Sinking - Need advise on way out of debt.

Richmc1983

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.

ryanm8655

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?

bill_ninja

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?

Richmc1983

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?

MovingForwards

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.

fatbelly

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?

It's a case of working out what you can afford to pay, and not paying the rest. So you need to prioritise. If you post a statement of affairs we can help.

You need to identify the Non-priority creditors and if things are tough, prioritise the priority ones

Richmc1983

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

Smashingitnow

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.

ElizabethRose

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. 

TheAble

Are you really paying a £180/month premium for life insurance??

monetxchange

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.