Absolutely desperate for advice

trying_to_live_on_a_budge

I am hoping to find some advice please - I am absolutely desperate - in tears most of the time as my husband and I are in so much debt
We have a mortgage of 127000 and have never defaulted on payment we have lived in our property over 27 years but over the years have made disastrous decisions which has now lead us to a multiple credit card debts of nearly 75000 - we live in a house worth approx 300000 and we are both self employed. The problem has occurred with over winter months the last couple of years the self employed job brought in no money over the winter 5 odd months so we borrowed on credit cards to pay for the bills etc - obviously we know this was the wrong thing to do and has made matters far worse - the money coming in always goes down in the winter but we are about 6 weeks away from not being able to afford our monthly bills and with no credit available to borrow even if we did want to do such a stupid thing again.
What I am asking is the only way out of this I can see is to consolidate the credit cards into a secure loan on the property which will reduce our monthly outgoings - at the moment we are paying nearly 1400 on credit cards and looking approx on internet this could drop to about 500.00 a month - please can anyone advise me.
Please do not tell me how stupid we have been - we realise that and to be honest it will not be a helpful comment
Thank you for any advice

Willing2Learn

Debt consolidation does not often work out as intended. Many borrowers have found themselves with increasing debt after consolidation. Have a look at the thread linked below for some examples:
https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise

Sometimes, all that is needed, is for the individual(s) who are in debt to address their budgeting skills. Why not post your situation on the DFW board, with your SOA, to see whether the way you budget can be altered?

BoGoF

With £75,000 worth of debts and what appears to be a 'seasonal' income I think you would struggle to raise the amount you need.

What do you do that means no income for 5 months?

NeverendingDMP

If you consolidate you will be linking debt directly to your home and will have to borrow against it so then risk loosing it. If anyone actually lets you borrow it. It will also have more interest added on. Come and have a look at something call debt management support thread. It has lots of people posting who also have little bits or lots of debts. Creditors are meant to give breathing space 30 days so you can look into your options.
You have noticed just in time that you are at the point of no return. Please have a look around the threads and a think about it. Stepchange and debtline offer free advice about your options and then help deal with the fall out. I think there is a business debt helpline as well depending on if it's work or home debts.
Try and work out who and how much you owe money to. IE credit cards council tax mortgage etc. Try not to get upset, easier said than done I know. There are lots of different ways of dealing with debt. I'm learning something every day. Pop over to the debt free wanabee board but you consider signing for any loans and have a nosey. X

NeverendingDMP

Look for DMP mutual support thread part 12

System

You're effectively bankrupt. Instead of looking at ways to increase your borrowing, which is where consolidation usually ends up, you need to consider going into a debt management plan. You would do much better posting on the debt free wannabe board than trying to find ways to dig a deeper hole.

You also need to consider whether the self employment is valid to do any longer and look for PAYE work as clearly the self employed income is not sufficient to meet your bills, especially over winter.

It might be the case that you need to consider selling the house, using the money to clear the debts and the remaining amount to put down on another house or even buy a smaller one or a flat outright.

sourcrates

I agree you need to visit us on the DFW board.

Credit card debts are all non essential payments, which means if all you can afford is £1 a month to each one, then so be it, as long as it’s backed up by a copy of your budget, creditors have little choice but to accept it.

A more permanent solution may be increasing your income, or even selling the house, as previously suggested.

Living in the credit bubble gives you crazy ideas sometimes, debt management is what you need, not further borrowing, pop over and see us soon.

DCFC79

Consider getting a temporary job when the self employed income dries up/the quiet periods.


This is a problem with being self employed when you can have a low amount of work.


The consolidation plan wont work. What if you do consolidate the debts into a secured loan and you find at a later point you cant make the payments ?


Its a recipe for disaster.

macman

You have £173K of equity in the house. Sell it, downsize or rent, and you can clear your CC debt.
Converting unsecured debt into debt that could leave you homeless would be insane.

BrassicWoman

I too would sell up, take the £100k I had left, and start again clean.

-taff

Firstly, turning unsecured debt into secured debt is not the way to go when you have so much equity in your house. You don't want to lose the house because of being unable to pay debt in the future.
Secondly, consolidation loans don't work except in very very rare circumstances. I've only seen ti work once. And it only worked because the person followed the rule of cutting up every card, paying off every loan, and then not taking out any other credit for the duration of the loan.

Most people don't do that, they keep the cards open 'just in case', spend on them again, and soon, you're in the same situtation as you were before, owing a hell of a lot more but not knowing how it hapened, because the initial debt reasons weren't addressed.
For example, you say you had no cinome and used credit cards to pay the bills for five months. What if that happens again this year?


Your absolute best bet, in either order, is to go to the debt free wannabe baord, post your SOA with your income and outgoings, see where savings can be made.Phone up stepchange or CAP and see what they, or go to their websites and fill in their calculation thingy to see where you are debt wise.
DO NOT get a consolidation loan. You need to address the reasons why you are in debt [ which you have] and formulate a plan to get out of it, not jump on the idea of more credit to drive you deeper into debt.


Good luck.