Debt advice required please

Dipwotsit

Hi there, I am new to the forum this is my first post so here goes.

I am currently £8k in debt with credit cards and have a loan which I pay approx £250 a month on which has around 4 years to go.

In 5 years I will have come to the end of my mortgage which is very small - I took out an endowment policy at the time. My house is shared ownership and was only £30k when I bought it. My mortgate is £13775.

I had to use the policy I had with Friends Provident (which was destined to underpay anyhow) 2 years ago as I got part way to doing an IVA but when it was found that my policy was not linked directly to my mortgage, I had to use the money to pay off my debt at the time.

I swore then I would not get into debt but I have. So cross with myself but there you go I need to sort this now.

I am not sure what would happen if I didn't have the money to pay off my mortgage and couldn't raise it.

I am fed up of all of my wages being spent on debts and therefore I am in that spiral of putting things on my credit card if I need them. It's scary.

I am thinking to look into an IVA again.

Any advice would be gratefully received.
Thanks for reading

Tixy

Hi and welcome
An IVA for £8k of debt is quite a drastic option, I'd look at alternatives first.

Will all your debts be paid off in 4years, or is that just the loan? Have you worked out how long it will take to clear the cards at the current rate of repayment?

As a starting point I'd suggest working out a statement of affairs of your income & expenditure before debt repayments, and then see how much you have left for debt repayments each month, and how far short you are.
If you post a statement of affairs on here people should be able to advise on options and make suggestions as to how you may be able to tackle your debts http://www.stoozing.com/calculator/soa.php

Once you have a plan for the unsecured debts then you can then consider your options for your mortgage shortfall.

enthusiasticsaver

If you do not have a means of paying off your mortgage in four years time you need to change it to a repayment mortgage so the capital sum starts reducing. Is it on interest only at the moment?


Doing an IVA on a £8000 credit card debt sounds a bit drastic but it all depends on your age, earning capacity and income/expenditure. As already suggested post an soa and give details of the credit cards and interest rates etc. Can you move them on to 0% interest cards? How close are you to retirement?


As you have been in debt problems in the past this suggests an underlying problems - either low income or overspending so it is crucial you get to grips with this while the debt is still relatively low. Was the loan taken out to consolidate debt also? This only works when you cut up the credit cards afterwards.


If you are having to use your credit card for living expenses then some action is needed and an IVA or DMP could be an option. My suggestions are


1 post an soa on this forum so people can suggest ways of reducing expenditure without debt restructuring.
2 If your credit record is ok then move credit cards to 0% so you are not paying interest on it.
3 See if you can come to an agreement with your loan provider to either increase the term to reduce your payments or freeze the interest.
4 Address the problem of your mortgage by checking if your provider will increase the term and change to repayment if you have no repayment vehicle (presumably it was the cashed in FP endowment?). Whether they will do this will depend on your age. Some mortgage providers will not let you go past 70 now.


Good luck.

Dipwotsit

Hi thanks for the replies.

Yes I am paying interest only on the mortgage.

The endowment was a Friends Provident policy that I had to cash in.

I will do the SOA and will look into transferring my cc's to a 0% deal and also contact my mortgage lender to see about a repayment mortgage.

Thank you