Debt assistance

onthefencepost

Hi all,

I feel deeply ashamed of myself however I aim to be better than what i am now and hope to get out of the hole and steer my life in being debt free.

I have around 35k of unsecured debt consisting of Loans / credit cards.
Long story short I'd owned my business for several years and decided to close doors paying my staff and ensuring all my tax affairs were up to date. I entered back in to the employed world within a month carrying a mountain of debt that I had accumulated, I've tried balance transfers my credit card debt as much possible and got loans where possible to deal with the rest, until about 12 months ago I started gambling with little money I had left and you've guessed it money I didn't have. I initially had big wins and more recently just loss after loss after loss and using money from my credit cards to pay for my bills etc.

Mentally I've been in a tough place, I've been through counselling and this has helped me and more importantly I know i'm better than this and want to get to my old self! If it wasn't the love I had for my parents and wider family I think I would have drowned or ran away somewhere or worse!

I will put up a statement of affairs for you guys to have a look at in the coming days. My situation is that I live at home with elderly mum and dad. My father is retired and ill and my mother is also not so well and i intend to take care of them as they have taken care of me for all these years. The house has a mortgagee on it with a deal expiring early next year at which point we either pay the lump some or I take out a mortgage out on my name. THIS is what makes me nervous and have sleepless nights with the level of debt I have will i get a mortgagee? All my payments have been up to date on all my loans and credit cards, however I have one old default from a credit card from my younger days from 2013/2014.

Some options on how to deal with my debt and the house situation will be helpful.

Thank you for reading.

SnuggleBuggles

Bumping in the hope that someone with more knowledge than me can help/advise.

Best of luck OP. Hang on in there!

fatbelly

There are maybe three things here and I'm not sure any are really dfw, which is probably why there has been no reply.

1. Your gambling - this is a serious issue that needs specialist help. Hopefully you are getting that. Gamcare are a good organisation to contact for help tackling a gambling issue.

https://www.gamcare.org.uk

Other posters have had personal experience here and may comment

2. You say your parents' mortgage has 'a deal expiring early next year'. Does the mortgage term expire or just the deal? Assuming the house and mortgage are both joint, your mum and dad need to take advice on their options. If there is the ability to 'pay the lump some' then generally speaking that would be a good option as interest received from savings is likely to be less than interest paid on a mortgage.

3. will i get a mortgage? Impossible to say on the info given, and you (and they) are going to need specialist advice if you are considering transferring ownership of the house. As a general point if you have a very high income then 35k of serviced debts may not be fatal, though the default may be an issue until it drops off in 2019/20 (could do with checking that date).

A 65k mortgage on about 30k per year salary would not be difficult in normal circumstances

Post your soa and let's have a look at it.

tlc678910

This will probably sound brutal, and I don't mean it to be, but because you have a problem with gambling you should not take ownership of your parents house - this could lead to the worst of the worst outcome for them. It isn't fair to expose them to this risk particularly if they don't know you have a problem. Losing your parents house would also probably destroy your own mental wellbeing too.

Get your parents to meet with a broker. There can be options for borrowing into retirement if they have an income or they may have to consider a lifetime mortgage /downsizing or even renting.

Good luck
Tlc

onthefencepost

SnuggleBuggles wrote: »

Bumping in the hope that someone with more knowledge than me can help/advise.

Best of luck OP. Hang on in there!

Thank much appreciated almost gave up expecting a response!

onthefencepost

Hi,

Thank you for your responses.

Firstly my gambling - it’s come to an end! Gamcare have been brilliant - I’m certainly on the road to recovery. It’s not been easy but I have a path / plan to focus on and the house is part of that. I agree this gambling business is most dangerous and it almost completely finished me.

Excuse my lack of understanding but given my parents don’t have savings to clear the mortgage I don’t think the bank will loan them money if they aren’t working? Secondly parents much rather the house stays in the family and passed on the kids I.e myself. So the option of them having the property paying them money by selling it on including down sizing is not a option. My older brother and sister have moved out so it’s just myself and parents at home.

I will put a statement of affairs up over the weekend. My plan is to shift my debts on to the mortgage. Although it’s diffcult time atm I’m meeting my minimum payments and I’m paying of my credit cards, I’ve not once missed a payment since 2014 and just today I’ve cleared of one of my smaller credit cards! Small victory! I’m currently pay £750 + a month towards my debts and pay £650 towards the house which covers the mortgage payment of £300.

The house is worth around £200k probably a little more. Mortgage amount remaining is around 65k give or take.

I googled a number of brokers which state they can help people with ccj’s bad credit etc get a mortgage - is this my starting point as banks might not be to willing to lend given my level of debt and past default?

Thank you for reading and appreciate your help in this matter.

sourcrates

Hi,


Appologies, your post must of been missed earlier on.


I agree with Fatbelly here, lets see an SOA first, then we can make constructive comments.

onthefencepost

Hi there,

This has been a painful but necessary task to complete.
Just highlights the sheer scale of a mess im in!

The taking over of the mortgage complication just makes it worse! Am im not going to get accepted with these debts? I was thinking of rolling these debts into the new mortgage?

I've missed no payments. I do have one old credit card default which will be coming off in 2021. My outgoings are higher than my income and as much as I can occasionally break even in the month I end up the following month going into further debt by drawing money on my credit cards at eye watering interest rates just to pay bills etc. Also its unexpected car repairs or monies for gifts which don't help. I work very hard for my wages and each month my situation is getting worse.

I genuinely am grateful for help and assistance in this matter.

Thank you!


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2350 (averaged over the last three months – expenses included without 2079)
Partners monthly income after tax... 0
Benefits........................................... 0
Other income................................... 0
Total monthly income.................... 2350

Monthly Expense Details
Mortgage...................................... 0
Secured/HP loan repayments....... 0
Rent............................................. 400
Council tax................................... part of rent
Electricity...................................... part of rent
Gas.............................................. part of rent
Oil............................................... 0
Water rates.................................. part of rent
Telephone (land line)................... 0
Mobile phone............................... 61
TV Licence.................................. part of rent
Satellite/Cable TV........................ 70
Internet Services......................... part of tv services
Groceries etc. ............................ 150
Clothing....................................... 30
Petrol/diesel................................ 400
Road tax..................................... 23.75
Road tax......................................25.37
Car Insurance............................. 35
Car maintenance (including MOT)......... 40
Car parking.................................... 0
Other travel.................................... 0
Childcare/nursery........................... 0
Other child related expenses.......... 0
Medical (prescriptions, dentist etc).. 0
Pet insurance/vet bills..................... 0
Buildings insurance........................ 0
Contents insurance........................ 0
Life assurance ............................... 31
Other insurance.............................. 0
Entertainment................................ 100
Eating Out......................................150
Holiday............................................ 0
Emergency fund............................. 0
Student Loan Repayment (DD)...... 0
Nest Pension..................................10
Lifetime ISA....................................20
Savings...........................................25
Gym................................................23


Total monthly expenses.................. 1594.75


Assets
Cash................................................ 0
House value (Gross)....................... 0
Shares and bonds........................... 0
Car(s).............................................. 2500
Other assets................................... 0
Total Assets.................................... 2500




Secured & HP Debts
Description....................Debt......Monthly.. .APR

Total secured & HP debts......0

Unsecured Debts
Description....................Debt......Monthly.. .APR
Nationwide Over Draft Ac 1 2000 22 Unsure of APR
Nationwide Over Draft Ac 1 1000 15 Unsure of APR
Amex Charge Card...............600.......600.......N/A ( I pay this off monthly includes fuel and little entertainment and food shopping)
Aqua CC............................3600......190.......42.9
Tesco Bank CC..................1200......40........29.9
Marbles CC........................4600......189.......34.9
Amazon CC........................4000......125.......27.0
Creation CC........................4000......40.......0% – Till Jan 20
Asda CC.............................3100......35........0% – Till MAR 20
Credit Union Load .............5100......275.......11
Shawbrook Loan 1.............3900......175.......15.9
Shawbrook Loan 2.............4300......175.......15.9
Restons (tomlin order) Unsure 10
Total unsecured debts.........37400.....1291....


Monthly Budget Summary
Total monthly income.................... ..............2350
Expenses (including HP & secured debts). 1594.12
Available for debt repayments..................... 755.88
Monthly Unsecured debt repayments......... 1291
Amount left after debt repayments.............. -535.12

Personal Balance Sheet Summary
Total assets (things you own)........... 2500
Total HP & Secured debt................... 0
Total Unsecured debt........................ 0
Net Assets......................................... 2500

fatbelly

I prepared the following response based on the mortgage term ending next year but if it isn't (and I don't think you have been clear on that) then let me know how many more years the mortgage has to run.

I wouldn't rush to secure that debt against the house without properly investigating the options.

I'm sure your parents will be concerned that their mortgage term is ending next year on what we presume is an interest-only mortgage. They should be exploring now what options they will have and try to find out how aggressive their lender may be. The three of you are clearly going to try to remain in that house and so getting that part of the plan nailed is key to what happens to the non-priority debt.

There may be short-term 'forbearance' or a longer-term plan.

As it sounds like you will have a clean credit file (though very high indebtedness) in 2021, if it's short term 'forbearance' then that might be the best chance of getting a reasonable deal and so you will need to avoid further defaults. But you will be getting £500 further in debt each month in the meantime

If they get a longer term deal then that might allow you to default and do a debt management plan or bankruptcy. Either way you will be making payments for three years and have rubbish credit history for six. But then it's out of the way and the debt is gone.

On-the-coast

If your Amex (£600 per month) = your car fuel & eating out on your SOA then you’re double counting your expense... and you’re nearly breaking even :-) Although there are probably things you’ve forgotten about in draft #1 :-(

Suseka97

You're getting some really good advice from fatbelly and sourcrates - these guys know their stuff, so please do take it

My only contribution to this is to urge you to not seek to turn your unsecured (and non priority) debts into a secured debt, assuming you would be able to somehow consolidate that with the mortgage renewal in some way. I have no idea how that works to be frank - but if you could, it would be a bad idea.

I really do appreciate you are trying to find the best way forward and I congratulate you for seeking help with your gambling addiction, that would have been tough for sure. Your parents really do need to get professional advice about their options regarding the mortgage and depending on what those are - will determine your next step (DMP, bankruptcy, IVA).

Do keep posting and let folks know how you are getting on so they can continue to help you through this.

Good luck.