46k debt help

cdow78

As title

My family debt is at 46k the reasons for this was a massive family crisis 2 years ago and recently dealing with finding out my youngest son is autistic, we let things slip my partner was off work with depression etc and things have just got out of hand

Now when we were in the crisis we moved house pushed all bad debt onto 0% credit cards etc we was in a good place, now that isn't the case..

We owe around 46K to 13 providers and the monthly bill for all these is a £1400 per month, up until recently we have managed to pay these payments but sadly a few have now fell behind by a few months meaning our credit rating have fell.

My current mortgage sits a 160k on a property worth 225k
current mortage lender will not lend higher than 75%

We have not had a family holiday for 2 years we currently have cut all out goings to minimum and have spare per month approx £600 which pays for food fuel etc i know that might seem a lot but we have 3 children to look after and it does not last normally having to borrow of parents

mortgage is at £730
debt at £1400
bills at £550

our income is £3300 monthly

The debt is killing us and if im honest getting just too much my options as i see them are as followed..

IVA/DMP but im worried that i will just be in the same situation ie no holidays or even a night out that all my money will just be tied up again, hope that dont sound off just we cant save money for if the boiler breaks or car fails MOT etc and id like to have some cash if you know what i mean.

Second charge on my property.... yes yes i know but even google searching the likes of ocean finance brings back results of £570 a month for 7 years, almost freeing up £1000 and that means we live very comfortably and hopefully after a few years possible get that tied into a better mortgage once credit rating improves?

The way i see it is i owe money and earn money while the second charge isnt great thing to do it potentially gives me more free income than any DMP could or is this theory wrong? would any plan give me free money of £400 per month?

also on a side note my son is autistic and currently we haven't claimed any DLA for him currently filling out form would this need to be included in a IVA/DMP?

Any advise please

fatbelly

Whatever happens, you should get your benefits sorted out. I'm not an expert and it gets complicated as to what premiums you get where. But get your application in for son's dla, and you might find you also get some tax credits whereas atm I'm guessing you just get child benefit.

There might also be a carers allowance (or underlying entitlement) angle somewhere.

You have itemised 3 options:

DMP - not much downside to this, and you could do it yourself. £1000 per month for 42 months is realistic. You could also use stepchange/payplan

IVA - this is bankruptcy for someone who can't go bankrupt (because of equity in the house) - you make payments for (in your case) 72 months. You could talk with some IPs and get an outline plan but there are lots of downsides here and ip providers tend to just sell the positives

Secured loan - this is the most dangerous option as you are moving non-priority debt to priority and putting your house at risk.

Try posting a soa - there may be other options.

http://www.stoozing.com/calculator/soa.php

sourcrates

My son is autistic, the DLA is for your sons personal care needs, it is excluded as income in insolvency, in a DMP you have more control over what you pay, self managed DMP seems the way to go here, see what the SOA says.

Gemsy81

Post a detailed SOA - it sounds like you are not 100% sure where all your money is going (as is the case for most of us when we start on this board), and that is part of the problem. The fact remains that if you don't make sure you are budgeting properly, you will end up in the same place, but with possibly putting your home at risk.

People are very helpful on here, and could give you loads of ideas as to where you could save money.

cdow78

Ok I!!!8217;ll get too it today

Just a quick question regarding the SOA what is a allowed figure to be used it the holiday plus repairs?

My point is I could get 3 days away in a caravan for £400 or can I budget in a holiday to Spain? We have never gone to Spain as a family because of no money but just asking. What is a acceptable monthly amount?

cdow78

Also another question regarding income

I!!!8217;m a factory worker and I get currently a extra 16% shift allowance, 4 weeks ago that was 22% due to being on a different shift pattern and could as soon as November change again (possibly down to 0% or maybe up again)

Do I put in my standard working wage without this shift? As it can change very rapidly depending on demand?

Pixie5740

cdow78 wrote: »

Ok I!!!8217;ll get too it today

Just a quick question regarding the SOA what is a allowed figure to be used it the holiday plus repairs?

My point is I could get 3 days away in a caravan for £400 or can I budget in a holiday to Spain? We have never gone to Spain as a family because of no money but just asking. What is a acceptable monthly amount?

You're statement of affairs should reflect where your money is going now, not where you'd like it to be going. If you aren't budgeting anything for holidays or repairs then you enter zero next to those in your SOA.

cdow78 wrote: »

Also another question regarding income

I!!!8217;m a factory worker and I get currently a extra 16% shift allowance, 4 weeks ago that was 22% due to being on a different shift pattern and could as soon as November change again (possibly down to 0% or maybe up again)

Do I put in my standard working wage without this shift? As it can change very rapidly depending on demand?

I would use your basic income because that's all you're guaranteed to get. This way you are not dependent on the shift allowance which means you could potentially use that to build up an emergency fund, holiday fund, etc going forward.

Pixie5740

cdow78 wrote: »

Second charge on my property.... yes yes i know but even google searching the likes of ocean finance brings back results of £570 a month for 7 years, almost freeing up £1000 and that means we live very comfortably and hopefully after a few years possible get that tied into a better mortgage once credit rating improves?

Yes, you know it's a terrible idea because it is a terrible idea.

1) You're turning unsecured debt into debt secured against your home.

2) Consolidation rarely works and it especially doesn't work if you haven't got a handle on where your money is going.

3) Early repayment charges can be hefty.

4) Secured loans tend to have variable interest rates and they only vary one way....up.

cdow78

Hi

I truely do get what your saying I do but..
I do know where my money is going and £1400 per month is going on debt credit cards and loans etc I believe my household spend is reasonable and things like cars needing fixing etc has caused payments being missed as we don’t have a plan. And I get not having a plan is the issue.

One loan I pay £330 for I’d leave that loan alone and look at a secured loan of £29000 searching comes to approx £350 to £450 depending on which lender the max I’d be paying would be £780 per month again I realise this amount could go up but already based on information I’m seeing on these replies it would need to go up £220 before affecting any DMP ( realise it’s over a longer period ) or £620 more to get to what I paying for now?

My hope is that within 4 years i could remortgage include the secured loan to mortgage and the £330 loan would be off.

Stupidly I looked last night at a mortgage with say nationwide that includes all debt (sadly they wouldn’t touch us) and it’s comes to a grand total of £795 I’d be laughing having to pay that! Shocking isn’t it

sourcrates

Please don't consider consolidation.

Ask any one on this forum if they have consolidated there debts prior to seeking debt help, a lot will say yes, most more than once.

I cannot stress enough what a bad idea that would be.

The strategy has so many pitfalls. For some it can work, for most it just doubles their debts, people are always reluctant to seek debt help, so they try these other stopgap measures first, costs them a fortune and increases massively what they owe, talking from experience, i have seen it fail so many times.

Pixie5740

What happens if your partner is off work again with depression? Where would the money to pay the mortgage and the secured loan come from?

Why pay interest on a secured loan when you could go down the DMP route and have the interest frozen?

Is the amount of debt you have increasing or decreasing each month?