Should I be asking for help ?

smallzoo2

Im a bit embarrassed really asking for help and advice. I think I'm an intelligent, professional guy but somehow we have found ourselves in a position were we are justing counting down time until eventually we should be out of debt but thats at least 5 years away..and Im not young anymore

Due to an inscrupulous business partner over 15 years ago I was left with nearly 25,000 on credit cards. We have done our best to pay them off but as you can imagine at rates of 18-22% its difficult to make any headway.

Basic details

My Salary £40k
Wife's Salary £11k
Total debts including credit cards and loans £40k
Credit card payments £650-700 per month
Mortgage £60k..£1400 per month ..5 years left
Property value £400k+

I must add that my salary is usually 7 days a week. I decided to look after my elderly mum who now lives with us and so I look after her at least 4 hours every day and then work from home about 8-10 hours a day including most weekends.

so you can see that our plan is to pay everything off when the mortgage runs out in 5 years but in the meantime we literally have no money left at the end of the month to do anything..

Maybe to some with a nice house I am in an enviable position but it certainly doesn't feel like that ..

Credit score is fair due to the credit card debts..

Any advice of who could help ?

Karonher

I have read good and bad things about adding debt to the mortgage. There are a number of articles online explaining the pros and cons.

ohdearhowdidthathappen

Going by my maths, you're bringing in about £3400 and total debt repayments are £2100.... so you should be ok, what's the other £1300 going on? Might be worth putting up a SOA.....
Is there anyway to increase your income or reduce your outgoings? Can you shift any balances to 0%? Too many unknowns to offer constructive advice...

Has your mum been assessed by SS, she/you might be entitled to some help, which might lessen the burden of care? My experience (with my dad) is that the agencies will let you muddle on if you don't ask... but there is help out there.....

Sanctioned_Parts_List

Karonher wrote: »

I have read good and bad things about adding debt to the mortgage. There are a number of articles online explaining the pros and cons.

While OP was talking about simply waiting out the mortgage period before addressing the unsecured debt, I think you might be onto something here.

Normally I wouldn't recommend securing an unsecured debt (on the basis of, if it all goes wrong, at least you still have a home), but at first sight, in this case it might be a reasonable way to move the credit card debt over to a much lower interest rate, which will free up several hundred pounds per month for overpayment or for an easier life.

OP would need to prepare a detailed SOA to determine whether this is feasible or not.

-taff

Are you overpaying on the mortgage or did you reduce the term? When are you in a position to change that? With that much equity you could have a much better deal.

Post up an SOA because without knowing where you can save money, Ican't really offer anything useful to see where you could cut back, even if only a little bit.
Plus, you need to see where you are spending odd amounts of money that add up over a month and a year. Everyone does this....

getmore4less

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

Get that SOA done,
Try to get the debt list as accurate as possible especially the interest rates
The full details of the mortgage.

Ages to give options for the mortgage.

Has the debt gone up or down(by how much?) in 2018?

Put what you can on the SOA it can be updated with missing info later.

With £500pm going in interest waiting 5 years is not a good idea.

As long as the spend numbers on the SOA look OK I think there will be a solution that will be more effective than the current plan.

EssexHebridean

Agree that a full SOA is a good way forwards. If you post it in here as suggested there may even be places there that you can make some savings that you've missed, but we might spot, we're good at that.

Should there be carers allowance claimable for looking after your Mum? That would offset things like presumably needing heating on at a higher level than you would probably have just for yourselves, as well as the time from your day lost. Remember too that if you can claim that it's "yours" not your Mum's.

Don't take this the wrong way but you mention the original CC debt from 15 years back being 25k - the fact that you now owe more and are still including that 25k after so long suggests that there is more here than just that debt you got stitched up with, though.

I'm going to strongly urge against the temptation to remortage and turn your currently unsecured debt into secured - that's a dangerous game to play.

getmore4less

Forgot to add you are not alone.

Often when the workload goes up with long hours and caring duties you just don't get the time to sit back and have a think about the bigger picture then things drift out of control over time often without even noticing.

Sometimes all that is needed is a fresh pair of eyes on the situation and a bit of clarity comes back.
(there are a lot of eyes here)

There may be things you just have not thought about or missed.
an example might be relating to your mum living with you exploring the benefits system may provide some things that have been missed, might be money but might be support that frees up valuable time.

Sometimes there are simple changes that sort it out sometimes it needs a bit more structured approach.

The goal is to create a realistic plan that is easy to monitor that deals with the situation.
Hopefully once in place it reduces the worry and stress.
Often the plan can restore a better life balance by allocating and prioritizing where you allocate your money.

Not saying this is the solution but an example

Current debt is £100k with a £400k asset and a monthly payment of £2kpm and I would estimate the end date if we leave things as they are at 7-8 years
5 years for the mortgage 2-3 more for the other debt as long as that is getting a bit smaller with current payments and not growing.

£100k 2% 7 years is around £1,300pm.
There will be options that don't require putting it all on the mortgage but they need exploring once the details are known.

This has highlighted something I missed before I will put that in a new post.

getmore4less

Picking up on the point I mentioned above.

Something does not look right with the mortgage data.

£60k, £1400pm, 5 years full term

One or more of those numbers looks wrong.

For them to be correct we get

£60,000 14.12% £1400pm, 5 years.

With LTV < 50% an interest rate under 2% is where it should be

£60,000 2% £1052pm, 5 years.

what are the actual mortgage amount, rate, payment and term(to the month)

Brenster

It seems to me you are trying to do too much too soon. On paper your finances are looking good.
I would reassess your '5 year mortgage plan' to say 8 years. Put the credit cards debt on the mortgage and your mortgage should be reduced to enable you to have some spare cash to enable you some breathing space.
This isnt the answer for everyone, especially those who have accumulated the CC debt through overspending, however yours are accumulated due to being left in the lurch by your former business partner, therefore i assume once cleared you will cancel cards and be responsible about not accumulating new CC debt.
Of course all this depends on your age, i am assuming you will be working for the next 8 years, if not extending the mortgage term may not be the answer.
Good Luck

theoretica

Even without putting the credit card debt onto the mortgage, prioritising paying the high interest debt before overpaying the lower interest mortgage (if you have that flexibility or can extend the term) would get the whole lot gone faster.