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Sinking - Need advise on way out of debt.
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Richmc1983
Posts: 56 Forumite

Good Evening all,
I currently bought a new house just before xmas 2019 and was awaiting on the sale of my current house at the time but that fell through and due to COVID there has been zero interest and i am struggling with all debts.
I have approx £100k unsecured debt along with a 2nd mortgage. My outgoings are alot more than my incoming and i honestly dont know best way forward. I live in scotland not sure on best way to approach this and want to try sort something out.
Thank you in advance for any replies and help.
I currently bought a new house just before xmas 2019 and was awaiting on the sale of my current house at the time but that fell through and due to COVID there has been zero interest and i am struggling with all debts.
I have approx £100k unsecured debt along with a 2nd mortgage. My outgoings are alot more than my incoming and i honestly dont know best way forward. I live in scotland not sure on best way to approach this and want to try sort something out.
Thank you in advance for any replies and help.
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Comments
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First thirst things first complete and post an SOA: https://www.lemonfool.co.uk/financecalculators/soa.php
Then people will be able to advise. Could you let your old property?August 2019: £28.8k
November 2020: £0 (0% interest)
My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320
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I would recommend:
1. Try and rent out one of your properties so you can attempt to get income in to help cover the mortgage.
2. Have you had any assistance with your debts and consolidation of them? Worth reviewing which ones have the greatest interest charges and focus on them. Money advice service website has some useful guidance.
3. Review your current outgoings and bills, can you stop any unnecessary subscriptions or payments? Are you able to get better deals on your utilities etc?
4. have you considered what ways you can generate extra income, is it possible to get a 2nd job?
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Hi all. Thanks for reply.1. I looked into renting out property and would need to spend money to get it upto scratch for renting and also means rent would be less and hard to get due to size of house and area.2. 2nd job is no option as already work away from home
3. unable to change anything as looked into outgoings and already cancelled everything i dont need.4. I really am stuck and unsure on how to approach creditors regarding this?0 -
If you take your old property and the mortgage payment out of the equation, can you manage your income / debts?
If so, how much mortgage is outstanding on the property and what have you listed it for sale at?
Also, please do create the statement of affairs as that way we can help you work out what debt payment options are suitable.Mortgage started 2020, aiming to clear 31/12/2029.1 -
Richmc1983 said:Hi all. Thanks for reply.1. I looked into renting out property and would need to spend money to get it upto scratch for renting and also means rent would be less and hard to get due to size of house and area.2. 2nd job is no option as already work away from home
3. unable to change anything as looked into outgoings and already cancelled everything i dont need.4. I really am stuck and unsure on how to approach creditors regarding this?
You need to identify the Non-priority creditors and if things are tough, prioritise the priority ones0 -
Household Information
Number of adults in household 2 Number of children in household 2 Number of cars owned 0 Monthly Income & Expense Summary
Monthly Budget Summary Amount(£) Total monthly income 4,800 Monthly expenses (incl. HP & secured loans) 4,650 Available for unsecured debt repayments 150 Monthly Income & Expense Details
Income Amount(£) Monthly income after tax 4800 Partners monthly income 0 Benefits 0 Other income 0 Total monthly income 4800 Expenses Amount(£) Mortgage 1666 Secured/HP loan payments 1200 Rent 0 Management charge (leasehold property) 0 Council tax 219 Electricity 76 Gas 73 Oil 0 Water Rates 0 Telephone (land line) 0 Mobile phone 98 TV Licence 13 Satellite/Cable TV 0 Internet services 0 Groceries etc. 200 Clothing 0 Car expenses (fuel, tax, insurance etc.) 300 Other travel 150 Childcare/nursery 250 Other child related expenses 200 Medical (prescriptions, dentists, opticians etc.) 0 Pet Insurance/Vet bills 0 Buildings & Contents Insurance 25 Life Assurance 180 Other Insurance 0 Emergency Fund 0 Total monthly expenses 4650 Debt Details & Offer to Creditors
Secured & HP Debt Description Debt(£) Monthly(£) Mortgage 370000 (1666) Secured Debt 300000 (1200) Secured & HP Debt totals 670000 - Unsecured Debt Description Debt(£) Offer(£) HSBC Loan 21500 34.9 HSBC Loan 7500 12.18 Leaseplan Van 0 0 Overdraft 5000 8.12 Gym Equipment 4500 7.31 Lloyds Credit Card 11000 17.86 Lease Car 0 0 MBNA Credit Card 9000 14.61 MBNA Credit Card 15000 24.35 Tesco Credit Card 9000 14.61 HSBC Credit Card 7900 12.82 Sainsbury Credit Card 2000 3.25 Unsecured Debt totals 92400 150.01 0 -
Hi
Glad you came back! Any move on the house sale????
There is some key info missing - which is your assets (the value of your properties, plus car). Since your question resolves around a house sale (partly) I think people will need this to help.
Aso your unsecured debt seems to have formatted strangely - is that the APR that is showing? What are the monthly minimum payments?
Are business debts included here? I see van lease and gym equipment....are these personal debts or business debts?
The solution comes from looking at these details, so you will get good advice when you can fix the info missing.
March 2020 - 21k of debt; September 2020 - 14k of debt. Debt free target date September 2021
Diary of paying down debt whilst living abroad:https://forums.moneysavingexpert.com/discussion/6181237/5-000-miles-and-even-more-pounds#latest0 -
First thing is it right your partner has no income? Could they get a job even if it's part time? You mention childcare costs so if their not working could that be saved?
Mobile phones seem very high so could you go sim only to save money?
You have car expenses but state no car. Is this an error? You also have £150 in other travel expenses, could this be reviewed?
Life assurance also seems very high. Have you looked for a different policy?
You mention another property what is the mortgage on it and what is up for sale for? It may be worth dropping the price so it is sold as I assume the secured debt payments would stop so you could then use that for your other debts.
You mention arrangements or offers to your unsecured debt was this done via a DMP? If not it is probably worth talking to Stepchange about your options.1 -
Are you really paying a £180/month premium for life insurance??0
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Is the groceries spend realistic, or just what you think it should be? If your partner is the stay at home parent, I'm sure they'd be able to tell you the figure is probably much higher for two adults and two kids. £200 would be beans and rice level, and looking at your other expenses and accrued debt I would hazard a guess that you don't keep a tight rein on spending even on food. Same goes for the £0 clothes budget. Impossible with two kids. Is this simply expenses you don't think of as existing as it gets stuck on one of the credit cards and forgotten about?
Not a criticism - it's just important to be honest at the start so you don't under budget and fall at the first hurdle.
Like others have said, there's so much that can be trimmed on wants rather than needs here. You need to cut back to bare bones level on things like phones and petrol etc. Main thing is your partner needs to work. Do alternate shifts if you must. You simply can't afford this lifestyle on a single income with multiple properties etc.Debt Free: 06/03/2020 Highest Debt: £37,5140
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