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Unable to pay secured loan - advice needed

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pepsimax25
pepsimax25 Posts: 5 Forumite
Name Dropper First Post

It’s a long story so in a nutshell…I’m a full-time teacher of 10 years, my husband has been a self-employed plasterer for 21 years. We are homeowners with a mortgage and two children. In April 2018 he caught some type of virus (undiagnosed) and this developed into an auto immune disease – we think Fibromyalgia but after 2 years we are still waiting for a final diagnosis.  He is unable to work, drive or do much at all due to the depilating nature of this illness. He applied for ESA and PiP in November 2018.  Both were declined.  Having always worked we were novices about how the DWP really operates so now we are in appeal process with PiP.  Husband’s income has been £0 for 2 years and we have had no help covering a two income household on one income with all the same bills and debts.

I’m getting to the point…what I need advice on is the secured loan we took out on our house in 2017 with the plan to re-mortgage and tie it in on a better rate later.  Of course, we have been unable to re-mortgage and I am now finding it impossible to pay £820 for the secured loan which is 40k on 34%APR plus my mortgage of £595.  I’ve taken payment holidays because that is the only ‘help’ we’ve had to take the pressure off.  We’ve had to borrow money from family to cover our monthly outgoings and this generosity can only last for so long.  We are in a DMP for unsecured debt.

Is there anyway to reduce the secured loan or anything to help us?  I know the differences and help for unsecured debt but what about secured debt?  I fear we will eventually have to sell our home because my husband is ill and there is NO financial help from the government.  We have tried turntous – no help. We get no tax credits and I earn too much (£40k)  for universal credit, carers grant etc. although I have been trying to run our home on £8k less per year.

 Please – is there any advice about how to deal with secured debt based on the information I’ve given?

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Speak to them and agree a repayment plan. It's all you do at the moment.
  • MinuteNoodles
    MinuteNoodles Posts: 1,176 Forumite
    1,000 Posts Name Dropper
    edited 29 July 2020 at 3:47PM
    Where is all your money going? My brother is also a teacher and has been for 10 years and is on the same amount. With a take home pay of over £2200-£2500 a month depending on pension contributions whilst yeah money would be tight with £1000 left after the mortgage and secured loan it's certainly do-able. Our household expenses for a similar household excluding our mortgage are £14k and that's including quite a lot of non-essentials that could be cut such as Sky TV, Netflix, Amazon Prime, running two vehicles, paying for caravan storage. If your children are adults then it's time for them to pay their way.
    You need to post on the debt free wannabe board, do a SoA (sticky howto at the top of the board) and people on there will tell you what to dump and what to change to save money. If you've a car on finance I would strongly consider handing it back regardless of consequences and getting a cheap banger to run around in. Whilst it won't look the best in the school car park it's much better than losing your home.

  • Shakin_Steve
    Shakin_Steve Posts: 2,813 Forumite
    Ninth Anniversary 1,000 Posts Photogenic Name Dropper
    Hi pepsimax, I really do feel for you, you are in a horrendous position. I can only see one way forward, and that is to negotiate with the lender. Ask them if they would consider taking a reduced payment and freezing the interest until your circumstances improve.
    You could post a SOA, but some people find that a bit too personal. There's not much the people on the debt free wannabe board haven't heard before, and they will do their best to help you. Also speak to CAB or a debt charity, either may contact the lender for you. Your pride may take a knock, but you've got to seek help with this.
    Good luck.
    I came into this world with nothing and I've got most of it left.
  • Where is all your money going? My brother is also a teacher and has been for 10 years and is on the same amount. With a take home pay of over £2200-£2500 a month depending on pension contributions whilst yeah money would be tight with £1000 left after the mortgage and secured loan it's certainly do-able. Our household expenses for a similar household excluding our mortgage are £14k and that's including quite a lot of non-essentials that could be cut such as Sky TV, Netflix, Amazon Prime, running two vehicles, paying for caravan storage. If your children are adults then it's time for them to pay their way.
    You need to post on the debt free wannabe board, do a SoA (sticky howto at the top of the board) and people on there will tell you what to dump and what to change to save money. If you've a car on finance I would strongly consider handing it back regardless of consequences and getting a cheap banger to run around in. Whilst it won't look the best in the school car park it's much better than losing your home.

    Hi, thank for this.  I appreciate what you are saying but £1000 for four people doesn't go very far as both my children are under 12.  After council tax we have £860, food shopping/school meals/household & hygiene items are about £110 per week that leaves us about £420 for gas, electric, water, petrol to get to work, car tax and insurance (I own my old car outright), DWP plan, broadband (we have cancelled Sky etc), buildings insurance, school uniforms, prescription costs because we are not on benefits which is just about covered.  There are no luxuries or non-essentials for us with this budget.
  • You don't have to justify yourself to anyone on here, take the advice @Deleted_User offered and speak to your lender, ask how they can help. 
  • You don't have to justify yourself to anyone on here, take the advice @Deleted_User offered and speak to your lender, ask how they can help. 
    Thank you.  As a newbie I really appreciate the support from people on the forum.  I wish I'd found it sooner.
  • sourcrates
    sourcrates Posts: 31,516 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 30 July 2020 at 12:24AM
    Can you please keep it to one thread, otherwise it gets confusing.
    thanks.
    I will close this one.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Dragonfly1
    Dragonfly1 Posts: 120 Forumite
    Ninth Anniversary 100 Posts Name Dropper
    edited 29 July 2020 at 10:33PM
    Where is all your money going? My brother is also a teacher and has been for 10 years and is on the same amount. With a take home pay of over £2200-£2500 a month depending on pension contributions whilst yeah money would be tight with £1000 left after the mortgage and secured loan it's certainly do-able. Our household expenses for a similar household excluding our mortgage are £14k and that's including quite a lot of non-essentials that could be cut such as Sky TV, Netflix, Amazon Prime, running two vehicles, paying for caravan storage. If your children are adults then it's time for them to pay their way.
    You need to post on the debt free wannabe board, do a SoA (sticky howto at the top of the board) and people on there will tell you what to dump and what to change to save money. If you've a car on finance I would strongly consider handing it back regardless of consequences and getting a cheap banger to run around in. Whilst it won't look the best in the school car park it's much better than losing your home.

    Hi, thank for this.  I appreciate what you are saying but £1000 for four people doesn't go very far as both my children are under 12.  After council tax we have £860, food shopping/school meals/household & hygiene items are about £110 per week that leaves us about £420 for gas, electric, water, petrol to get to work, car tax and insurance (I own my old car outright), DWP plan, broadband (we have cancelled Sky etc), buildings insurance, school uniforms, prescription costs because we are not on benefits which is just about covered.  There are no luxuries or non-essentials for us with this budget.
    Food: Aldi/Lidl. Use own brands rather than household brands.

    Broadband: ADSL for less than£20/month. Full fibre definitely under £30/month

    Mobiles: Get a SIM only deal for less than £10/month. You can get at least 20GB for this with unlimited minutes and texts. Make all outbound calls on your mobile, so you won't have a landline bill.

    If you get get more than a couple of prescription items, look at a pre paid certificate. If you get one per person, make sure you get 2 Month supply on a single prescription.

    What's your Gas/Tariff Standing Charges & Unit Prices exactly? What city do you live in?

    School often has a second hand uniform shop which is no shame to use. Get slightly bigger than perfect and they'll grow into it.

    The debt free wannabe forum will give loads of helpful advice with a proper SoA :)


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