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Debt Advice!

Just like to take this time to say Hi and say what a great website this is, before boring you all with my story.

Ok here it goes! After making my first step onto the property ladder of 125k @ 20 with a great job earning in excess of 30k a year life didn’t seem to have any mountains to climb.

5 years on and I feel like I’m a spider in a pint class with no way out!

After 18 months into my mortgage I was made redundant and that’s where it all became real life. 6 months away from the re-mortgage for a better rate also when the discounted rate finished. The monthly payment became nearly £800 with the interests rate climbing (Previously £446 with the discount).

It took me 8 months to find work after being forced to sell my car to pay bills bearing in mind I also had a £21,000 pound loan costing me £300 a month for 8 years and an overdraft reaching 3k. That when it hit me I was now earning around 50% of previous earning with the same outgoing if not more!

My income was around £1120 a month with £800 of that just paying my Mortgage (I did let out a room, which did help to pay 40%) and a loan. Not including fuel, insurance etc.

In the time I was unemployed I was in 8 Months arrears on all my Debt with my mortgage lender forcing me to do a voluntary repossession, Which I obliged and moved in with my parents.

Now nearly a year later my house has been re-sold with a huge shortfall, I’ve been waiting for this before going any further. I kept making regular payment on my overdraft and loan through debt collection agencies to help relief stress.

My Mortgage balance was £128,483 and they sold the house for £98,000 leaving me with a £30,000 plus shortfall not including any charges.

So my Debt now stands at:
1. Loan = £20,698
2. Overdraft = £2,179
3. Shortfall = £30,483 plus

Total debt now standing at over £53k @ 23 years old!

I’m currently self Employed earning £1300 a month after tax (while the works there)

Outgoings (monthly):

Rent = £400
Phone = £60
Fuel = £175
Insurance = £80
BUPA Health Care = £36
Race = £9
Computer = £135

Totaling = £895 not including clothes and any other expenses.

So where what when and how? What options do I have?
«1

Comments

  • fc123
    fc123 Posts: 6,573 Forumite
    i sympathise with your situation...but the good thing is you have experienced all this whilst young (i know it doesn't feel like a good thing!) and you will SOOO benefit from this experience later on in your life.
    1st; you're 23...healthy ditch the BUPA.

    Others will give suggestions but sounds to me like the past few yrs have been horrendous.
    Welcome to MSE!!:D
  • Lemon_Tree
    Lemon_Tree Posts: 10,202 Forumite
    Part of the Furniture 10,000 Posts
    welcome to MSE, you are in the right place. Take a look at the stickies at the top of the board and sit down and write down your SOA. That way people who are better than I will be able to give you good advice.
    Good luck
  • poppy10_2
    poppy10_2 Posts: 6,588 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Edsindebt wrote: »

    My Mortgage balance was £128,483 and they sold the house for £98,000 leaving me with a £30,000 plus shortfall not including any charges.

    How come there was so much of a shortfall? :confused:
    House prices haven't fallen by that much (yet).

    And why are you paying £135 per month on a computer? Is it a supercomputer??? :confused: You can buy a decent computer outright for £199.
    poppy10
  • Sea78
    Sea78 Posts: 6,185 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker Debt-free and Proud!
    Are you still living with your parents? Welcome to the board - what an awful few years!
    Sea xx
    CCCS DMP:Feb 07
    Total:£37,016.47 now £0 DEBT FREE FEB 14

    2022 Decluttering Campaign 49/1011
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    your first step is to produce a detailed budget (SOA) which includes everything including clothes, car tax, servicing, MOT, RAC/AA and also absolutely everything you spend in a year averaged to give a monthly figues... so if you buy any xmas/birthday presents divide by 12 and add to your monthly total.

    Its absolutely essential to work out what you really spend because without knowing that its impossible to see how much you have availible to pay your debts and to see the best way forward.
  • Sea78 wrote: »
    Are you still living with your parents? Welcome to the board - what an awful few years!
    Sea xx

    Yes i'm still living with the parents.
  • poppy10 wrote: »
    How come there was so much of a shortfall? :confused:
    House prices haven't fallen by that much (yet).

    And why are you paying £135 per month on a computer? Is it a supercomputer??? :confused: You can buy a decent computer outright for £199.

    I myself cannot understand why they sold the house for so little, from my understanding they are suppose to get the best price. Regards to the computer I do graphic design as a sideline job and it's computer and software cost's.
  • Morning Ed - welcome to DFW.

    Don't mind us asking, but who was the lender? Was it a >100% mortgage?There will be people on here who can help you find out whether you've been 'done', so there may be a way forward with this.

    If you think about it, why do they need to get the 'best price' - they've got some cash now, and you still owe them the difference, so what do they care?

    You will get through this!

    Good luck and keep posting

    gtd
    Official DFW Nerd Club - Member no. 208 - Proud To Have Dealt With My Debts DEBT FREE DECEMBER 2008!!!
  • Yes it was an 100% Mortgage
  • GeorgeUK
    GeorgeUK Posts: 7,737 Forumite
    Not sure if you would want to try this, but Martin is looking for volunteers.
    http://forums.moneysavingexpert.com/showthread.html?t=601823

    I can't really see much you can be cutting back on if that is your full list of expenses, so all i would suggest is make sure you are paying off the highest interest first.
    After falling off the gambling wagon (twice): £33,600 (24,000+ 9,600) - Original CC Debt: £7,885.91

    Dad Gift 6k ¦ Savings & Inv Tst: £2,500
    Loan 10k: £0 ¦ Dad 5.5k: £2,270 ¦ LTSB: £0 ¦ RBS: £0 ¦ Virgin £0 ¦ Egg £0

    Total Owed: £2,270 (+6k) 11/08/2011
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