Stuck in a mire

Matt_Pryer

No easy way out of this one. Taken 11k pay cut to have a job better suited to family needs (two young children, wife now disabled from brain tumour but still working!). Took a £177000 'Together Mortgage' with Northern Rock 10 years ago (wife had 54k of secret debt, when she owned up the only way for her not to bankrupt or us lose the house was to re-mortgage). Now owe £147K (4.79 Northern Rock variable) to Northern Rock on house after 10 years in negative equity. House is now worth a little less than what we owe. Working towards re-mortgage in future- probably about 5 more years time- need to get other debts into order. Wife has been good (totally credit free) since 2004 due to the problems although the mortgage is joint. It's been a long 10 years in negative equity but the above shows that a person can slowly climb out if patient enough.
Might seem stupid that I do have other debts....however life is complicated and we have 2 kids.
Unsecured debt (all in my name) continually hover around 25K mark. Total income 60k joint.
Barclays Overdraft- £6925 (yes, this now costs us 1K a year)
Barclaycard- £12500 (13K limit)- got most on cheap transfer rate now- total interest is approx. £60 per month
Personal Loan- £6000 outstanding (could sell my 11 Reg car but need it for work and family commitments- wife is disabled)
MBNA- £2500 (£7000 limit)- mainly holiday costs from last year or so (wife deserved this- she could have died)


Any painful advice for a wannabe (eventually) debt free recruit?
(would never consider a DMP or alternative)


Biggest worry is the 'new' overdraft fees- that's 90 or 100 £ down the pan every month before we've even started.
Overall biggest struggle is that as soon as I pay money off debt I end up borrowing back- hence only debt I ever make progress with is the mortgage....eek!


Both aged 42 with kids 11 and 7

ellesbellesxxx

Hi
First of all, you have come to the right place... what many would advise is filling in a SOA (Statement of Affairs)
http://www.stoozing.com/calculator/soa.php
format for mse. Then if you would like to share it, people can give you a more balanced view - without allthe facts about income/expenditure it's hard to give the right advice.

hohum

You've been through some tough times!

It sounds like your income is not matching your expenses - hence why you keep borrowing after paying back debt.

I'd agree, post an SOA and have a look at where you can possibly get things more balanced.

That Barclays overdraft is painful. Any chance you can do a balance transfer to either of the cards on any of the balance? Does the cost come down with a smaller balance or is it charge per day no matter what the balance is?

I know you've said you don't want to do DMP but depending on SOA you could be paying a lot of interest for a very long time to get yourselves out of this. Partly I wonder if it's worth defaulting on the overdraft and just paying normal interest and charges on it, which surely would be less than their daily rate.

Have you put the debt amounts and APR into a debt snowball calculator? Does focus the mind rather in terms of how much you will pay for how long. You can play around with how you distribute the money you have available to repay, to see how you can affect how quickly you pay the debt back http://www.whatsthecost.com/snowball.aspx

I'd do an SOA first, which can take some time if you're not logging spending regularly but is worth doing first to start seeing what your options are.