Newbie needs some help and advice - debt problems

Loadzadebt

Hi there,

Only just registered on here today after deciding that this week I need to make some serious decisions about my future. I am 32 years old and married with a 13 year old son. I live in a 2 bedroomed semi detached house that is currently mortgaged. This may be a long post.

I have struggled with debt for many years. I am now at the stage where my credit rating is shot to pieces and that my house is in danger of getting reposessed.

Let me outline my problems so you know where I am coming from:-

I have worked for my current employer for about three months (previously with them for nearly 3 years). I foolishly changed jobs for six months last year and because I am in sales this meant my new role was a basic salary only for a few months this meant I got behind with my mortgage and a secured loan. I realised this would be a problem so managed to get my old job back with a promotion and pay rise.

Debt - what do I owe ?

Mortgage: - Current balance £57,000. Monthly payment £629.00 this is currently 2 1/2 months in arrears. The mortgage company have agreed to me making increased payments to repay the arrears providing they can get a suspended possesion order from the court. I have agreed to pay them approx £800 per month.

Secured Loan: - Current balance £55,000. Monthly payment £618.00 this is currently 3 months in arrears. The loan company have threatened litigation but as yet have not taken any further action. I am unable to pay them anything until my next payday (early May).

The house I am in is worth around £135,000. It would sell easily as it is in a superb area. I bought it 14 years ago for £44,500 and have been forced to remortgage and take the secured loan to consolidate all of the debt I have got myself into over the last few years.

I also have various other debts as follows: -

Catalogue £750
Catalogue £500
Catalogue £100
Council Tax £1000
Old HP £400
Car HP £10000
Old Loan (from when I was self employed 7 years ago) £9000
plus various other small debts.

I am currently bringing home around £1500.00 per month. My wife earns around £140.00 per week but this goes on the food shopping and small weekly bills.
If I make the promised payment on my mortgage and just a normal payment on the secured loan I am left with less than £100 per month to pay all the other bills.

What can I do ?

I am seriously considering selling our house. I would be able to get £135,000 for it, I could then pay off my mortgage and secured loan and be left with around £20,000. I know this is not a lot but it would enable me to put a bit in the bank. All of the other small debts are not at the serious stage and I could afford to pay them each month if it was not for the two big debts that I have.

I could then rent somewhere. I would be able to get a three bedroom detached house for around £600 - £650 per month and although it would be rented and not bought at least we would be able to live each month.

What do you guys think ?

Regards

T.

Snaggles

Hi Loadzadebt, welcome to Debt Free Wannabe.

If you pop your SOA (statement of affairs - see this thread for a template) up, we can have a look at it and see if we can offer any help at all.

Do you know the APRs of your various debts?

Another thing that is usually suggested if you are struggling to meet your monthly commitments is to speak to either CCCS or Payplan (stay away from the fee charging debt management companies) who are both charitable organisations I believe and who are highly regarded on here. They will be able to give you impartial advice. Or alternatively I believe Citizens Advice Bureau are able to give debt advice too.

Are either you or your wife able to increase your income at all, by increasing hours/overtime/2nd job etc?

jcr16

i can't really offer any advice. but big ((((((hugs))))) to u for posting. and i'm sure someone will be on soon who can offer u some good advice

chevalier

Other than also suggest an SOA as another posted suggested, I have two other questions
1) Does your wife know about your debts, and therefore is supporting you in your quest to pay them off
2) have you addressed the reasons why you have overspent so much? If you haven't then this needs to be done as well as cutting back
best of luck
chev

Loadzadebt

Hi there,

I will complete the SOA tomorrow as soon as I can get the full details.

In answer to the questions from chevalier.

1) Yes she has full knowledge of all of the debt we are in. Some of it is in her name.

2) Yes we addressed the reasons we overspent I wish it was to many holidays and luxurys but most of it has been down to changes in employment and a period when I was self employed and didn't earn anywhere near enough. We looked at any overspending a few years ago and since then we haven't had much at all really. Spent the past four weekends sat at home as we don't have any money to go out anywhere.

Regards

Tim

Loadzadebt

Snaggles wrote: »

Are either you or your wife able to increase your income at all, by increasing hours/overtime/2nd job etc?

Hi there,

My job is salaried and I have only recently secured a pay rise. I work long hours 8am - 7pm so am not able to earn anymore.
My wife does as much overtime as her employer gives her but this is not normally that much.

Regards

Tim

lynzpower

hi tim :wave:

Sit down with your wife and do an SOA, and lets see if theres anything we can help with. Even if you do decide to sell you are looking at a period of 4 months MIN till you can get the money, and it would be a good idea to have a contingency in place.

janiegs

Your mortgage seems high....we have a mortgage of £99,000 that costs us £616 a month....

GirlRacer_2

janiegs wrote: »

Your mortgage seems high....we have a mortgage of £99,000 that costs us £616 a month....

I picked up on the mortgage repayment also. My mortgage is for £73,500 and my payment is £465. Is your mortgage being paid over a short term?

wannasavemoney

Who is your mortgage with? If it is with Woolwich (who are now barclays), I managed to change the mortgage option witht the same lender at no cost for a new lower rate. Would you be able to do this?

purplejoxxx

Maybe change the mortagage type or get it over a longer period?? justa suggestion.