New and in need of help please

alarmed

I really need your help and advice. I’d like to apologise in advance for the long post.
Looking around the forum I think I have finally found my light bulb moment and things cant go on.
I’m a 44year old married father of two and have a debt issue I need to sort out pretty damn quick.
I will fill out my SOA later and it wont make pretty reading but for now I just need some non-judgemental guidance.
Fortunate enough to have a home with a good LTV but my outstanding debt situation just means that I’m existing,not living.I have noticed a change in myself the last couple of weeks and I know its all down to the spiralling financial worry of it all. I constantly feel down knowing that everyone else around me seems to be prospering and I feel like I’m in a daily/weekly/monthly battle to keep a roof above our heads. Only today my son who plays for a local team scored a wonder goal but because my head was somehere else I never registered. I’m also becoming snappy –that’s unlike the normal me.
My total debt comes in at around 17k all on CC’s –these all generally built up when they were on 0% but now the interest has kicked in and there are no more 0% options available. Fortunetly we’re able to pay minimums on all but that’s about it, so no defaults-yet.
The only solace I can find in all this is that the spending was invested in the house to make it the home it is and not on other extravagances.
My wife works P/T but we have researched the possibility of more hours but with childcare costs any more earnings would be cancelled out.
Don’t get me wrong we have cut back a lot but still can’t seem to make ends meet. I wouldn’t even like to entertain the idea of selling up-we’ve worked too hard for this and renting would be more than our mortgage.
So,knowing now that unsecured borrowing is out of the question(affordability)we have an offer of a secured loan which we are considering.We could go down the DMP route and it may still come to that but want to explore other potentials first that might keep our credit rating where it is.
I know from our research here on the forums consolidation is not always the answer but heres what I wanted to put to you for advice on moving forward:
The loan is for 17k at 7% with a repayment of about £220 per month.Our current CC’s all now come in at around 17% and the monthly spend to service them is £515.The plan is to re-invest the savings we would make by paying the loan to overpay our mortgage until such time we can roll the loan into our mortgage. We have approached our mortgage providers and it there is no potential for any additional borrowing which would have been the cheaper option.However,we are due to re-mortgage in December and depending on the rate we may consider rolling all into one at that point if it make financial sense to do so. At least we’ll be putting some of the equity we’ve built up to good use.
Maybe a step backwards at this juncture,not ideal by any means but it may go a long way to getting my life back and learning one hell of a lesson.
So really need advice and feedback on whether in our case consolidation could work.
Pending any advice we are disciplined-which is the key- now to ensure that that we never rack up the debt again and it really is cards and scissors at the ready
Again,really sorry for the long post,thank you for reading and look forward to your advice

elantan

I recently chose to add my debt onto my mortgage, it does go against the advice given here but for us it worked out a more affordable option, we owed £20k on a car and visa ( mainly for our holiday) our payments went from £6-700 per month ( we always paid more than the minimum) to £295 ( or there abouts) this gave us breathing space and took a lot of pressure off of us ( and save us money on the interest as well )

However what we now do is still pay the money only now it is coming off of the mortgage, we can if we need to pay the minimum but we are more determined than ever to become debt free ... This way though our debt is reducing rather than paying more for interest.

You do have to be disciplined and you do have to ensure you don't get back into debt ( well more debt) but yes if you do it right it can and will work

At the end of the day you have to do what is right for you and your family

Good luck

alarmed

Thank you for taking the time to read and respond.
Quite right-discipline is definitely the name of the game.

elantan

What I did was go a few months without using the visa etc to see I I was disciplined enough

Maybe try and see if you can make it till remortgage time ?

I'm also in the process of a 100 month challenge to turn my finances around so this has been keeping me focused ... Well truthfully it's all the little parts that make up the challenge that are keeping me focused ... But the result is the same

Do you think your family can be disciplined enough? Not just you but everyone ...

beanielou

Good advice from el.
You do have to be very sure that you wont run up the debt again.

alarmed

Hi Guys
Just returning back to my diary for a quick update and maybe a bit more guidance.
I had my secured loan papers through and am just bit hesitant about signing and committing to it.I've looked into remortgaging but that will incurr a ERP of around 3.5k-my dilemma is this:
-Do I remortgage to swallow up the debt and pay the 3.5k ERP(see our LTV figs in my OP)-risk here is a new higher rate(our current rate is 2.45)cancelling any benefit in doing this.
-Go the secured route but expect a long term commitment but at lower monthly payments to my CC's now(7.2 APR over 12 years)
-....Or do I look into the DMP route and completely trash my credit rating and potentially ending up with a higher mortgage rate anyway because of it?
Just cant get my head around what I should do for the best

I might just speak to a Stepchange advisor but I really think they will only advice me on the DMP route?


Nothing good about being in debt at all really