Selling house to pay debt

enjoyyourshoes

So just did quick calc, if you could stop spending on 'stuff' and throw £1000 at debts every month (no apr by debt identified on SOA and no clarity on interest to charge so just took 0% which is not realistic!) you would need 14.5 years to pay off debt declared)

You have to declared family debt, so if you could negotiate holding repayments off , the 317.4 debt will then take 9.4 years to pay off, thats without anything going to pay off family debt.

Are any of these scenarios realistic?

EmmaMicawber

Could you increase your household income? Is your DP part-time- could they increase their hours? Or if at home with small children, could they become dedicated MSEers and look at bank switching/ surverys/ ebaying etc which could be done when the little ones are napping? Second job?

(I write this feeling quite hypocritical as I'm currently procrastinating to avoid finishing another job application!)

enthusiasticsaver

BA1985 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 3180
Partners monthly income after tax....... 580Can your partner increase her hours?
Benefits................................ 0 child benefit/tax credits?
Other income............................ 0
Total monthly income.................... 3760

Monthly Expense Details
Mortgage................................ 795.3
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 30
Council tax............................. 200
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 150 when do these contracts finish?
TV Licence.............................. 12
Satellite/Cable TV...................... 70 cancel
Internet Services....................... 0
Groceries etc. ......................... 400 not overly bad but do you shop at Lidls or Aldis as they are cheapest
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 12.99
Car Insurance........................... 37.99
Car maintenance (including MOT)......... 0 you need something in here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 80
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25 possibly a bit low and do you save this every month and if so, where as you have nothing in cash ?
Haircuts................................ 25
Entertainment........................... 250 can this be reduced?
Holiday................................. 0
Emergency fund.......................... 0 you need something in here
Family Loan............................. 850 this is unaffordable with your other commitments. Will they accept a reduced payment and when is it due to be repaid? How much is outstanding and is it interest free?
Total monthly expenses.................. 3313.28


Assets
Cash.................................... 0
House value (Gross)..................... 330000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 331500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 160000...(795.3)....2.09
Total secured & HP debts...... 160000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................6500......160.......0
Credit card....................800.......40........0
Credit Card....................3200......150.......0
Catalog .......................200.......7.........0
Store Card.....................1500......70........0
Credit Card....................2000......150.......0
Credit Card....................1000......120.......0
Credit Card....................200.......10........0
Credit Card....................2000......100.......0
Total unsecured debts..........17400.....807.......-


Monthly Budget Summary
Total monthly income.................... 3,760
Expenses (including HP & secured debts). 3,313.28
Available for debt repayments........... 446.72
Monthly UNsecured debt repayments....... 807
Amount short for making debt repayments. -360.28

Personal Balance Sheet Summary
Total assets (things you own)........... 331,500
Total HP & Secured debt................. -160,000
Total Unsecured debt.................... -17,400
Net Assets.............................. 154,100

Created using the SOA calculator at [
Reproduced on Moneysavingexpert with permission, using other browser.

Several points on this. A few areas can be cut but not significantly to cover a £360 shortfall each month. Your problem, in case you didn't know is you are way over committed with debt. £850 per month to the family loan is unaffordable. How did you come up with this figure? I get the feeling that when things get tight you open up another credit card account which of course has now compounded your problems as you have £800 each month of credit card payments, £800 for your mortgage and £850 for the family loan. That alone is £2450 leaving you around £1300 for bills and living expenses. Are the credit cards all at 0%?

Can you reduce the family loan payment as a first step to get on top of the credit cards and get rid of some so the shortfall can be eliminated?

enthusiasticsaver

Your biggest problem is any DMP will not take your family loan into account and no way will they leave you enough leeway to pay £850 per month to it. Your credit cards are actually lower than the family loan so my feeling would be that you should talk to your family and ask if they can accept a lower figure for say a year to give you a chance to get on top of other debts. I daresay this will be a difficult conversation especially if they have already bailed you out once but this situation cannot continue. The credit cards are not extortionately high so even 6 months breathing space to get rid of at least half the cards and store cards and catalogues would help. I cannot emphasise enough though you have to get rid of the cards as you pay them off as they are making your situation worse.