Any way out of this?

getmeouttahere

This is my first post here after reading some other threads and I could really use some constructive advice.

My wife and I have been very naive with using credit cards renovate our house and then catalogs to furnish it, etc and now we're really struggling to see a way forward. I want to try to avoid applying for a secured loan to pay off this stuff so any advice would be hugely helpful.

We have some equity in our house (as we bought with a 25% deposit) but we only bought it 4 months ago so would need to wait til we've been there 6 months before we could consider applying for additional borrowing but I'm not sure this would even be possible because my wife is no longer getting a wage (which she was 2 months ago).

Our debts (combined) are as follows:

Capital One CC 1274.83 (34.9% APR)
Vanquis CC 4130.67 (39.9% APR)
Aqua CC 3337.20 (35.9& APR)
Barclaycard CC 390.35 (34.9% APR)
Nationwide CC 2470.00 (interest free)
Littlewoods 2402.90 (interest free)
Very 3446.78 (44.9% APR...but Buy Now Pay Later)
Woolworths 388.22 (39.7% APR)
Jacamo 1438.57 (34.1% APR)
Barclays Loan 2400.00 (4.3% APR)
Car Finance 1(HP) 8100.00 (Settlement figure offered)
Car Finance 2(PCP) 3300.00 (in monthly payments remaining)

Total 33,079.52

My wifes car is the PCP one and her agreement says she can hand the car back at the 18 month point without penalty.

My car is the HP one and my agreement says I can hand the car back at any time but they require the difference between what has been paid and 50% of the loan agreement which as the moment works out at around £3500.

We were previously offered a secured loan of £10,000 but this was at 39.1% APR over 5 years so we turned it down as it would only have reduced our monthly outgoings by around £100.

Monkeyballs

Hi,

Yeah, don't go securing debts accrued for a load of old carp lying around the house...

Give us an SOA and let the fishes of MSE nibble the dead debt skin from your indebted tootsies

http://www.stoozing.com/calculator/soa.php

The stuff from the catalogues, is it too late to send any of it back? I know the stuff might have seemed important when you ordered it but in the cold light of day anything which is a "luxury" can wait for another time

MB of G x

retepetsir

Other than the cars, has all of the other debt been generated in the 4 months since you've moved in? Please don't look down the secured loan option as it is rarely a wise choice.

As already mentioned, post an SOA and we'll go from there.

moxter

Not a dig at you and won't help you I'm afraid but what on earth is the credit rating system for if not to avoid situations like this? Surely credit providers should be able to realise that anyone with £30k of debt at 30%+ APR is unlikely to end up in a good place. But they offer more credit regardless? Did the considerable media attention and heightened regulation we saw a couple of years back achieve nothing? That's not having a go at you by the way.

getmeouttahere

Thanks for your post. Unfortunatley, it is too late to send the stuff back (some of it was curtains and blinds that have been cut to size, etc, and the other stuff was ordered a couple of months ago).

Here's my SOA (note I've put 0 for cars owned because they are technically owned by the finance companies).

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1550
Partners monthly income after tax....... 0
Benefits................................ 86
Other income............................ 0
Total monthly income.................... 1636

Monthly Expense Details
Mortgage................................ 611
Secured/HP loan repayments.............. 372
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 15
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 30
Internet Services....................... 30
Groceries etc. ......................... 80
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 22
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1542


Assets
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 180000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 134000...(611)......2.79
Hire Purchase (HP) debt ...... 8100.....(222)......0<
Hire Purchase (PCP)............3300.....(150)......0
Total secured & HP debts...... 145400....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One CC.................1274.83...42.37.....34.9
Vanquis CC.....................4130.67...190.6.....39.9
Aqua CC........................3337.2....139.4.....35.9
Barclays Loan..................2400......144.3.....4.3
Jacamo.........................1438.57...70.98.....34.1
Woolworths.....................388.22....27.15.....39.7
Very...........................3446.78...101.7.....44.9
Littlewoods....................2402.9....271.5.....0
Nationwide CC..................2470......40........0
Barclaycard CC.................390.35....8.6.......34.9
Total unsecured debts..........21679.52..1036.6....-


Monthly Budget Summary
Total monthly income.................... 1,636
Expenses (including HP & secured debts). 1,542
Available for debt repayments........... 94
Monthly UNsecured debt repayments....... 1,036.6
Amount short for making debt repayments. -942.6

Personal Balance Sheet Summary
Total assets (things you own)........... 180,000
Total HP & Secured debt................. -145,400
Total Unsecured debt.................... -21,679.52
Net Assets.............................. 12,920.48

getmeouttahere

retepetsir wrote: »

Other than the cars, has all of the other debt been generated in the 4 months since you've moved in? Please don't look down the secured loan option as it is rarely a wise choice.

As already mentioned, post an SOA and we'll go from there.

Hi. The credit card debt has mostly been generated in the 4 months, yes, as the house needed a complete new kitchen, and various other bits. The intention was to pay the credit cards off with a further advance from the mortgage lender but this is not looking likely now.

moxter wrote: »

Not a dig at you and won't help you I'm afraid but what on earth is the credit rating system for if not to avoid situations like this? Surely credit providers should be able to realise that anyone with £30k of debt at 30%+ APR is unlikely to end up in a good place. But they offer more credit regardless? Did the considerable media attention and heightened regulation we saw a couple of years back achieve nothing? That's not having a go at you by the way.

I completely agree with you but at the same time, I have no-one to blame but myself. It's not the regulators/credit providers fault that we applied for the credit in the first place.

The problem is even over the past 2 weeks my wife has had letters from two of her credit card companies telling her that her limit is increasing (plus vanquis was due to be increased last month but the card went over its limit which is a blessing in disguise really).

happilymarried2013

Sell stuff on ebay, use the money to pay off some of the higher interest debts. Make sure you have minimum payments set up as direct debits.
Cut the cable programs and your mobile phone bill which is excessive.

Stewart_78

I would think very carefully before converting unsecured debt to secured. I nearly did this a few years ago and shudder to think where I would be now if I had been able to. Probably out on the street to be honest.

You are a grand a month short which pretty means you have screwed up. Not having a go, a lot of us have. You need to have a long talk and think about where you are going. Just paying debt with debt is not going to help unless you have some kind of windfall or wage increase coming very soon. It's just going to get worse.

I wish now that I had thrown up my hands 2 years before I finally did.

Good luck with it and don't feel too bad. It's only money.

getmeouttahere

happilymarried2013 wrote: »

Sell stuff on ebay, use the money to pay off some of the higher interest debts. Make sure you have minimum payments set up as direct debits.
Cut the cable programs and your mobile phone bill which is excessive.

We have sold pretty much all we can do without. Sky and Mobile Phone Bills are all within their minimum contracts unfortunately. Sky have just bumped their price up which may give us a get out clause there but we have no aerial so need some sort of TV package. My wifes contract is up in January so that will be reduced then but doesn't help much now.

getmeouttahere

Stewart_78 wrote: »

I would think very carefully before converting unsecured debt to secured. I nearly did this a few years ago and shudder to think where I would be now if I had been able to. Probably out on the street to be honest.

You are a grand a month short which pretty means you have screwed up. Not having a go, a lot of us have. You need to have a long talk and think about where you are going. Just paying debt with debt is not going to help unless you have some kind of windfall or wage increase coming very soon. It's just going to get worse.

I wish now that I had thrown up my hands 2 years before I finally did.

Good luck with it and don't feel too bad. It's only money.

Thanks, it's a horrible situation to be in and I feel physically sick. My wife knows we're short but I don't want to burden her with all the ins and outs as it's mostly my doing.

The only sort of saving grace is that things like Littlewoods are interest free and while the payments are high, they will reduce very quickly to nothing.

We do have a second house which is currently being rented out but it'd be foolish to sell that as we'd possibly only end up with £5,000 cash and at the moment the rent is covering the mortgage and the current tenants want to stay long term.

d70cw6

Telephone (land line)................... 15
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 30
Internet Services....................... 30
Buildings insurance..................... 22

seems very high