£79k non mortgage debt!!!!

sourcrates

Most people who own property, and have a lot of debt, have only two realistic options open to them.


Option (1)

Earn more money, cut down to the bone on your outgoings.


Option (2)

If that is not possible, then a debt management plan may be the answer, lets not beat around the bush here, you cant continue as you currently are, with such a massive shortfall in disposable monthly income, eventually, you will hit the wall, and if you don't make arrangements before that happens, then the house may be seriously at risk.


There are people on these forums with over 100k of unsecured debt, homeowners, just like you, who due to changes in circumstance, have found themselves unable to make minimum repayments, the banks have been very helpful and understanding, affordability is key these days due to pressure put on the lenders by the FCA (Financial Conduct Authority), they are running informal debt management plans, some only paying token payments of £1 per month on massive debts, you could potentially have around £200 a month to pay towards your debts, if you juggle your budget a little more.

We have a dedicated DMP support group thread on this forum, it can be found here :


https://forums.moneysavingexpert.com/discussion/5897083/dmp-mutual-support-thread-part-13&page=39


My suggestion would be to do some research on DMP`s, then maybe contact one of the free debt charities to discuss the option further, Stepchange would be my first choice, these plans run by the charities are free, there is no charge, avoid any company that charges for this service.


It will affect your credit file though, that is unavoidable, but your debt is the main worry here, once that has gone, your credit file will heal itself in time.


It really is important you take some kind of action here, good luck.

enthusiasticsaver

Sourcrates gives good advice above.

I suggest you open a basic bank account with no overdraft facilities and arrange for your benefits to go in there. Make sure it is a bank you don't owe money to.

HairyHandofDartmoor

Good advice from Sourcrates and EnthusiasticSaver. You should ring Stepchange who will help you as they have helped many other people.

MrsExhausted

Thank you so much. Have made myself ill over the christmas holidays worrying about how we will cope. Will head over to the thread

MrsExhausted

barbarawright wrote: »

Two cars but only £50 in petrol? Assuming one of you gets expenses it seems like it would be cheaper for the other to use public transport / bikes / taxis

School run is about 30 minutes via the motorway but 2 hours via public transport.

System

MrsExhausted wrote: »

so we're pretty much screwed with no way out?

Technically you're bankrupt however that's a path you don't want to take.

Clearly the freelancing just isn't working as its barely generating more than a part time job on minimum wage and in order to go on a DMP or IVA or similar you have to have an income with some free money available to make payments which currently you don't as your income only just meets your outgoings not including debt repayments so don't be surprised if the advice you get at first from Stepchange suggests bankruptcy. You're not going to be able to borrow your way out of where you are now due to insufficient income but that's not a bad thing as it stops the hole being dug deeper.

The most obvious choice if keeping the house is the primary goal is for other half to get a job and you to get a part time one if he does and do the freelancing around that then once that gets built up to a high enough level you can do it full time. Currently even without the repayments on the borrowing your income doesn't really meet your outgoings. Whilst there's some fat to be trimmed from your budget it isn't a great deal and not enough to give you money to make payments to a DMP and leave you with enough over in case of unexpected expenses so you need to increase the income as well.

If you're willing to forego the house and maybe rent for a while then that would be the easiest pain free way out of the debt but as I said above, even without the debt repayments you're almost living hand to mouth with your current expenditure even if you do manage to make some savings.

In addition to that I'd have a look around the house. Find stuff that's been languishing unused for months or even years in drawers, cupboards and boxes in the garage and sell them and use that money to give you an emergency fund.