Newbie - Determined but confused

Sueb1979

Hello I don't know where to start and apologise if I waffle. 
All of my adult life I have been in debt and had my head in the sand. I have got to 40 and for the last 3 months have been working hard on sorting out my finances. My credit files are embarrassing to say the least.  I have written down what's on there but I don't know what the best solution to this is so here goes:-
Kensington Mortgage - arrears £934 arrangement of £60 per month since January and up to date
Cabot (was Cap 1)
£366 last updated May 2017
Indigo Michael 
£233 last updated Dec 2018
Lowell
£1267 (vanquis) updated Nov 18
£1322 (catalogue) updated Dec 18
£398 (???) updated July 17
Virgin
£41 updated July 14
£276 updated August 15
Plusnet (arrears not default) 
£42 updated May 2020
EDF Energy 
£5995 - in arrangement 
Total: £10,874
I am still a customer of Plusnet and tried to call them to settle this account but they said it was sold 2 years ago but don't know who to, so stuck with that one. 
The £41 Virgin account to be honest is dropping off soon so I'm not worrying about it (I know that sounds bad and I am sorry)
My mortgage arrears are in an arrangement and I pay a little extra each month just £5/6.
EDF Energy have been amazing and am happy with the arrangement I have. 
Where do I go with the rest. My husband and I would love to move in 4 years time but I realise how important it is to be debt free when we finally start the process and I know to some it may not sound a lot but for me it is. 
We have some important things to pay for this year such as my father in laws headstone and new doors and windows ours are falling apart and I worry about the winter, but we will be paying upfront once we have enough saved.
We have about £150/200 a month that we can pay towards our debts but where do I start any advice great fully received.
What I am doing with our current bills is making a list each month and crossing them off as they are paid and since January everything has had a cross through it! 

monetxchange

Welcome! You're in the right place.

Would it be possible to compete an SOA of your households finances so everyone here can see where we can help you pay down the debt?

The biggest thing to me is that a lot of priority debt has been stacked up. Your mortgage and electricity are the absolute properties. Focus on the rest secondary (they are not secured on your home and as you say, some may become unenforceable soon - we'll cross that bridge when we come to it). Though if you're in comfortable arrangements to pay those, if you've got higher interest debt, it's best to tackle that first. An SOA would help us give more tailored advice.

What's the root cause of the debt? No need to be apologetic or embarrassed, many of us have been there. It's a very large mortgage debt to accrue in a two income household. Did I read it correct that you owe £6k on electricity? How on earth did that get built up?

Well done on taking the first step. Looking forward to hearing more so can offer my help. It's good to have the moving house thing as a goal - important to keep remembering you'll have a trashed credit file in that respect due to the arrears and will be unlikely to be able to move until it's all sorted.

Sueb1979

Thank you for your reply. I will try and get an SOA together over the weekend. 
How the debt accrued? It's been similar to this my whole adult life, we took on more than we could chew at young ages 19/20 and it spiralled. Back then it was easy to borrow off Peter to pay Paul and we got caught in a ruck that we just seemed to stay in.
We had beer money but a champagne lifestyle and we would not pay bills to do nice things. 
When we had our youngest nearly 15 years ago we had a £700 mortgage payment, only husband worked and earned £1100 a month and we had tax credits on top of that we borrowed from welcome finance (secured loan) and out secured bills were £920 a month. We were living well beyond our means.
Payday loans were our "saving grace" until payday when we were in a worse position than before and we took out loads. I am so thankful that these are now almost if not impossible to get which is our real saving grace! 
You read correctly my gas and electricity bill is just shy of £6K which spans just over 5 years and amazingly we have never had any legal action taken for this and it was me that approached them to resolve it. The honest answer to how bit got so high is I just didn't pay it like most things I just ignored/forgot about it when it wasn't in my face if that makes sense.
You may ask why now, well my father in law died suddenly in October and we have re-evaluated everything, we both gave up smoking, his death cleared £18,000 of our debt that he borrowed for us to get rid of 2 High interest loans, 1 with Amigo the other Advantage Finance. It just really hit home how we were borrowing of family every month to get by, that we were not living, merely surviving. And if we don't do something about it now we feel as if we are letting him down.
So that's our story and to sound really corny I want to change the middle to something happier!! 

zippygeorgeandben

Hi - doesn't sound corny at all - is husband on board?  Sorry to hear about your Father in law.

curlytop12

hope you manage to complete the statement of affairs, it will really set the ball rolling for advice and support on here,
good luck
PS. don't you have direct debits and standing orders set up for your bills?

monetxchange

Not corny at all. All very familiar stories on here and one a lot of us will have experience with.

So apart from the inheritance, have you got on top of things in other ways by addressing your spending and working out a budget? No worries if not there yet, that can be the next step. But it's important to accept now that these past behaviours need to be left in the past. For years I tricked myself into thinking my debt was inevitable, but the reality was it wasn't - I was just refusing to change. 

Like a previous poster said, direct debits for bills are an essential first step. Living month to month trying to see what you want to pay needs to be the first thing to go. Bills paid first absolutely every month without fail, food money and debt dealt with next. If they're direct debits, they can't be ignored or forgot about. An SOA listing all your monthly bills is a great way to have on paper what your minimum outgoings per month are.

enthusiasticsaver

It sounds like you need to get more organised with your finances.  An soa is a good place to start. I am amazed that you got to almost £6k in debt with EDF and that looks like your biggest debt.  The others are relatively small but you will not get decent borrowing rates while that is on your back so I would focus on saving for the most important things you need (windows and headstone). Moving will have to wait until the borrowing is clear. I would direct any spare money not being saved or paid towards priority debts like EDF and your mortgage (which should be an absolute priority) towards the smallest of those debts and knock them off one by one.  What about council tax? 

Fireflyaway

I can identify! I'm 40 too and what I decided to do upon turning 40 was to be more sensible financially! I was sick of always having debt and living payday to payday. The first thing was to never borrow again. I have promised myself I will not borrow or use credit unless for a mortgage. That's the only exception. Then I calculated what was coming in and going out. Identified where to make savings and then throw as much as I could at the debt. It's worth making offers to see if you can settle for a bit less if you can get a lump sum together. 
I too had big energy debts and had pre payment meters installed. At first I was against it, I felt embarrassed topping up at the shop. Now it's actually really helped. I'm much more mindful of the energy I use and the debt is automatically reducing. You can't avoid paying it back with a pre payment meter. Yes the energy might cost more but if like me you skip gas payments to pay other bills then it stops you doing that. 

ManyWays

Have you looked at if you can get any payday loan refunds? That would include Indigo Michael. Any refunds can help to pay off your mortgage arrears.