My SOA details and very large debt!

Stevev99

Ok, some of you may remember me since I went through some terrible times telling my wife that I had about £55,000 of debt. She has calmed down a bit although still has days every now and then when she vents at me and says some horrible things. But she's still here which is the main thing...

I just want to check now I'm on the edge of deciding to go down the DMP route with CCCS. Is this definitely the right route or should we contemplate trying to remortgage? I'm petrified of getting attachment orders or bailiffs coming round since i think it'd finish the wife and our marriage off!

Here's my SOA anyway for comment;

Income (joint) £2900

Debts

Amex CC £5600 - £130 per month
RBS Loan - £21,000 - £389 per month
RBS CC - £6500 - £140 per month
Egg Loan - £11,000 - £204 per month
M&S CC - £6000 - £140 per month
Barclaycard - £3000 - £78 per month
RBS Overdraft - £2000

Total £55,100 & £1080 payments per month

Leaves about £1700 per month however;

Mortage £125,000 at £871 per month (fixed in)
Child Maintenance £400
Car HP Me (£4700 left) at £78 per month
Car HP Wife (£4000 left) at £99 per month (we both have to drive to work)
Council Tax £136
Gas & Elec £65 per month (lowest in area I've checked)
Water £65
Telephone/Mobile/Internet - £25
Satellite - £10
Life insurance - £15
Motor Insurance - £60 per month
Food - £300
Clothes/Shoes etc. £50
Petrol - £110 per month
Misc items (as CCCS calls them like hair, medicine, Dentist, school meals etc..) are £62 per month
Buildings/Contents insurance - £30 per month

So that's £2376 for essentials i guess which means there's about £600 left for the debts which come to over £1000!

There's about £85,000 equity left in the house and I'll have some shares maturing in about 4 years which currently would be worth about £25,000.

So what do you reckon?

Do I go down the DMP route or remortgage and then pump in the maturing shares in 4 years? I know all the about the dangers of remortgaging and secured loans and the danger of being enticed into using CC's again but I'm in a real dilemma.

I think my wife prefers the DMP route but she's petrified of all the defaulting, inevitable letters and possible CCJ's etc... It's been horrible around here as it is and she keeps bringing up all the mistrust and hatred remarks and I honestly don't think she could take the inevitable phonecalls and possible knocks on the door!

I honestly don't know, I guess I would like to try and avoid the DMP route but if the general concensus is that a DMP is better than have a great big mortgage then maybe that's the way to go????

Thanks folks.

Homework

If you stay on DMP and let CCCS clear it with full and final settlement with your share money you will still have your equity left for the future.

I think if you are in debt borrowing more does not help, it puts more pressure on you and you are diverting your short term debt that a DMP will give you time to pay and risking your home on it. £55000 is a lot of your equity especially if house prices change.

I'm sure there will be some experts on soon who can advise you more.

Scarlett.1974

Stevev99 wrote: »

Ok, some of you may remember me since I went through some terrible times telling my wife that I had about £55,000 of debt. She has calmed down a bit although still has days every now and then when she vents at me and says some horrible things. But she's still here which is the main thing...

I just want to check now I'm on the edge of deciding to go down the DMP route with CCCS. Is this definitely the right route or should we contemplate trying to remortgage? I'm petrified of getting attachment orders or bailiffs coming round since i think it'd finish the wife and our marriage off!

Here's my SOA anyway for comment;

Income (joint) £2900

Debts

Amex CC £5600 - £130 per month
RBS Loan - £21,000 - £389 per month
RBS CC - £6500 - £140 per month
Egg Loan - £11,000 - £204 per month
M&S CC - £6000 - £140 per month
Barclaycard - £3000 - £78 per month
RBS Overdraft - £2000

Total £55,100 & £1080 payments per month

Leaves about £1700 per month however;

Mortage £125,000 at £871 per month (fixed in)
Child Maintenance £400 - this is a hell of a lot, how many children is this for?
Car HP Me (£4700 left) at £78 per month
Car HP Wife (£4000 left) at £99 per month (we both have to drive to work)
Council Tax £136
Gas & Elec £65 per month (lowest in area I've checked)
Water £65 - wow, this is VERY high, why so much?
Telephone/Mobile/Internet - £25
Satellite - £10
Life insurance - £15
Motor Insurance - £60 per month
Food - £300 - how many is this for? If it's just the 2 of you this can be cut back loads. I spend £260 a month for 5 of us and 1 cat!
Clothes/Shoes etc. £50
Petrol - £110 per month
Misc items (as CCCS calls them like hair, medicine, Dentist, school meals etc..) are £62 per month
Buildings/Contents insurance - £30 per month

So that's £2376 for essentials i guess which means there's about £600 left for the debts which come to over £1000!

There's about £85,000 equity left in the house and I'll have some shares maturing in about 4 years which currently would be worth about £25,000.

So what do you reckon?

Do I go down the DMP route or remortgage and then pump in the maturing shares in 4 years? I know all the about the dangers of remortgaging and secured loans and the danger of being enticed into using CC's again but I'm in a real dilemma.

I think my wife prefers the DMP route but she's petrified of all the defaulting, inevitable letters and possible CCJ's etc... It's been horrible around here as it is and she keeps bringing up all the mistrust and hatred remarks and I honestly don't think she could take the inevitable phonecalls and possible knocks on the door!

I honestly don't know, I guess I would like to try and avoid the DMP route but if the general concensus is that a DMP is better than have a great big mortgage then maybe that's the way to go????

Thanks folks.

Hi Steve, I've posted a few comments above, I hope they help.

I can sympathise with your wife because most of our debt is down to my H (I'm hesitant to use the words 'fault' or 'blame' but......) and there's been times that I've resented him a LOT.

I'm no expert, but the one thing I will say is do NOT re-mortgage and turn your unsecured debt into secured. Really, don't do it. We did this and it went very wrong and the short story is our house is now being reposessed, we're going BR and moving into rented after xmas.

Re the DMP - well, you would have a decent amount to pay into this, around the £500 mark, so you might well find your creditors don't give you too much grief (we were in a DMP and paying £220 to cover £70k of debt and 'most' of our creditors were accepting this). You could maybe do the DMP until your shares mature and then use this money for full and final settlements, possibly then leaving you debt free in 4 years One thing though, you absolutely MUST chop up all your CCs and stop using them immediately. Things will never change for the long term until you both start to live within your means and than means no credit. If you haven't got the money, you don't buy it (whatever 'it' is) - simple as that.

Hope this helps a little.

Scarlett xx

floss2

Personally I wouldn't go with borrowing more money to pay off your current debts.

Also, exactly what is the breakdown of your income, and how many children are you paying maintenance for? CSA guide is 15% of your take home pay for 1 child, 20% for 2, 25% for 3 or more, and also is affected by how many nights they stay with you (if at all) so unless you are earning all of that £2900, you are paying more than is affordable. Before you say anything, I appreciate that you may want to help by paying extra, but you can't really afford to - until you get rid of the debts.
http://www.csa.gov.uk/en/PDF/leaflets/new/CSL303.pdf gives you an idea....

Stevev99

Thanks Scarlett/Floss & Homework,

The water bill is correct since in my area we have 2 water companies to pay for, 1 for water in and the other for water out.

Child Maintenance is for my other 2 kids from previous so based on about 2100 take home, it's about right I think.

Lastly, there are now 3 of us in here, so myself, wife and 4 year old daughter so I think the food bill of about £300 is fair?

I know you're right really about not securing this debt since the only benefit is avoiding the annilhilation of my credit record which can be repaired after 6 years after all!

raq

hi there

didn't want to read and run.

I personally wouldn't remortgage. We where in a huge state this time last year and hubby wasn't aware. Thought it was £6,000 and it was actually £11,000. Anyway, all out in the open now and thankgod I did. This site has also helped me along the way. He is now in a better paid job so we chuck as much money to the debt as we can.

We are a family of 5 includes baby food and nappies and spend £70.00per week and we eat well. I always write down what I need first and also check the cupboards and freezer. You will be surprised once you started how you can save.

Chin up and goodluck:A

sira_2

I agree with the others don't re-mortgage, we did and took on a mortgage we couldn't afford after some very bad advice. We are now £43,000 back in debt and on a DMP with the CCCS paying £135 per month which is going to take forever to pay back but at least we're not getting in to more debt. What we are going to do is sell our house and go into rented, pay off the debts, see what's left and hopefully start again, considering shared ownership at the moment. Re-mortgaging was the most stupidest thing we've ever done and if only we had found this site then we would never have done it. Thank god we found it this time around, if we hadn't we would be in the same position as Scarlett. Wishing you all the best x

Homework

Have a look on the site for the old fashioned money saving board and others and you will find lots of tips to bring costs down.

I think it is important to say that what you are going to do is for a short period of time and then it will be over. Your daughter is only 4 and you can have this sorted before she is big enough to be looking for brand named items or looking for serious pocket money. You are in a great position with your share money coming and then you will still have your equity.

We are family of 4 with 2 big teenagers and our shop is £50 ish a week. Never more than £60. We buy free range eggs and fruit and veg etc and do not scrimp on our food but buy carefully and never more than we need. We cook 2 meals at once and freeze one so there is always something there and we don't need takeaway and we buy 'stripy' own brand basics like flour, beans, biscuits etc.

We're on DMP and by being careful and increasing our income are nearer the other end than the beginning. You get used to it and it is a short term measure to straighten out the rest of your life. By the time you have finished you will almost be seeing any defaults fall off your credit record and if you keep putting the money away that you were paying to DMP you will have some decent savings for your future.

It's harder to begin with but once up and running it gradually sinks in that you are bringing yourself out of a mess and you will start feeling more positive about everything.

Biffa

How long have you got left to run on the cars? If you have repaid half the original loan, you may be able to give the car back and cancel the debt. We did this a couple of years ago. You'll need to check the small print on the paperwork. Depending on how far you both drive to work, you could buy a cheaper runaround that will do the job - I've got a w reg Mondeo that cost me £850 a year ago and has done 30k since I've had it with no problems at all.

I agree with homework about the shopping. Buying fresh stuff is far cheaper than processed crap that lives in the freezer. We buy fresh veg at the market and chop it up, bag it and freeze it. For the 3 of you, you shoudl be able to save quite a bit without feeling that you're depriving yourselves of the good things.