£45000 in debt help please

frogdown

I have over 45k in unsecured debt

16k bank loan @ 9%
12k egg credit card @12%
10k mint credit card@15%
6.5k borrowed from brother to pay bills when i broke a leg and couldnt work.
1100 overdraught

Payments per month
rent 800
loan 294
egg 240
mint 220
child care 500
council tax 180
mobile 20
land line 10
food 80
motoring 200
medical ins 110
utility bills 60
sky 40

I split from my girlfriend about 3 months ago moved into a rented 2 bed house my son stays with me every other week

I am a self employed painter and earn approx 3000 gross per month.
I am responsable for my own tax/ni and am have no money to save for this at the moment. This will become a big problem at tax return time

Our house is worth about 290k outstanding mortgage 160k and my girlfriend has a bussiness loan of 40k secured against it.She has been meeting the mortgage payments since i moved out as I pay all child care

I have been really struggling to meet all my payments on time and have been getting latepayment charges and 35 bank fees for each unmet direct debit/cheque.
I have applied to get a couple of 0% cards to shuffle the debt but no one seems inrterested (history of late payments? new address? )
banckruptcy is not an option because my name is still on our house.

would a secured loan/re mortgage for 50k be a good idea? my debt payments are approx 750 per month ive looked for a few quotes and could pay this back over 12 years for about 500 per month.
The spare 250per month would act as as a buffer as i dont always get paid on time or in full every fortnight and anything left could go towards my tax bill

any ideas?

Thanks in advance

loopy_lass

when this happened to my friend for a similar amount he rented a small room in Aberdeen and went into sequestration... its easier than uk bankruptcy, take a look into it... PM me if you want any more info


hth loops

frogdown

looks like this only applies north of the border im in london but thanks anyway

debtbuster2K5

Hi,
If I am reading your situation correctly, you currently have a mortgage of £160,000 + £40,000 business loan secured against your home, and you are thinking about consolidating to a secured loan/remortgage of £50,000?

In my opinion, not only would this be a bad move, but I dont believe you would be able to get a remortgage based on your earnings. For example.. even at £3k gross earnings per month (£36k per annum) X std mortgage multiplier of say 3.5 times income, that only allows you to borrow £126k, whereas you need, taking into account all of the above £250k. Also you state that you are in rented accomodation. Whose name is the house in? you or your partner? If it is not in your name you would not be able to secure the loan against it.

If you were able to do this, you would have a £250k mortgage/secured loans against a property worth £290k.

- How would you ensure you did not build up the debts again?
- What would happen if you could not work for a period of time? (As before)
- What would happen if interest rates went up/property prices fell?

I am sorry if:
1. I have misread the situation completely
2. Come across as harsh

.... but, doing this could be a massive mistake and you need to be absolutely sure you have considered all the options.
My suggestions would be to have a close look at your outgoings and get them down to the absolute minimum. Sky at £40 per month with the debt you have must go. If this isnt enough, Then seriously think about selling the house, clearing the debts and starting again.

Hope this helps
DB2K5

ukric

From that list I would say

knock sky tv off immediately, a luxury you can't really afford.

Mobile. 20 seems unrealistic when you have a home phone aswell, consider finding a cheeper option and sticking to the tarriff

you'll probably save about 45 quid just from those two pm.

Have a read around the ways other people have saved money on this board.

If you've split from your partner I'm not sure another loan secured on a joint asset might be the best idea, but probably get some more advice from other people on here.

Solac

get rid of sky
get a cheaper mobile solution
and if u feel ureself spending money and u cant help ureself tear up those cards

Debt_Free_Chick

Frogdown

I would be very uncomfortable about your ex's loan - it's secured on the house YOU live in. So if she gets into difficulty with that loan, you could lose your property!

I would get her to rearrange that loan ASAP

jen_jen_2

do you earn £3000 approx a month so this is all yours for all your bills etc or is £3000 the turnover, so you need to take out business expenses, tax etc.

I would suggest the first thing you do is seperate the business from the "wage" and then you will be able to set aside your tax and NI this is an essential business expense and you should not take that money for your other debts and then when you know how much you can pay yourself you can see what options are available to you.

The other thing £180 council tax on a two bed flat or is this for the house too? have you and your ex told the council you are now single people as there is a 25% discount if you are the only over 18yr old in the property.