Husband has got us into unmanageable debt

SPELLKASTER

If any of your credit agreements are before April 2007, please read this:-

To stop any confusion and have a readily available check list for Consumer Credit Agreements BEFORE 2007, here are the requirements for such agreements - if one of the requirements is missing, then the agreement is unenforceable. In no particular order:

* The Agreement must contain a Credit Limit, or a reference that the Credit Limit will be set at a later date, or a statement that no Credit Limit is required.

* The Agreement must declare the APR% rate, monthly and/or annually.

* The Agreement must contain a date/or indication of a date such as weekly, monthly or annually, for payments to be made, or state a date will be decided upon later, or that monthly statements will be provided to show the date of required payment.

* The Agreement must contain a notice of your right to cancellation - usually 14 days from the date signed.

* The Agreement must contain ALL Terms & Conditions, each page signed or initialled by the debtor.

* The agreement must be legible, and the type face distinguishable from the background colour.

* The Agreement must be signed by both parties - Debtor and Creditor/or their representative and dated.

* Any copy of the Agreement lawfully requested by the debtor under section 78 of the Consumer Credit Act 1974, must be a valid and true Certified Copy of the Original Agreement - in this instance, reconstituted agreements are not valid, true copies and unacceptable.

* ALL of the above, must be contained within a single, signed document and parts may not be sent separately, or issued under separate cover.

If any of the above is not included, or if the Agreement is not legible, then the Agreement is unenforceable at law.

HappyMJ

SPELLKASTER wrote: »

I certainly would advise against doing an IVA.

This would damage your credit file.

Also IVA's are expensive, I paid into one for 3 years, and having paid £2790 into it, only £158 was sent across to my debts.

Are any of your debts before April 2007!?

The reason I ask is a lot of credit agreements before that date might be missing prescribed terms and would be deemed unenforceable.

I have 2 debts which are unenforceable due to this and both lenders are aware.

Anything they do is going to damage their credit files. They cannot pay their minimum payments for the next 6 months without borrowing from one card to pay another which is a terrible cycle to get into. I manage to do that but it's very difficult to keep track of.

Going into a DMP usually means all or at least most debts default. That's very damaging and re-mortgaging then becomes very difficult. They're paying quite a high 4.99% APR on the mortgage. They're paying over £500 per month (mortgage payment plus buildings and contents insurance plus emergency fund) for a property that is worth half the one I'm in now and I pay £475 a month in rent. Life insurance at such high levels would also no longer be required as all the debts would have been repaid.

Even if a debt is unenforceable it still appears on a credit search. Not paying an unenforceable debt will lead to arrears markers being shown which can also be quite damaging.

National_Debtline

Hi Sam


Thanks for posting and sharing your situation.


I think it is worth stressing that you should not rush into any particular course of action, especially nothing as binding as an IVA. You have recently had a nasty surprise with the discovery of the extra debt, and you should first of all make absolutely sure that you know the full extent of whatever is owed - checking your credit reports if necessary.


You don't refer to being overdrawn, but based on the above SoA it appears that you will go into the red very soon unless you borrow even more. So, I would advise you to contact all of your creditors and ask for 30 days' breathing space while you collect your thoughts and make some plans. You may also need to open a new "basic" bank account if charges have already begun to pile up on your existing account.


I would use those 30 days to assess where you can make savings in your budget and to seek free advice from one of the debt charities. This is a letter you can use:


https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx


You also ask whether you should be tackling these issues jointly. My personal opinion here is that as a couple, realistically it would be hard for the two of you to deal with your individual debts separately as your finances are so intertwined, and you need to work together for a common goal.


Dennis
@natdebtline

Scotslass1974

Thanks for all taking the time to read my post and reply.

HappyMJ - it would make sense to keep the house - rents around here are a little higher than our mortgage, our house is in a state and may not be worth that much anyway, it's in a great position for work, transport (we don't drive) and family and we have two young children.

Laura @ NDL - some good points, I'll definitely consider these (the transport costs are fine as our incomes are given after season ticket loan deductions ). I've worked with DMPs and IVAs in the past but it's hard to see from the inside! The money from family would be offered as a lump sum settlement of the IVA, not a gift to me or hubby regardless.

M2m - I was hoping we'd be able to last until my salary goes back up but there's no way we can cover those amounts for that long - of course the irony is that my salary goes back up by about £400 in Sept but as we will have defaulted by then, I'll have lost the 0% interest rates and therefore won't be able to cover the minimum payments anyway as they will increase... So frustrating! Such bad timing too - I can barely do the housework and cook any meals at all with my baby, let alone plan really well in order to make significant cuts - I normally do much better with the food but getting through the day with everyone alive feels like an acheivement at the moment. I'm going to have another look at it though just in case.

SPELLKASTER - none of my debts are pre-2007 and to be honest I wouldn't go down the unenforceable route anyway as they would still be there and it would bother me (a lot). Plus I do want to be able to pay the debts as much as possible. Thanks though, some excellent information there.

Dennis @ NDL - you're absolutely right, from next month we can't cover the repayments. I'm going to have a last-ditch attempt at fiddling the budget to free up some more cash, but if not then I will definitely do as you suggest.

ERICS_MUM

You mentioned in your opening post that you both reduced your working hours to give yourselves more family time. Could your husband increase his hours now to bring in extra money?

Good luck, you sound very sensible and I do hope you can both come through this horrid situation unscathed.

EM x

Puddylove

I'm really sorry your husband has let you down...I had an ex who did that. Turned out he lied about everything not just money.

The problem is that he will keep accessing available credit until he can't get any more - and by then your family will be worse off.

Can he work FT and perhaps even overtime to pay off his debts? That would solve the debt problem, but also show some sort of commitment and contrition for letting you down.

It can be done - I work FT but also an extra 35 or so hours a week, and I am still alive.

I sincerely hope things work out for you.

lessonlearned

A shortfall of £327.....

You need to have a moratorium on all non essential spending until you go back to work at the end of September - it's only around 5 months so although you need to drastically reduce spending, it won't be for too long.

I can find you £445 which should cover the shortfall and give you around £120 a month wriggle room, to either put towards debt reduction or spend on any unforeseen necessary items such as children's shoes or clothes etc if they have a growth spurt or a basic hair cut for you or your husband.

You need to cut out the following.......

Hairdressing - £35
Entertainment - £40
Holiday - £50
Emergency fund - £40 - sorry but the emergency is NOW
CLothes - £75
Presents - £30
CAble - £25

I make that £295

Then get your food budget down to £250. This would give you another £150, bringing you up to £445.

Yes I know it's tight and probably not a great deal of fun but it's only a short term thing. Once you are working again you can review it and relax a little.

One thing - your water bill seems high.......are you on a meter. If not you can trial one for a year and see how it works for you.

Also you are paying a lot on communications, ie £65 mobile, Internet, and landline. Can you rejig things. (Plus that £25 on cable)

Are you and your husband still working within the financial sector. If you are you cannot do a DMP or IVA because you will run the risk of losing your jobs.

Can you husbAnd increase his hours, at least until you go back to work.

I know the above cutbacks sound drastic but your situation calls for drastic measures, but as I have pointed out it's only for around 5 or 6 months until you go back to work and get your first pay packet. Try to think of it as a challenge.

Have a look on the old style boards. You will get lots of tips, ideas and support to help you reduce your grocery bill and find ways to cut back on spending. If. You don't do it already shop at the discounters, Lidl, Aldi, Farmfoods, B&M, local markets.

Luckily summer is just round the corner so lots of cheap and free entertainment with the children, trips to the park, picnics etc. Don't forget to make full use of your library, art galleries and museums.

For a cheap holiday look at the Sun Holiday vouchers. We used to do these two or three times a year. They are fantastic value. Also look at vouchers, discounts, Tesco or nectar points for cheap days out.

If you really need clothes over the next few Months then try charity shops.

£35 a month on hairdressing is a lot of money - money that you just don't have at the moment. Do you have a local beauty/hairdressing school.

Can you make a bit of money selling unwanted stuff. I once made £1100 just clearing out my loft.

It's going to be a challenge but you can ride this out if you put your mind to it. It's about finding the right mindset. There are lots of frugal living websites to give you ideas. I recommend Mr Money Moustache, it's a Canadian website but the basic principles still apply here in the UK.

One thing I have not mentioned is your husband running up debts. You are going to have to get to the bottom of this and find out what went wrong because you will really need to work together if you are going to dig your way out the hole you now find yourself in.

Don't despair - you can get out of this mess, but it will take time and effort. Try to treat it as a bit of a game, set yourself interim goals and little challenges to keep you motivated.

Good luck and keep posting.

Scotslass1974

ERICS MUM and Puddylove - thank you for your comments. We did consider a return to full time work but we'd lose much more than we gained (and overtime is not available except very occasionally).

And as for available credit - he's already hit that wall!

Scotslass1974

lessonlearned - thanks for all that! Funnily enough, in the middle of the night before I read your post I'd already said to my husband that I'd changed my mind and wanted to see if we could make all the payments. I'm going to play with the budget and see what other cutbacks we can make. Some stuff is under new contracts - when I knew about some, but unfortunately not all, of the debt, for example, I switched us from Sky to BT, which has saved us some money but as it turns out we needed more.

Will be back later!

Scotslass1974

I don't know if I'm kidding myself though because the interest free periods are almost all over by the end of the year and because he's got us where we can't get any further credit we may not be able to make all the minimum payments once they end. And even if we can it's going to be decades to pay them all with interest.

Aaaaaaaaaargh! Why is it so complicated? If we're going to end up unable to pay the debts then I don't want to make us all (more) miserable dragging it out a few more months...