Last chance to sort out my life - debt

Startfreshstart

I have been here a number of years and I'm too embarrassed to use my usual name. 
The COVID situation has made me feel extremely stressed and insecure financially and I just want to sort things out once and for all. 
I have an ok job and ran a small but successful business business until recently, however it is currently no more and I do not know when it will recover to what it was. 
3 children and currently living with partner, we are probably as bad as each other with finance, we enjoy everything we cannot afford. 
I wanted to consider a DRO, but then again I owe more than 20k and I have a shared ownership mortgage, even with no equity I read that you cannot do this.
Therefore I'm thinking next about a full and final settlement IVA. 

Here is what I owe 

Barclaycard	£    7,000.00
Halifax Card 1	£    7,034.04
Halifax Card 2	£    7,268.34
P Loan	£    6,189.54
HMRC Overpayments	£  12,000.00

And this is what I have to pay monthly for the above 

£  750.58  After my earnings and expenses, I have minus £106 pounds. Which is probably why I can never move forward.  I'm desperate to buy a new house, which I can afford because I currently pay part rent which is extortionate. The above debt is stopping this. I also have both of our PCP cars in my name, we drive far to work and use the cars in a professional role, so it would be really necessary to retain them.  I'm in two minds if I should just take the IVA and it's done once and for all, and try to apply for a mortgage shortly after, or I don't take the risk and try to pay this pay -not sure how and how many years it will take me.  Any thoughts or suggestions or experiences will really help me.

 

sourcrates

Hi,

You mention full and final settlement IVA, where is the money to come from for this lump sum ?

There are two basic types of IVA, a standard IVA where you make monthly payments, or a full and final IVA where you ask your creditiors to accept a lump sum in final settlement of the debt.

To which are you reffering here ?

Andyjflet

Tough love from me, it seems that you really cant afford to buy a house at the moment, you have no money.... therefore you need to get straight first and foremost, stop spending, make a strong budget and then start paying off your debts in a snowball method after putting away and emergency fund of £1000

Startfreshstart

Thanks both, I should mention I have paid it all off before - maybe 2 or 3 times. And then I start again, I don't know why because it causes me so much stress in the end.
I was hoping for full and final, because I hat the idea of being still in debt. And I wanted to hope I could mortgage a property after a few years have passed, with a subprime lender. The reason I think I can afford this is that I pay £700 rent, on top of my mortgage - when I look at mortgages even high interest it works out cheaper. 
In terms of the money, my brother owns a small business and can give me the lump sum, I know it's a lot of money but I'm expecting it will be far less than the full balance. 
I hate the idea of having poor credit, but equally I'm so stressed and just want a way out quickly and to feel happy when I open my mail or look at online banking. 
I understand the snowball process, and would look to do this, if you think the IVA is a bad idea for me. Some of the debt came from business, I put several thousands of pounds onto personal credit cards temporarily, and well you can guess the rest! 

Thanks so much. 

RobM99

"...we are probably as bad as each other with finance, we enjoy everything we cannot afford."
I don't mean to rain on your BBQ but this says a lot. You need to address this before anything else (in my view).

Danni-R

Hi! 

Can you post a SOA as it's not clear are you living with your partner in your shared ownership place? 
If your brother can help with a lump sum could you not tackle one debt and work on the others. 
I don't think trying to get the quickest/ cheapest way out of this is going to help you going forward because it's not going to give you time to learn how or why you've managed to overspend by so much (close to £70k?)

Startfreshstart

Sorry I should have said I cover all of the costs, my partner works part time and she pays some of the rental amount and covers food and anything that isn't listed. 

Credit Card	£     197.68
Car Lease	£     253.78
Mobile Phone Contract	£        71.00
Overpayment HMRC	£        30.00
Car Insurance	£        12.99
Union Membership	£        22.50
Rent share	£     448.93
Credit Card	£        65.00
TV L	£        13.00
Council Tax	£     130.00
Sky TV Contract	£     115.98
Car Lease	£     267.59
Mortgage	£     133.76
P-Loan	£     246.90
Pet Insurance	£        41.80
Car Tax	£        26.00
Energy	£     130.00
Pet Insurance	£        91.69
Credit Card	£     211.00

Income                            £2400 

Really appreciate that I need to re-educate, but I have been doing so on and off for over 10 years. I'm tired now and just want to make progress and sort this out. I do understand it's my own fault - but now I want to change it
Thanks all 

Startfreshstart

I forgot to mention all costs are mainly contractual or under agreements. 

jjdc

That doesn't even look close to being a full SOA.

https://www.lemonfool.co.uk/financecalculators/soa.php

monetxchange

I'm sorry to hear about your business. It's been an awful time for so many and I hope you can bounce back.

Tough love time. Your mobile phone and Sky TV are through the roof. Both are luxuries you can't afford. Reduce them ASAP. I have an £8 SIM free phone and just watch Netflix at 7.99 a month.

Energy seems very high for two of you. Are you being frugal with it, turning stuff off, not having hot water and heating on unnecessarily? I'd bet there's some gaps in here too to explain how the debt was ran up. It would be best to sit down with your partner and get a true picture where money goes - you might be surprised on how much they have to spend on groceries for example.

You've said it yourself - your spending has got you into this. Only budgeting will get you out and carry on debt free in the future.

Your income isn't massively high, so being frank, I doubt you both need to be driving fancy top of the range cars to maintain a professional image as your income doesn't reflect this lifestyle. Are you now without work? Can you go down to one car or one and a cheap run around?

I'd also think you just have to accept the less than ideal part buy part rent situation. Being honest - was this rushed into as you couldn't wait to save up more for a full/equity loan mortgage or it was unaffordable? You're very unlikely to get far with mortgage providers right now with large debt, shaky work situation, no savings, a potential IVA marker and I'm guessing a bit of a potted credit file if you've been here three times.

Make it your focus though - the harder you work to clear this debt the sooner you're out of there. I'm in the same position myself - living somewhere I don't love but saving every spare penny to avoid the shared ownership route.

I really hope it works out for you this time and you can accept that you can't borrow and finance your way to a better (whatever that means) lifestyle. Imagine how much nicer your life would be if you were debt free and stable instead. Let that be your goal!

warby68

If you've done the same thing 3 or 4 times now, its important to start living within your means and breaking the spendy habits. 
I actually think that takes priority over the immediate debt solution. 
You want to see what you can afford with a realistic and complete budget to see what solution is best. 
Your income isn't huge for level of commitments you have against it and your SOA is far from complete - not a penny for children, entertainment, your own personal needs etc . It would be better to see the whole household SoA  not just your own bit to give better advice. 
You actually sound like you want a 'magic wand' cut price escape from your debts - are you sure that isn't because you actually want to carry on the lifestyle without much actual change? Borrowing from family is rarely advisable, presumably this would be another loan not a gift so you would still be in debt and have the extra pressure that comes from not wanting to let family down.
Take your time, do a proper drains up on the household SoA and set a budget, then see what the advice is.