Help please too much debt

Louoffofsparkle

Ok so looking at your soa you don’t have any extra left at the end of each month. Absolutely no judgment here because this was me a year ago.
The best thing you could do is phone one of the free debt help services- Stepchange, CAP

They can talk through your options with you and you can figure out what’s best for you

Afreshstart

I agree with the last post that you would benefit from a chat with an advisor.
Congratulations by the way for facing up to the gambling and I hope you stay away from it.
A couple of questions I would ask myself
1.Do you have any opportunity of extra shifts,pay rise,promotion.(increased income)
2.An interest free loan from within the family - This is dangererous and I don't know your family situation.(clear highest rate debts to help pay others quicker) You would have to absolutely honour this debt which is why I say it's potentialy a problem if available.
3.Where do you see the situation, even if you make more cutbacks etc in say 6 months.
Do you feel you have any chance of making headway into your debt bearing in mind when those 0% deals end.
I'm no expert but I think your situation is not sustainable and you are trapped by the interest rates.Now you have most of the details at hand and I feel some of you costs are conservative, a chat with an advisor will provide you some options.

Don't panic and if it helps I let things get way worse before seeking help so you are doing the right thing by tackling this now.

Wish you well

enthusiasticsaver

FREDTHERED82 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 650
Benefits................................ 475.75
Other income............................ 0
Total monthly income.................... 2325.75

Monthly Expense Details
Mortgage................................ 512
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 106
Electricity............................. 40
Gas..................................... 30
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 0
Mobile phone............................ 93
TV Licence.............................. 13
Satellite/Cable TV...................... 30
Internet Services....................... 35
Groceries etc. ......................... 400
Clothing................................ 40
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 36
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 60
Medical (prescriptions, dentist etc).... 35
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 50
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 30
Total monthly expenses.................. 1706


Assets
Cash.................................... 0
House value (Gross)..................... 145000
Shares and bonds........................ 0
Car(s).................................. 1
Other assets............................ 0
Total Assets............................ 145001


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 85000....(512)......2
Total secured & HP debts...... 85000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HITACHI........................8000......150.......10.9
HITACHI........................658.......14........0
HITACHI........................4444......114.......13.9
VERY...........................1930......100.......0
MBNA...........................428.26....100.......18.9
HALIFAX........................13500.....311.......18.9
HALIFAX........................844.......25........18
HITACHI........................5789......103.......9.2
Total unsecured debts..........35593.26..917.......-


Monthly Budget Summary
Total monthly income.................... 2,325.75
Expenses (including HP & secured debts). 1,706
Available for debt repayments........... 619.75
Monthly UNsecured debt repayments....... 917
Amount short for making debt repayments. -297.25

Personal Balance Sheet Summary
Total assets (things you own)........... 145,001
Total HP & Secured debt................. -85,000
Total Unsecured debt.................... -35,593.26
Net Assets.............................. 24,407.74

Created using the SOA calculator

The groceries and mobile phones could come down once out of contract and you could count the cable tv as entertainment as you have not got anything in there. You haven't accounted for saving for car costs like maintenance though and given you have no cash/savings I would up the emergency fund to £50 a month as that stops you putting anything else on cards and making the debt rise further.

Given though that you are on a low income and presumably your partner works part time I think a DMP would be the best option to protect your property. The shortfall is too much to keep going as you are. Talk it through with an advisor at step change and take it from there. I don't think the creditors will take you to court to try and get a second charge but that is always an option if you have equity. You will need a new bank account and you will have to default on all the payments asap as they will be on your file for 6 years. You will need to save the payments up as emergency savings as you will have no access to credit. Usually the DMP takes a few months to set up so save as much as you can in those few months.

WelshSaver

Hi enthusiasticsaver I couldn't read your post and not reply. I just wanted to let you know that I made the decision back in 2011 to take out a debt management plan and it was the best thing I did. At the time my husband and I had about £1200 a month going out in secured loans and credit card debt. We were only maintaining it by putting our day to day living costs on credit cards, however they got to their limits and we had no other sources of credit available.

Life felt hard but talking to the experts about a DMP really helped and put our minds at rest. Studying to be an accountant at the time I couldn't go bankrupt or take out an IVA as this would have been detrimental for any career progression. We had payments set that we were comfortable with and all was good.

Fast forward to today. I am now divorced from my ex husband, the marital home was sold and by the time the secured loans and mortgage was paid there wasn't much left. I managed to arrange my own DMP for debt left in my own name and am down to £3000 remaining, which I am hoping to pay off at the end of this year. In the meantime I now have a better credit score and have been able to get a mortgage and purchased my own property this year. At the age of 47 I didn't think I would ever get on the property ladder again. I am much more careful with money now and the future is so much brighter.

Good luck with your decision and hope everything works out for you.

FREDTHERED82

Thank you for your comments.

What is meant by the term creditors applying to the court for a 2nd charge, what would the first charge be? This has lost me slightly

enthusiasticsaver

WelshSaver wrote: »

Hi enthusiasticsaver I couldn't read your post and not reply. I just wanted to let you know that I made the decision back in 2011 to take out a debt management plan and it was the best thing I did. At the time my husband and I had about £1200 a month going out in secured loans and credit card debt. We were only maintaining it by putting our day to day living costs on credit cards, however they got to their limits and we had no other sources of credit available.

Life felt hard but talking to the experts about a DMP really helped and put our minds at rest. Studying to be an accountant at the time I couldn't go bankrupt or take out an IVA as this would have been detrimental for any career progression. We had payments set that we were comfortable with and all was good.

Fast forward to today. I am now divorced from my ex husband, the marital home was sold and by the time the secured loans and mortgage was paid there wasn't much left. I managed to arrange my own DMP for debt left in my own name and am down to £3000 remaining, which I am hoping to pay off at the end of this year. In the meantime I now have a better credit score and have been able to get a mortgage and purchased my own property this year. At the age of 47 I didn't think I would ever get on the property ladder again. I am much more careful with money now and the future is so much brighter.

Good luck with your decision and hope everything works out for you.

I am so pleased that it worked out for you in the end.

When it comes down to being forced to use credit to live then really some sort of debt solution is the only way forward. DMP, IVA or bankruptcy. It is a shame that so many people leave it until that point though.

enthusiasticsaver

FREDTHERED82 wrote: »

Thank you for your comments.

What is meant by the term creditors applying to the court for a 2nd charge, what would the first charge be? This has lost me slightly

The first chargeholder would be your mortgage provider.

If there is a lot of equity in a property then unsecured lenders may take the decision to take the debtor to court with the intention of securing a charging order on the property so if it is ever sold then they receive their money back. It is not common but does happen. It often depends on the amount of the loan.

FREDTHERED82

Thanks for the explanation, makes sense. Hopefully this doesn’t happen in my case

getmore4less

Simplifying you have £36k debt and £600pm(1.7%) that's less than a typical CC min payment.

Frozen interest it would take 5 years which is reasonable(max) time for a DMP.

That would need the SOA spending to be sustainable for that time.
I suspect anywhere you can cut back will just get absorbed by other things with 3 kids.

Your biggest potential to make the money situation easier would be increased income but that could(would) impact what I assume are tax/child credits in a way I don't understand.


For comparison(unlikely you could do it and not recommended anyway)

your current mortgage with LTV 60%

£85,000 2% £512pm 16y3m interest £14,600
over 16years the payment would be £518pm

if you added the £36k, LTV goes over 80% that would put up the rate to say 2.5%
£121,000 2.5% 16y £770pm interest £25,900


If you think a 5 year plan(with interest frozen) is sustainable it will probably be an option worth looking at, as at the end of it you would be in a good position to move forward.

FREDTHERED82

My DMP is now officially up and running, its a small step in the right direction but I am conscious that a CCJ or a charging order against my property is a real possibility.

Does the position become a little cloudy when all the debt is in my name but the property is joint?

Thanks for all the support thus far.