2 years my son has been very sick and has spent most of this time in hospital. Consequently my husband has had a lot of time (obviously unpaid) from work.
I have just found out yesterday my husband owes nearly 40k on credit cards - all used to pay suppliers for his business, not frittered on gambling, women etc. He didnt want to tell me as I was under so much stress with our sick baby.
He is back to working full time again now and I work part time (I will earn 27k this year) but I am able to work overtime and go full time in April next year.
I have transferred £10,000 on to 0% credit card today (it cost me £300 to do this) and I have about £3000 in savings. This leaves us with 27k of debt attracting massive interest.
Our mortgage is only 22k (150 pcm) so I thought about taking additional lending for the 27k. Is this a good idea?
The only problem is my husband has only earned 5k a year the last 2 years so will we even be accepted?
His books are also not up to date and my mortgage lender has said they will 'probably want to see them'.
I have rambled and can reply with any more specifics but would be very grateful for ANY ideas/wisdom of how to start getting out of this mess.

Thankyou

joolsybools

Oh dear, I'm sorry to hear htis but you have come to the right place for help . The best thing to do is post an SOA and people can give you detailed advice on what to do. http://www.makesenseofcards.com/soacalc.html Good luck!

CountingPennies

At least you know where you stand now. I can't offer any advice apart from post your SOA for people here to look at. I hope you child is fit and well now. And well done to your husband for telling you now. He must have found that really hard with the whole "male pride" of looking after you and your family. Good luck, and keep on posting. This website has been a saviour for me. I'm still in financial difficulty but just having people here to support me has been amazing.

dancingfairy

The trouble with adding debt to the mortgage is that
1) interest rates are almost certain to rise (even if you get a decent rate and can fix when you come out of that you will be hit with the rate rises)
2) you may not be accepted given your circumstances
3) most importantly you are turning unsecured debt into secured debt - this means if you default your home is at risk.

I suggest you start by doing a full SOA and see where to go from there - how much you have 'spare' for repayments each month etc. You can then see what the best resolution would be - whether you can meet the minimums and go from there, whether to try and agree reduced payments or whether something more drastic would work better for you - ie selling the house, bankruptcy or an IVA. Do take your time though as you don't want to rush into something.
National Debtline, CCCS or your local CAB should all be able to talk your SOA through with you and go through the options.
I really, really would not go with a fee charging company though -at best they take money that could go towards debt repayments, at worst they can 'miss-sell' you something like an IVA or bankruptcy.
Also I'm sure if you post the SOA up here you will get loads of advice and support.
Best of Luck
df

sickasachip13

Nothing specific to advise really just that these thing happen. We owe a similar amount and we went onto a DMP with CCCS, this was the best thing we ever did as it made the payments manageable and everything feels more in control. Unlike many people we did this before the poop hit the fan and we've found our creditors helpful for the most part. Obviously a DMP has serious implications for your credit rating but it may be worth considering.

Best of luck - onwards and upwards.

whatamessbooboo

Thanks for the support everyone. What's a SOA?
Complete novice here..

katsu

whatamessbooboo wrote: »

Thanks for the support everyone. What's a SOA?
Complete novice here..

See the link in this post here...

joolsybools wrote: »

Oh dear, I'm sorry to hear htis but you have come to the right place for help . The best thing to do is post an SOA and people can give you detailed advice on what to do. http://www.makesenseofcards.com/soacalc.html Good luck!

smartiedriver_2

dancingfairy wrote: »

The trouble with adding debt to the mortgage is that
1) interest rates are almost certain to rise (even if you get a decent rate and can fix when you come out of that you will be hit with the rate rises)
2) you may not be accepted given your circumstances
3) most importantly you are turning unsecured debt into secured debt - this means if you default your home is at risk.

RE the quote,

1) yes, rates will hvae to rise at some point, but a cheap fix now might allow the OP to make some inroads in clearing the debt and reducing the amount owed, so when rates do start to rise the total indebtedness will be substantiallly less.
2) Very true - but perhaps worth asking once (as opposed to asking every lender and ruining creit file)
3) ABSOLUTELY TRUE. But still can be a useful way of consolidating debt and avoiding bankruptcy/IVA.

Good luck with this... and get that SOA posted.

smartiedriver_2

SOA is statement of affairs, aka statement of means or assets and liabilities statement.

BAsically you summarise your income and outgoings, thus showing the net position, and do the same with assets and liabilities, showing your net asset position.

This will help other forum users (like me) identify where you could make savings or improvements, and will give us a better understanding of your detailed position, which in turn means we can make better and more relevant suggestions.

pure_dead_dopey

smartiedriver wrote: »

RE the quote,

1) yes, rates will hvae to rise at some point, but a cheap fix now might allow the OP to make some inroads in clearing the debt and reducing the amount owed, so when rates do start to rise the total indebtedness will be substantiallly less.
2) Very true - but perhaps worth asking once (as opposed to asking every lender and ruining creit file)
3) ABSOLUTELY TRUE. But still can be a useful way of consolidating debt and avoiding bankruptcy/IVA.

Good luck with this... and get that SOA posted.

it is never useful to consolidate unsecured debt into secured debt and put your home at risk, specially as your husband seems to have a very low salary. I think the advice has been good, do a SOA and it wouldn't be a bad idea to look at the CCCS debt remedy, just to see if you could afford a DMP. At the moment its unsecured debt, it is not a priority until you are straight with everything else, mortgage, council tax etc. Do you expect your income to rise a lot in the next couple of months? Whatever you do don't jump into something that is not long term substainable. I'm glad you're family are all well now and that just illustrates what is important, unsecured debt certainly comes along way behind your family's health and security.

whatamessbooboo

I'm on the case with the SOA but in response to your helpful posts-
My husbands income is low due to all the time off work. This has risen substantially in the last month or two. My income will definitely increase, to around 45k if I'm full time and my overtime pays £50 per hour.
We are managing the c.c repayments (about £800 and our mortgage) but I calculated that remortgaging would bring our
Payments down substantially ( all be it we would be paying over 12 years).
I genuinely thought given our mortgage is so low, this was a realistic option?