Please help ...

Daisypalpaisy

Hi everyone, 
I’m new to this and feeling in a pretty low place. To cut a long story short, we recently bought a house which we renovated. We were lucky enough to have a lump some of cash to do this with as we had saved and had equity from a house sale. Whilst doing the renovation, we took advantage of a few interest free deals to be able to use our lump some on other things. I noticed the money was dwindling and became worried we weren’t going to have enough to complete the house. In this time, my husbands behaviour had changed. He was loosing weight, on edge and stomach upsets. He ended up losing his job. He got another one within a few months but he had a break down one evening and told me that he had some time ago lent some money to help what he thought was a friend. This had spiralled out of control to the point that he ended up drawing money out on the credit card to try and pay the bill. This had then turned into getting a loan to try and cover it. It all came out and now the situation is we have this huge debt to try and pay, as well as other debts we had agreed to whilst renovating the house. The job loss and now furlough have meant a huge decrease in monthly income. We are now constantly in the over-draft, no savings to have as a fall back. We have all these debts to pay and I’m living with anxiety that I am struggling to manage. 

My husband had spoken to step-change who advised contacting the mortgage company. They gave us a holiday period but now are saying the mortgage is £5000 in arrears. I feel like I can’t live like this any more. 

We have a young son and I feel so much guilt for not being able to have money free to do the things I would like to do with him. There’s no way we could go on holiday or take him to places he would love to go. 

My thinking is to sell the house we currently live in. We would have around £100k in equity. This would enable us to clear all debts we have and have hopefully a nice pot of money in our savings. Because of the mortgage arrears, I’m guessing we would not be able to get another mortgage initially so my thinking is to rent a house that my parents own for a lower amount enabling us to be debt free but then also save again and build our credit ratings with the hope that within a year we would be able to start over in a more affordable house. 

I know this is drastic and it’s not something I’ve come to lightly. I just want to be able to live without these constant worries and know that I have a nest egg as a fall back. 

Any advice would be greatly appreciated. 

Thank you. 

fatbelly

OK. A few thoughts as I read your post.

Your husband has had issues with his mental health and needs help with this . I hope he is getting it. You may need this too. Debt is the easy bit to deal with and the less important compared to your health, though they may be intertwined a bit.

You must understand that there are priority and non-priority debts. Mortgage is a priority, credit cards and unsecured loans are non-priority. So I wonder if you turned all your resources to the mortgage, could you pay it?

You need to be claiming the benefits to which you are entitled (Turn2us) and there is ssome help for mortgage holders though Support for Mortgage Interest (which these days is a loan, but it's worth looking at)

If you're not sure abuot the numbers you could post statement of affairs using this calculator (format for mse) and we could have a look.
https://www.lemonfool.co.uk/financecalculators/soa.php
If you definitely cannot pay the mortgage then it is better to sell in the market (not that there is much of one at the moment) rather than have it repossessed.

As for the non-priority debts they would have been long defaulted by the time you get to that stage, the damage will have been done to your credit history and (every cloud has a silver lining) the companies that have bought those debts would accept a reduced sum in full & final settlement.

sourcrates

Currently you can get 3 month payment holidays on all unsecured borrowing, as well as your mortgage, but you must cite covid-19 as a reason, otherwise it can be recorded as just non or late payment.

The forums are full of stories of people lending money to so called freinds, who then turn out to be anything but, there are things you can do to persude them to pay up, it depends if the threat of legal action would ilicit some positive responce, or not.

Fatbelly sets out the stall nicely above, as to your options.

trex227

I didn’t want to read and leave without commenting- selling should be the absolute last resort and from what you’ve said it sounds like you have other options. Don’t forget selling and moving into rented will cost money.
Post a SOA as fatbelly says and the great people on here will get you on the right track 🙂

Daisypalpaisy

Firstly, thank you all so much for taking the time to reply. I definitely agree about the issues surrounding mental health. I will have a go at filling in SOA in the next few days to see what people could suggest. We’ve decided to go ahead with selling our house not only to help the situation we are in but having reassessed what we want from life, to be able to have a more affordable lifestyle. The house we currently own is large and expensive and we think downsizing will be the best thing for us to do long term. 

Thank you very much again for all of your advise thus far.