SOA, it's all a mess and I think we are in too deep

YORKSHIRELASS

Hi all, thanks so much, so lovely to have helpful positive comments.  The Mortgage Reserve has no minimum repayment, which is part of the problem, we have stuck our heads in the sand paying just a small amount off this for years.  In theory we could pay nothing towards it for a year or two and clear some of the other debts, but this seems really risky as it has to be cleared at the same time as the mortgage.

EimearF

I understand you concern about not paying but you are currently falling short on you current required payments to make this optional payment. If you cleared you other debts you could shift your entire focus to the mortgage reserve and clear it in time. 

RAS

YORKSHIRELASS said:

When DH and I were on our own we were managing groceries for £200 a month.  Eldest son does need to contribute something out of his sick pay and we need to have a chat with him, youngest son being here is only temporary.  I might be able to do food shopping for less than £350, especially with food shortages at the moment!  We need 2 cars, no public transport of any sort where we live.  The £125 is for landline, all 4 mobiles, and internet.  Again we need to get the boys to pay for their own mobiles.
Its a scary thought but I need to do something now before things get any worse.

Was about to post the same suggestions but need to clarify a few things:

is it a requirement that you all lockdown for 12 weeks, bearing in mind that this could go on a lot longer. Or is it possible for DD1 to self -isolate? Just reading a story by someone with stage 4 breast cancer in treatment at the moment, she's keeping 2 metres distance from the kids but still living with family.

Realistically how likely is it the DD2's university will allow him back any time soon? Doubt anyone is going back until the end of September. Once his assignments are finished, he needs to get out there and get work, One family I know with a vulnerable parents have moved DD2 in with her sibling for the duration, is there anyone DD2 could live with similarly?

Menu plan; everyone to contribute ideas; this isn't your responsibility, it's the whole family's. You should be able to cut back substantially. And consider that this will teach DS1&2 essential life skills.

And add basics, like full loads of washing, no snacking at will, turning everything off, accepting limits to internet usage. 

YORKSHIRELASS

If DS1 gets the coronavirus I cant see him surviving it, he was on immunosuppressants for 7 years before having chemo.  He has no immune system and having nearly lost him in December I am not taking any chances, so yes we will be in lockdown for as long as possible.  The advice from DS1s consultant was that everyone in the household should be self-isolating alongside DS1 because of his health. 
In theory DS2 could go and live with his grandparents but they are both 80 so there are risks there.  We are waiting for uni to confirm but I dont think he will have to continue paying rent and he is still receiving his student loan so could contribute something from that.  In July he takes on his accommodation for next year so he will have to go back then and work.     
There is no snacking, I do the mealplan because I am in charge of the food rationing!  This is working really well.

EimearF

Yorkshirelass, I saw on the emergency fund post that you are planning on defaulting on your unsecured debts and managing your DMP yourself.
I really think you need to speak to a professional re the DMP, contact stepchange. A lot of advice you are getting on here is based on the mortgage reserve being a necessary monthly payment, which you have clarified that it isnt.
You could end up defaulting and having all your creditors reject your DMP plans as you actually do have enough money to make all your payments by not making that optional payment. 

YORKSHIRELASS

EimearF said:

Yorkshirelass, I saw on the emergency fund post that you are planning on defaulting on your unsecured debts and managing your DMP yourself.
I really think you need to speak to a professional re the DMP, contact stepchange. A lot of advice you are getting on here is based on the mortgage reserve being a necessary monthly payment, which you have clarified that it isnt.
You could end up defaulting and having all your creditors reject your DMP plans as you actually do have enough money to make all your payments by not making that optional payment. 

Thank you, that's really helpful.  I didn't understand this.  I did a snowball calculation and paying minimum repayments with current interest rates and nothing towards the mortgage reserve it would take nearly 4 years to clear the debts, which would then leave the mortgage reserve unpaid when the mortgage ended.  Is it possible to get out of this without a DMP?  Could we just keep going, use any balance transfers that we have available to cut down the interest and hope that DS1 can get back to work and contribute something, or is this unrealistic?  Should we try and add the reserve to the mortgage?  I think we probably do need to talk to someone about our options.

EimearF

It is not the ideal choice but you could remortgage at the end of the reserve period on to a repayment option. At that point your regular mortgage and debts will be gone and your credit rating will be in a really good place to get a good rate. 
Are you in MSE credit club? It will show any cards you are likely to get with 0% balance transfers, which might take a little pressure off. 
I would suggest focusing on the smallest amounts so that you clear that credit line and free up more money each month. Dave Ramsey recommends this approach because it gives you the quick wins you need to keep motivated. I did it initially with furniture finance and going from 15 credit lines to 10 was like someone lifting some weights off me! 
Dont pay anyone to discuss DMP etc there are free services. Its worth having the conversation with them to see what your options are. 

fatbelly

As I said before if you're looking at a dmp, the options  are: Stepchange or Payplan or do-it-yourself. As Eimear says there's no harm  in researching these.

Just bear in mind that if you're doing anything mortgage-wise, do it now while your credit history is (relatively) good. Once you are in a dmp all the non-priority debts get defaulted.

I'm not sure if you are considering debt consolidation (moving non-priority debt to priority). That is not recommended due to the  increased danger to your house. However moving priority to priority (secured overdraft to mortgage) or priority to non-priority (secured overdraft to personal loan) is an  accepted tactic

EssexHebridean

Loads of good advice here already as always. Fatbelly makes an excellent point above above unsecured & secured debts - definitely take note of that.

As far as DS2 goes, he would be paying for his food if he was at Uni, so presumably he can contribute the same amount back to your household now he is at home? 

You mentioned balance transfers in a post above - have you checked to see if you DO have any of these available? With a combination of those and removing the optional payment where would that leave you in terms of managing things? It may still be that a DMP is the right way forwards but it never hurts to explore all the options. I agree that speaking with Stepchange may also be a good way forward for you.

YORKSHIRELASS

Thanks all, some really good advice, very grateful for your help.  Bizarrely the current situation is going to help us a little, I am currently not using my car so that's £120 saved, DH can continue doing some work (unless the government issue further restrictions) and also claim the 80% self employed help, and both boys are now going to contribute something.  I am also due a small pay rise.  DH has a £5k money transfer available on his Virgin card which has a hefty 4% fee but gives us two years interest free.  We are going to use that to clear the Next account (and cancel it) and also the Halifax card with the highest interest.  I have been really worried about not clearing the Mortgage Reserve in 4 years, but if we can keep our decent credit history then we could borrow something to cover whatever is left (although I know that's not ideal).  I think the plan now is to have 6 months of not paying the reserve, budgeting really carefully, taking advantage of every balance transfer we can get, trying to increase our income and seeing where that leaves us.  If at the end of that period we know we cant make it work then we will go to Stepchange for advice, and may think about adding the reserve to our mortgage.