Secured loan? To be or not to be?

MrsHappyOneDay

Hi there
Im hoping someone can shed some light on the best way forward for my husband and i.
I wont bore you with the details but in a nutshell....
I have debt of £4k and my husband has £25k - including a CCJ.
Our house is in my husbands name (it was his before i met him). At present he is self employed and i am employed full time.
The debt - especially his, is making us both ill so we think the only way out is a secured loan. Because my husbands earnings (hopefully this will change next year) are so low the loan companies will only take into account my salary - but we can borrow the £30k needed to clear all the debt. Sorry im waffling....
My question is - is this the right thing to do? I will go from having £4k of debt - including defaults to a credit file will all settled accounts but a whopping £30k loan. Help!!

~Beanie~

Can you actually get a loan in your name that is secured on someone else's house? I wouldn't have thought so?

Apart from this, my opinion is that it is not the right thing to do at all. What if anything ever happened to your husband or you split up? You would be lumbered with all his debt.

MrsHappyOneDay

Im looking more for advice on what to do....I certainly dont think (naive maybe) that my husband and i will split up. If we did i guess would sell the house (we have children together) and even with this secured loan there would be equity in the house. This is about our future

ilovelondontown

**Putting a side the fact that I REALLY discourage ANYONE to get a loan for that size in their name for a partner (I wouldn't do it for my own husband)**

I appreciate there is something psychologically soothing about colsolidating debt - you feel like you've got to make one payment to one creditor and you are liberated from the worries you have. Unfortuately most people who are looking to get a loan to blanket cover their debt are the people most unsuitable for this option.

Chances are you're in this debt from a habit of spending beyond your means, before you even consider a loan you need to question if you can work out how to stop spending beyond your means, otherwise you'll only end up with a consolidation loan and more pots of debt as time goes on and you keep going that way.

The best thing you can do a the moment is look at where you can make savings, shift debt to 0% credit cards and chip away at it the old fashioned hard way. The end result will be more rewarding and you'll find yourself learnign lessons that'll stop this happening again.

Finally since your husband already has a CCJ to his name I would encourage you to speak to a debt charity - like stepchange - to get some professional support on making your first move from here.

MrsHappyOneDay

Sorry i should have said - yes the debt is in his name but its all debt he has amounted since being with me so i feel just as liable. The loan will be in joint names, Maybe i didnt word the question correctly......maybe i should have asked what others would do? Rebuilding our credit files and living a normal life is our objective.

This debt came about - not totally because we spent beyond our means - the company my husband worked for went bust after not paying him for 6 months. This is a whole other issue (we are going through the courts to get salary payments back).

ilovelondontown

MrsHappyOneDay wrote: »

Sorry i should have said - yes the debt is in his name but its all debt he has amounted since being with me so i feel just as liable. The loan will be in joint names, Maybe i didnt word the question correctly......maybe i should have asked what others would do? Rebuilding our credit files and living a normal life is our objective.

This debt came about - not totally because we spent beyond our means - the company my husband worked for went bust after not paying him for 6 months. This is a whole other issue (we are going through the courts to get salary payments back).

Honestly MrsHappyOneDay- What I said above is what I am doing.

I had £12K of debt and my husband somewhere around £14K of debt and we've been chipping away at it little by little.

It's understandable that you want to find a way out as quick as you can but that sort of debt doesn't just disappear over night.

MrsHappyOneDay

I totally see what your saying.....i kinda feel i have to justify our situation....
We had a joint income of over £100k.....we now have an income of £40k - thats where the debt came from. When we had a higher income the debt didnt feel like debt (wrong i know and we have stopped spending believe me, got rid of Sky, sold our 2nd car etc, went camping instead of aborad etc it may not seem it but we really are trying.). Our current mortgage is so low (the one thing we did do when we had money was pay that off as much as possible) that the obvious solution is to "chuck" this debt onto the house.
Its interesting to see that noone thinks this is the right thing to do. Back to the drawing board maybe!

sistafromanothermista

This will be a harsh post i'm afraid...

40k?? poor you....:(:(
There are plenty of people on here with much less joint income but higher debts paying it off by CUTTING back. Down to the last penny!
I would try this first.

ilovelondontown

MrsHappyOneDay wrote: »

I totally see what your saying.....i kinda feel i have to justify our situation....
We had a joint income of over £100k.....we now have an income of £40k - thats where the debt came from. When we had a higher income the debt didnt feel like debt (wrong i know and we have stopped spending believe me, got rid of Sky, sold our 2nd car etc, went camping instead of aborad etc it may not seem it but we really are trying.). Our current mortgage is so low (the one thing we did do when we had money was pay that off as much as possible) that the obvious solution is to "chuck" this debt onto the house.
Its interesting to see that noone thinks this is the right thing to do. Back to the drawing board maybe!

You don't have to justify anything to us we don't judge around here but what you must realise is that there is no quick solution to this but the good news is there are PLENTY of long term solutions that will stop you feeling at the mercy to your debt.

I don't mean to be rude but when you're looking to take out a loan to the tune of nearly your entire income, I beg you not to, what if you lose your job? Setting against your house is really not a stable option for you right now.

Here's an idea of where to start so you don't feel like I've given you a load of "no's" and no solution

1) Post a Statement of Affairs (SOA) and the good people of the board can help you work out where else to cut back -they've done it for me!
2) Get the exact figures of what you owe to who and at what APR. The try snowballing them to see the best way to pay it back.
3) Get on the stepchange website and see if they can help.
4) Most people (including myself) come to the boards for a quick fix and when they realise that there isn't one, they feel a bit disheartend. The ones who are willing to listen stick around and find themselves on quite a journey of discovery, I hope you do stick around to see it's not all dark as it seems.

[Deleted User]

I have to agree with sista, you should make good inroads on your debt with 40K income.

MrsHappyOneDay

sistafromanothermista wrote: »

This will be a harsh post i'm afraid...

40k?? poor you....:(:(
There are plenty of people on here with much less joint income but higher debts paying it off by CUTTING back. Down to the last penny!
I would try this first.

Really helpful thanks! Believe me we have cut back - this post was about advice regarding secured loans - not a judgement on the fact that ive been honest about my salary and the problems we have gotten into. Im also not looking for sympathy - i would however be interested in how you have coped with an over 50% drop in income? Again, thats not being rude but when you are promised salary payments month after month and they dont appear life can be tricky.