Finally facing up to the Finances in 2015

laurasavon

I've finally faced up to the fact that I can't afford to keep up with all of my monthly payments and have arranged a plan with Step Change. The plan doesn't include secured payments so I am looking to try and clear those first to then pay more to the companies on my DMP.

SO what do I owe? Look away if you don't like big numbers

Mortgages:
1 - £105,511
2 - £55,983
3 - £71,125

Secured debts:
Car 1 - £9,000
Car 2 - £9,000
House builder SE £15,000

Debts covered by Step Change plan:
Capital One CC £1,000
Fly Be CC £3,000
Marks & Spencer CC £5,000
Halifax CC £7,000
First Direct Overdraft £2,000
Halifax Overdraft £5,000
Lloyds Overdraft £8,000
First Direct Loan £10,000

So debts totalling over £306k! :eek:


So how did I get myself into this mess? :mad:

I was happily overpaying the mortgage on house number 1 and clearing the debts my (now-ex) husband and I had gained when we decided to seperate.

Ex-hubby decided he wanted to stay in the house, and refused to leave! So I purchased property number 2 to live in. Unfortunately ex-hubby wasn't earning a lot so I was having to cover the mortgage on two properties for several months until he moved his new partner in - hence building up the Overdrafts and Credit Cards.

I was then approached by family to buy a house and rent it back to them, thus giving mortgage number three and a bit more debt to cover legal fees etc. in hindsight I probably should never have purchased this but hopefully in the future it will be a worthwhile investment.

Following my separation from ex-hubby I met a manipulative and controlling man who again contributed to some of the debt as he had no income of his own, he also talked me into signing for the two car loans (I already had a car 2 years old with no finance so I really didn't need to get into debt for a car and I don't know what I was thinking at the time but what's done is done). This relationship didn't last very long at all and I'm lucky to be out of it.

Moving on I met my current partner, who's work was on a zero hours contract but we decided to move in together (he was totally debt free) and he helped contribute towards the bills. All was going well until ex-hubby and his new girlfriend decided to move from house number 1 leaving me with another mortgage to pay.

We decided to move back to house number 1 as we now had a little boy and the schools are much better here so property 2 was rented out as well as property 3.

My OH's zero hours contract in some weeks this year has been 5 hours work and I am on Maternity Leave still to look after our little boy so finances have been very tight. Unfortunately there was a leak in property 3 and the tenants refused to pay their rent, I suggested they used the rent to carry out the repairs which they refused and they have been awkward in letting any plumbers into the property, to a point they are now £2,500 in rent arrears! This has got me to breaking point so I had no option but to bite the bullet and seek the help of Step Change who I am currently paying £8 per month to. I am also seeking legal advice to gain possession of property number 3 and gain some of the rent back and hopefully some nice new tenants.

My other half in the last few weeks has secured a full time job :j so we have seen a significant increase in his income and I'm back at work full time from 5th Jan so I'm finally seeing light at the end of the tunnel instead of burying my head in the sand. :beer:

So the plan is to increase the Step Change payment to £40 per month and re-assess once I've had a payslip and I'm certain of my income after tax.
We will be able to maintain the car payments and hopefully make any over payments there as the interest is rediculous and these pay,nets amount to £700 a month so clearing these will really let me tackle the rest of the debts.
I have a share save scheme through work which I think has 18 months to run but this should clear the Shared Equity loan to the house builder - this and the car loans account for £33k of the debt so I think I will feel better once they are out the way. And will then be in a position to possibly sell the cars to release more funds.

Thank you for reading if any of you have made it to the end!

AleMrsT

Hi Laura. I have subscribed.
Good luck on your journey, sounds like you now have a good supportive man by your side, and this forum is an amazing place for help and support, so you'll be well on your way to clearing the debts.

Incidentally, I work in the lettings industry, do you rent the houses through an agency or deal with them privately? Not sure how far you've got with the PITA (acronym we use at work A LOT) tenants and the lack of rent from them in house 3, but if you need any help or advice, please message me and I'll try and help as best as I can.

abba1772

It's scary seeing it all in black and white but well done on the taking the first step in noting it down xx

laurasavon

AleMrsT wrote: »

Hi Laura. I have subscribed.
Good luck on your journey, sounds like you now have a good supportive man by your side, and this forum is an amazing place for help and support, so you'll be well on your way to clearing the debts.

Incidentally, I work in the lettings industry, do you rent the houses through an agency or deal with them privately? Not sure how far you've got with the PITA (acronym we use at work A LOT) tenants and the lack of rent from them in house 3, but if you need any help or advice, please message me and I'll try and help as best as I can.

Thank you, he's supportive although he's not ask keen on being frugal, but I can't expect him to be when its not his debt.

I have property number 2 through an agency now, initially it wasn't but I have decided to with the new tenant I have in there given the problems with property 3.

Unfortunately, property 3, the one with family in I didn't expect to be in the position that I am so I'm on my own :-(

Historybuff

Well done for facing up, laurasavon. I'll subscribe. Hopefully, you will get loads of support on here to help you stay on track. All the best. X

laurasavon

Thanks all for your support and Merry Christmas

enjoyyourshoes

could any of the 'spare' houses be sold to release any equity there might be to use against debts?


Any other assets that you could sell ?

laurasavon

enjoyyourshoes wrote: »

could any of the 'spare' houses be sold to release any equity there might be to use against debts?


Any other assets that you could sell ?

I suppose they could if I had to but there probably wouldn't be much equity as I've only owned them a few years and the hassle involved I would prefer to keep them as a retirement investment (although a lot could happen between now and me retiring!)

laurasavon

Hope everyone had a lovely Chrismas :beer:

We had a nice quiet one at home, I prefer this to going here there and everywhere and certainly easier than having to take a one year old out

debtfreeoneday

Well done for writing it all out.. glad you have a nice man now and he is supportive.. x

laurasavon

I've just calculated that if I pay £175 a week towards one of the car loans it will be cleared in just over a year

For the other car loan and the house builder shared equity loan I am currently paying in £250 a month to my employers share save scheme which I think has about 18 months left to run so I'm hoping this will clear the loan and a good chunk of the second car

I am an Avon rep as well as working full time and I plan to put my Avon commission into a seperate account to pay for annual expenses such as car insurance, tax, mot, tv license, Christmas and any emergencies

So by mid-2016 I should have hopefully cleared both car loans and the shared equity loan and can begin to really hit the payments to step change - if I can pay them £1,000 each month it will take me 41 months from mid-2016 so hopefully debt free by the end of 2020 apart from the mortgages

Quite depressing that it's going to take 5 years with no luxuries to get all of this paid off