Desperately Need Help/Advice

jonesie01

National_Debtline wrote: »

Your general living costs don’t strike me as being particularly high for two adults, apart from your mortgage taking up a big chunk of your income as andydownes says.

If your partner isn’t able to get some income soon it looks like you may need to go down the debt management route. Bear in mind that making reduced payments on debts will mean you default, which will have a negative impact on credit applications for 6 years.

If you started a free DMP and interest was frozen you could clear your total unsecured debt in around 8 years based on this budget. Give us a call on 0808 808 4000 though, as an adviser will be able to discuss everything in detail with you.

James
@natdebtline

Thank you so much James, I'll call the number. Sorry to ask a dumb question though but you said that it would have a negative impact on credit applications for 6 years, what does that mean? Sorry I know it's a dumb question

jonesie01

MrsTinks wrote: »

Your partner needs to make sure they have explored every option for benefits or work that is available. If mental health prevents them from working then could they be eligible for any support based on this?

We've looked into this and because of the amount I earn aren't eligible for benefits.

MrsTinks wrote: »

The car... OK you may need to tell us WHY this can't be sold. Who owns it, what's the story? You don't have to tell us, but it really will help us advise you in the best direction. If it's not in your name then it wouldn't necessarily be considered an asset in certain circumstances, but likewise it would also be classed as an unnecessary expense more likely.

The car is in my partners name and the bills for it are all covered. Without a car and the freedom it brings their illness gets worse and darker. I know that's not much help but I'd rather not go into too may details if you don't mind.

MrsTinks wrote: »

Property - again this should be your priority right now. You need to keep a roof over your head. DO not let this or council tax lapse.

At the moment my bank account has been getting more and more overdrawn to avoid this which is what's made me realise I need to get this sorted out.

MrsTinks wrote: »

Are any of your debts secured on your property? This is really important.

Nothing at all, the only debt on the flat is the mortgage itself.

MrsTinks wrote: »

Right now you may be nearly 1/3 of the way through your mortgage as it were, but you have amassed debts to almost the exact same amount. It's important you work out where that money has gone, because without your unsecured debt payments you could afford to live on this salary. I know you were out of work for 6 months but I expect the problem only escalated then?

I'm not saying any of this to judge you - but it's really important you know HOW you got here, otherwise resolving it will be very very hard indeed.

I'm ashamed to say that there has been a lot of burying my head in the sand over the years, but essentially it started with not being able to pay a credit card bill that I got a loan for. The increased the loan when I couldn't afford that one. It's completely my own fault although being out of work didn't help - but I should have been better equipped to deal with that.

MrsTinks wrote: »

You have options - the easiest (on paper) would be to increase your income as a house hold. You could enter a DMP as pointed out by James above. Your rating will be trashed which is not a completely bad thing but you will struggle to get a good mortgage rate.
You can sell up and start again completely from scratch. You would have a small amount for a rental deposit and no stress hanging over you. Credit rating will be untouched and you can rebuild. You're likely to be off the housing ladder however.

Would I even get a bad mortgage rate even if I didn't change borrowers? My partner doesn't know about this debt and I'm scared that if they find out it'll tip them over the edge so selling up isn't really an option I've got unfortunately. I think I've pretty much decided to go down the DMP route.

MrsTinks wrote: »

Ultimately the decision is up to you, and I would recommend speaking to either national debtline or one of the other FREE charities available to talk everything through before you decide on what path is right or you.

Thank you so much for your help, advice and time. I really appreciate it.

MrsTinks

jonesie01 wrote: »

The car is in my partners name and the bills for it are all covered. Without a car and the freedom it brings their illness gets worse and darker. I know that's not much help but I'd rather not go into too may details if you don't mind.

I totally understand - my only comment will be that it's an expensive car... would they understand that it might be a sensible thing to sell this one and buy a cheaper and more affordable car for now? Debts aside but you only have one income, it wouldn't be unreasonable to downsize this? The costs and payments - do they come from your partner or do you pay these? That might have an impact on your DMP being accepted easily by your creditors...

At the moment my bank account has been getting more and more overdrawn to avoid this which is what's made me realise I need to get this sorted out.

How much breathing space have you got left? That's a massive overdraft for your income...

I'm ashamed to say that there has been a lot of burying my head in the sand over the years, but essentially it started with not being able to pay a credit card bill that I got a loan for. The increased the loan when I couldn't afford that one. It's completely my own fault although being out of work didn't help - but I should have been better equipped to deal with that.

Please don't take this as judging because it's not: this is a serious debt to "accumulate", however most of us here have done it, and we know there is ways to fix this, it's just important that you understand so you can fix... Going forward keep a spending diary - honestly it's amazing the impact of seeing where every penny goes after a few months. A £3 meal deal at Tesco 5 days a week is £60 a month, add a coffee a day at say £1.5 and you are up to £90 a month already... it was only £3, but all those small streams make a river. Understanding where every penny goes if taking control

Would I even get a bad mortgage rate even if I didn't change borrowers? My partner doesn't know about this debt and I'm scared that if they find out it'll tip them over the edge so selling up isn't really an option I've got unfortunately. I think I've pretty much decided to go down the DMP route.

I'm not a mortgage adviser, it is possible if you re-mortgaged with the debts you have now that you wouldn't' get a prime rate anyway, THIS IS NOT MY AREA OF EXPERTISE I would speak to an independent adviser. HOWEVER when your term is up what does it roll over to? Would it actually be completely bad to roll into it's "after the fixed term" rates?
It is something you should discuss with Step Change too I think.

Your situation is a little off the norm in that you need to consider the impact on the mental health of your partner, and that's not always the same options as a "pure" DFW hardcore solution so please get some professional advise on this.

lazer-zxr

I understand the freedom a car brings is such a benefit, and there really is no need to sacrifice this.
But can't you trade down from a £40k car to a car under £3k for a while. It would be such a benefit.
I have had my own debt journey, which I'm still on, and has meant driving around in an £800 car for a few years. It is only because of this, I've come to realise that I didn't need the heavily depreciating shiny metal, this £800 one carries out exactly the same function just fine, and is the only one I can afford.

enthusiasticsaver

You have received some good advice Jonesie but ultimately the only people who can change the way you are heading is you and your partner. I do understand when you say your partner has mental health issues but to be honest a car such as the one you have is having such a massive impact on your finances that ignoring this and hoping it will all go away is not an option. Eventually your overdraft will escalate if you continue to overspend and this will have an impact on borrowing at decent rates in the future and lead to defaults when you are no longer able to service your debt and your bank refuses to increase your overdraft. Do you really think letting your partner continue to think everything is fine is a better option than regaining some control over your situation?

Presumably there is no way that you would now get £40k for this car (was that book cost? !!!) but presumably at least one of the loans (VAG?) is for this and it would be sufficient to clear it? That would save you £259 and would knock almost £19k off your debt. Buying a cheaper car would enable your partner to continue getting around if this is really necessary. As someone else has said there are no allowances in your SOA for running this car apart from petrol so presumably maintenance, tax, insurance etc needs to be accounted for too unless that £32 is for car insurance?

The rest of your soa is cut to the bone (although groceries could be lower - we pay £200 for 2 of us per month and that is not being overly frugal) so I seriously doubt you keep to this. No entertainment, gifts, holidays even weekends away or haircuts etc etc?

I assume you are trying to maintain everything is fine for your partners sake but ultimately she will need to know the problems you are in so it is better that she is on board with it. Start by getting a valuation on that car and finding out options for trading it in for a cheaper one. Sorry to harp on about this but you must realise very few people pay out £40k for a car unless they are seriously rich?

Good luck and I do hope you find some sort of solution as it must be very hard trying to sort this out on your own.

enthusiasticsaver

If the loan for the car is in your partners name this won't be included on the DMP. Only the borrowing in your name will be allowed.