Any way out of this?

-taff

What kind of help did you want?

You are short every month to pay back what you owe but you don't want to ruin your credit rating.
You won't sell a house that could pay off part of your debts.
Your wife can't get a job because she's not capable of geting one? Or she doesn't want to push herself?
You've shorn your monthly spend to the least it can be given the constraints with contracts etc.


There aren't that many other places to go.

Try this
http://www.stepchange.org/Debtremedy.aspx

worriedwilf

Hi


First of all, well done for posting. It's difficult to take the first step.


Like others have said, speak to Stepchange - you can also do a debt remedy task on their website which tells you what is the best course of action.


Based on your post it seems as though you have approx. 45k equity in your home??? I know you won't want this but could you sell up, take the money out, pay off all of your debts and rent for 6 months. You would have some money left from the house even after your debts have been cleared so you could eventually get back on the housing ladder minus the unsecured debt,

theoretica

Have you room in your house to take in a lodger as additional income?

longtermplanner

If your wife can't get a job as she is too ill, then you really do have a crisis.

You can't make these debt repayments. Full stop. Selling the BTL is essential because it will improve your situation, not solve it. That doesn't mean it doesn't have to happen, just get on with it.

Your credit rating is going to be trashed. Stop fretting about it because there is no alternative.

Because your credit rating is going to be spoiled, you may as well default on some of your outstanding commitments: Sky and those mobiles. Just stop paying and they will be added to the list of your other debts to pay off. This is crucial because it will free up money every month which you simply need to live on. Sorry but I don't believe you can live on £80 groceries, no clothes, no medical, no emergency fund for the YEARS it is going to take to clear your debts, this is a disaster waiting to happen.

Then set up a DMP, call Stepchange and they will help. When you sell the BTL the best use of the money may be to pay off the HP/lease on one of the cars and then sell that car then use that money to clear unsecured debt, but you will need to look at the arithmentic on the cars at the time, not now.

With the money from the BTL sale and the drop in costs when you ditch one of the cars, your situation will start to improve and what will have started off as an endless DMP should come back to more manageable levels.

getmeouttahere

Thanks for all the replies. I know it may seem like I'm taking no notice of what some of you are posting but I assure you that isn't the case. I am looking down every avenue where possible.

I have spoken to my mortgage lender for the BTL and I have been informed I will have difficulty selling the rental property because of the tenancy in place. Apparently it's more difficult to sell a house without vacant possession as it limits the market to buy to let investors, so that's a no go for at least another 12 months.

My wifes mother is going to pay the finance on my wifes car until such a point where we can hand it back, so that's £150 a month we don't have to worry about at the moment.

@ -taff - I'm just after support/advice. As I said above, I am listening to everything that's being said. My wife has severe anxiety when meeting new people due to her disability. She would not even get through an interview. Thanks for the link, I'll take a look.

@ worriedwilf - Selling the house is not an option. We're very fortunate to have been able to buy the house in the first place so going backwards is not an option. At the end of the day, if I have to default on every account bar the mortgage, so be it. This may sound completely stupid but hey.

@ theoretica - we have, and that is an option. I will look into this.

@ longtermplanner - Selling the BTL isn't going to happen due to the tenancy agreement in place. It's not essential because while £5k (maximum) will 'improve' the situation, it will not improve the situation significantly and our credit ratings will still be trashed so what's the point in losing what I do have, to still end up with the same end result?

We do and will continue to manage on £80 per month for groceries. If it's chicken burgers/pizzas/chips every night for tea then so be it. I have got plenty of clothes and so has my wife so any new clothes can be bought with birthday/Christmas money.

We are handing back one of the cars in November (when it can be done with no charge).

The finance company for the car want £3500 in order to take the car back which just isn't going to happen. They have said we can sell the car to pay off the finance but that obviously relies on finding a buyer willing to pay the finance company direct for the car. We would then have to find another car which we don't have the money for at the moment.

[Deleted User]

getmeouttahere wrote: »

I have spoken to my mortgage lender for the BTL and I have been informed I will have difficulty selling the rental property because of the tenancy in place.

Any chance you could sell it to the tenant?

getmeouttahere

Bedsit_Bob wrote: »

They don't own the house outright either, yet that is listed as an asset.

Going through the stepchange Debt Remedy form it says do not put items on hire purchase down as assets.

getmeouttahere

Bedsit_Bob wrote: »

Any chance you could sell it to the tenant?

That's an option but I will have to talk to them. It's not an expensive house (£65k value) so depending on whether they have 10% in the bank I guess but will definitely ask. Thanks.

longtermplanner

getmeouttahere wrote: »

@ longtermplanner - Selling the BTL isn't going to happen due to the tenancy agreement in place. It's not essential because while £5k (maximum) will 'improve' the situation, it will not improve the situation significantly and our credit ratings will still be trashed so what's the point in losing what I do have, to still end up with the same end result?

How long is the tenancy agreement?

Sorry but it is essential that you sell this as soon as you can. If the rental is clearly profitable at the moment it may be possible to sell with a tenant. If not, then you need to plan to give notice 2 months before the tenancy ends that you will not be renewing it and start marketing it at that point.

You don't seem to undestand my point that you are in no position to own a BTL that is barely breaking even. Anything going wrong will mean that you can't pay the mortgage as you have no cushion yourself to get you over a few difficult months. Bad tenants, good tenants who fall on hard times, problems with the flat itself, mortgage rise etc.

And 5k may not seem enough to you to matter, but that is because you are not seeing the situation clearly. It will clear a significant amount of your unsecured debt.

You have got yourself into this dire situation partly through bad luck (you wife's health) but mainly because you have made a series of absolutely terrible financial decisions: to do up the house on this extrotionate credit and to have 2 expesive cars. You need to face up to reality and start taking some sensible decisions now.

hollibobs_2

Hello and welcome

My advice like others have said, get in touch with step change sooner rather than later, as in today...

You need help and you need it fast,esp with the shortfall each month...

Good luck