Debts unmanageable after disability forcing 50% part-time.

joey2307

Okay this is a long story so I’ve tried to bullet point the key things - and it’s still long!

First though I should stress at this point in time I/we are not in arrears on any accounts and are not being chased for payments, no bailiffs, etc.
We are trying to take early action for a “worse case scenario” but hope this does not come to pass.

£32k of unsecured debt, £90k left on mortgage, house value £190k.
£800 overdraft not currently being used.
No savings, little of substantial value to sell.
Unsecured debt is £14k personal loan, rest across various credit cards - all 0% balance transfers with 10-12 months left on each.
My salary was £43k and although we had to be tight at times debts were manageable and at least minimum payments were being made. (Still are).
Had successfully transferred balances to new 0% credit cards when promotional periods ended and aim was to continue doing such.
My wife does not work, hasn’t done for 7-8 years and is unfit to do so due to long standing mental health issues. We have no children and have managed comfortably on my salary.
After ongoing health issues of my own I had operation in 2017 to remove tumour from neck, left me with disability of a quiet voice and associated swallowing/digestion issues. Apart from the voice (and scar!) I appear fine.
I am a teacher. Somewhat embarrassingly, for mathematics!
Unsecured debt has a long history and is somewhat related to wife's mental illness.
I returned full time 2018-19 using a voice amplifier to teach but struggled with some aspects of the job, partly due to getting very bad stomach pains - suspected trapped wind from issues around swallowing and taking on too much air. Hospital investigated and found nothing untoward. Buscopan and peppermint tea do little or nothing to ease symptoms.
As a result I went 50% part time from Sep19 teaching VI Form only as this was part of my job that is manageable with my disability and stomach pains. In fact stomach pains are still a daily occurrence but only at work - not at home.
I have been searching/enquiring about teaching VI Form only elsewhere - either in addition to current role or full time alternative - so far unsuccessfully. Tutoring (inc online) is an option but unlikely to replace previous income, not in short term anyway.
We anticipated finding additional/alternative employment would take time and so saved some funds but these will run out Jan/Feb20. Debts at this stage become a massive burden.
We didn’t anticipate finding such employment would take so long or be as problematic.
We could manage on my part time wage, certainly in the short term, just, by cutting back luxuries (happy to do this) if mortgage payments remained roughly the same but we had no other debts.
Did an online query/budget with StepChange and the recommended solution was a Debt Management Plan (DMP). I believe this is a temporary measure until our financial situation improves but the downside is it can have a knock-on effect for six years?
Also contacted L&C regarding remortgaging and will speak to them later today. I have read the MSE guides on warnings about going down this route to clear debt.
Am also visiting CAB today for advice.
Have not committed to anything yet, the job search is ongoing but the worry is constant and I’m getting very concerned.
Any advice, tips, suggestions and experiences welcome.
Equity release not an option as we are both under 55. I was advised ill-health retirement (even the “halfway” option of being able to work, but not teach) is virtually impossible to obtain unless you are terminally ill.
My 50% salary is too much to be able to claim benefits,
Live in rural England so car essential, moving a possibility but timescale vs debt-problem is unrealistic and for family reasons would not want to move far.

I hope I’ve given enough information. I realise this is a not-at-all-bad scenario compared to all the things we hear about from Martin and the MSE team but am seeking to get as much info and advice as possible before it gets to a critical situation.

Thank you for reading this and any advice, suggestions, experiences you are willing to share will be much appreciated.

Even if this inspires just one person to take early action on solving their debt, or potential debt issues, I will be a happy man!

[Deleted User]

Hi Joey, I didn't want to read and run. Welcome to DFW and I know when everyone's up and about you'll get some really useful information to help you sort out your financial situation.

In the meantime, I'm not sure if you know about the charity Education Support Partnership who offer advice, support and grants to anyone working in education.

https://www.educationsupport.org.uk/

bln x

fatbelly

If you want detailed advice you will have to give us a statement of affairs

https://www.lemonfool.co.uk/financecalculators/soa.php

but you have given enough detail to make some comments.

Credit cards are non-priority. They will not cause you to lose your house. They can go to token offers or zero offers if necessary. The mortgage is priority.

So please don't transfer the credit card non-priority debt to the mortgage.

I am concerned that you will be able to get to the end of your mortgage - how many years left? As your credit history looks good at the moment this is the time to get the best remortgage deal that you can.

joey2307

Thanks, didn’t expect replies so soon! Much appreciated.

Mortgage wise we are nearly two years into a three year fixed (early repayment charge drops from 2% to 1% in Feb20) and there’s about 18 years left on it in full.

The once held aim of getting that paid early is seeming like a distant memory these days! But can’t complain compared to what many folk are going through.

Yes credit history good at moment, noticed scores beginning to drop slightly since part-time salary filtering through to their radars.

Didn’t know about Education Support so that’s another avenue to explore thanks.

fatbelly

Your salary won't affect the credit score, which is pretty meaningless and changes like the weather. As long as you are making the minimum payments and are on the electoral roll, your history is not going to be a problem, though obviously your income will affect what deals you are offered for a remortgage.

You have 100k equity which is your strong card

Karonher

Obviously you will know best, and no need to answer here, but is there nothing that your wife could do? A bit of volunteering for a charity may lead to experience and a paid position - I realise that this will not be much help in the short term. Could she work online - surveys or maybe a bit of mystery shopping if she does go out? Neither are the full answer but could bring in a little extra a month.